Tracking government debt is hard. Banishing secrecy clauses would make it far easier.

With a few taps on a smartphone, I can check the weather, send messages to friendsMarcello_GIF_700kbps around the world, review my bank account, or even order food. But even in our hyper-connected, data-driven world, it’s exceedingly difficult to pin down government debt – even for researchers with advanced skills and access to big databases. And that’s not for lack of trying.

“Hidden debt” crops up far too frequently and often during or just before a crisis, creating a nasty surprise.  Such was the case in 2016, when the revelation of previously undisclosed debt derailed Mozambique’s development agenda, tainted its reputation as a growth and investment star, and sent its financial sector into crisis. More recently, Chad and Zambia’s debt restructuring negotiations were delayed when their respective debt offices couldn’t produce current and complete records of what was owed (and to whom).

But how can government debt be hidden?

Beyond its potential to delay restructuring talks or even send an economy into tailspin, hidden debt also prevents borrowers and lenders from making informed and responsible financing decisions.  Furthermore, it prevents taxpayers and civil society organizations from scrutinizing the borrowing decisions of governments. Given these very severe downsides of hidden debt, you might wonder why it exists in the first place.

A key culprit is confidentiality clauses – language inserted into loan contracts that dictates secrecy about the loan. In many cases, confidentiality clauses prevent the transaction itself from ever being disclosed (let alone the terms of the deal).  In other words, the loan’s existence is only known to those who happen to be in on the agreement. It’s time to call out these clauses for what they are: bad practices that often prove to be destructive.

So why do they exist?

Secrecy clauses are inserted for many reasons, some of which may be justifiable, others less so.  Some information may indeed need to be protected, such as proprietary financial calculations or formulas. But that is no reason to hide the deal as a whole.

More often than not, confidentiality clauses are the result of more unsavory motivations : political considerations like upcoming elections; a reluctance to reveal the true state of public finances; or, simply, corruption.

By focusing on four key areas, policymakers can create a better way for borrowers and lenders alike: 

  • First, refrain from using confidentiality clauses. Secrecy may be tempting in the short run, but, over the long run, transparency can bolster a borrower’s reputation, which, in turn, will improve investor confidence and lower  borrowing costs. Should market conditions deteriorate and credit relief become necessary, transparency also facilitates effective debt assessments by avoiding “hidden” and “surprise” debt and fostering efficient restructuring. 
  • Second, explicitly state in contracts the right of borrowers to share detailed information about public debt transactions with the World Bank and International Monetary Fund, who, among other activities, conduct debt sustainability assessments, generate global debt statistics, and provide emergency financing in times of crisis. 
  • Third, codify debt-transparency requirements into national law. Debt reporting should not be a matter of routine or norms. National legal frameworks should be established that specify how, when, and where debt information will be disclosed. 
  • Fourth, ensure that debt disclosure is sufficiently detailed to allow lenders, analysts, and the public to scrutinize government actions. The details should be published in an easily accessible manner – such as a single website associated with a government debt management office. 

With several emerging market and developing economies facing the very real prospect of not being able to service their debt in the coming 12 months or so, a “hidden debt surprise” could compound an already complicated situation and hinder efforts to assist these vulnerable countries.

Confidentiality clauses aren’t solely responsible for hidden debt. In some cases, hidden debt crops up because of a lack of state capacity to adequately track debt obligations.  But confidentiality clauses in public debt are inserted by sophisticated actors. Foregoing them will not end the problem of hidden debt, but it will go a long way toward steering countries in a more transparent and financially optimized direction.


If you find these issues interesting and want a deep dive, I’d recommend taking a look at Enhancing Debt Transparency by Strengthening Public Debt Transaction Disclosure Practices by my colleagues Susan Maslen and Cigdem Aslan, as well as Debt Transparency in Developing Economies by Diego Rivetti.

The Earth’s atmosphere and oceans are both common resources that are entirely dependent on international cooperation if they are to be managed sustainably. Doing so calls for renewed commitment at the broadest level. Last November, at the 26th Conference of the Parties of the U.N. Framework Convention on Climate Change in Glasgow, 15 countries pledged to increase protection of their maritime areas, known as national exclusive economic zones (EEZs), by investing in ocean-based renewable energy and decarbonizing their shipping industries. Yet these pledges to address climate change in aggregate fall far short of the global ambition needed to avoid the worst and cumulative impacts of climate change on oceans. 

The latest report of the Intergovernmental Panel on Climate Change is a stark reminder of the narrowing window to bolster global climate action on oceans. A series of global events in 2022 has aimed to drive momentum — including  the One Ocean Summit in France in February, Our Ocean Conference in Palau in April, and the Stockholm+50 Conference in Sweden and UN Ocean Conference in Lisbon in June.  Pressure continues to increase from all quarters to maintain support for ongoing global initiatives, from the UN Environment Assembly negotiations on marine plastics to UN negotiations on biodiversity in areas beyond national jurisdiction. 

The World Bank is supporting countries to chart a new course away from business as usual and towards a Blue Economy—defined as the sustainable and integrated development of oceanic sectors in healthy oceans.  Such a path necessarily involves greater collaboration as ocean-based resources are often either shared or migratory, rendering international cooperation essential to the sustainable management of ocean resources in the face of growing climate impacts on oceans.

“The World Bank is supporting countries to chart a new course away from business as usual and towards a Blue Economy—defined as the sustainable and integrated development of oceanic sectors in healthy oceans.”

Ocean governance considerations were central to the African Union’s continent-wide Blue Economy Strategy released in 2019, which aims to chart a coordinated path to address regional threats, including sea piracy, illegal fishing, climate change, and pollution. The strategy also seeks to harness the potential for oceans to provide jobs, strengthen food security and environmental sustainability. It focuses on five thematic areas: (i) fisheries, aquaculture, and conservation, (ii) shipping and transport, (iii) environmental sustainability, climate change, and coastal tourism and infrastructure, (iv) sustainable energy, mineral resources, and innovative industries, and (v) governance, policies, and job creation. 

Such strategies and the activities they envision are anchored in international and regional conventions relating to the Blue Economy, including the U.N. Convention on the Law of the Sea, the Abidjan, Nairobi and Jeddah regional seas conventions, the MAPROL Convention on marine pollution, the Convention on Biological Diversity, and the U.N. Framework Convention on Climate Change and the Paris Agreement. 

To build on these cornerstones of the global ocean regime, the Environment and International Law Practice Group of the World Bank has launched an Ocean Governance Capacity Building Program to support the development and implementation of ocean governance strategies. The training program was developed in partnership with the University of Melbourne Law School, the Division for Ocean Affairs and the Law of the Sea of the Office of Legal Affairs of the United Nations, the Food and Agricultural Organization of the United Nations, the International Seabed Authority, and the Maritime and Oceanic Law Centre at the University of Nantes in France. It brings together experts from the partner organizations, government officials and other stakeholders for training workshops on ocean governance focusing on the key international legal frameworks. 

Following two successful workshops focused on the Pacific and Africa Regions in 2021, which trained more than 150 stakeholders, the World Bank will launch a self-paced e-learning course in the summer 2022 and plan future workshops in the Indian Ocean, Latin America, and other regions. This training program is one of several supported by the multi-donor trust fund PROBLUE, established in 2018 with support from 15 development partners in 11 countries and the European Union. PROBLUE support will continue for future efforts to bring together key stakeholders and build more robust global ocean governance.