From Joseph Inokotong, Abuja
A new World Bank report has said that at a time when sovereign debts in the poorest countries have surged to dangerously high levels, global and country-by-country systems for tracking it are proving to be inadequate.
These gaps, the World Bank said, make it harder to assess debt sustainability and for overindebted countries to restructure debt promptly and generate a durable economic recovery, stressing that ‘inconsistent reporting poses additional risk for poorest countries.’
The report, “Debt Transparency in Developing Economies”, marks the first comprehensive assessment of the global and national systems for monitoring sovereign debt.
It finds that debt surveillance today depends on a patchwork of databases with different standards and definitions and different degrees of reliability, cobbled together by various organisations.
Such inconsistencies lead to large variations in publicly available tallies of debt in low-income economies – the equivalent of as much as 30 per cent of a country’s GDP, in some instances.
World Bank Group President David Malpass said ‘the poorest countries will emerge from the COVID-19 pandemic with the largest debt burdens in the last few decades, but limited debt transparency will delay critical debt reconciliation and restructuring.
‘Improving debt transparency requires a sound public debt-management legal framework, integrated debt recording and management systems, and improvements in the global debt monitoring. International financial institutions, debtors, creditors, and other stakeholders, such as credit-rating agencies and civil society, all have a key role to play in fostering debt transparency.’