The World Bank's Director of Macroeconomics, Trade and Investment warned of the dangers of unreported debt, using the example of Mozambique, and argued that more transparency is needed, especially in low-income countries.

In an article published in Barron's economic magazine and also on the World Bank website, Marcello Estevão recalls the consequences of undeclared debts in Mozambique, writing that "in 2016 the discovery of two large undisclosed loans launched an economic crisis, froze donor support to the country and the government was forced to make deep cuts in public spending."

Mozambique is also joined by difficulties over debt in Zambia and Chad, writes the Brazilian economist, noting that "these episodes expose the dangers that creditors and debtors face with undisclosed debts, and have led to urgent calls for more transparency over debts, which have so far gone unheard."

In the text, Marcello Estêvão, quoted by Lusa, lists three important facts: "first, 40% low-income countries have not published any data on sovereign debt for more than two years, second, there are huge discrepancies between public estimates of debt, with data published by national authorities and data from multilateral development banks showing differences of 30% of GDP in some cases, and third, 15 low-income countries have debt secured by natural resources, but none give details of these arrangements."

This uncertainty, argues the economist, "should not be acceptable in the current environment, where more than half of these countries are already in debt distress or at high risk of reaching that level.

Debt transparency, however, is not the only problem, says the economist, pointing out three areas of concern: internal debt, external debt outside the international markets, and debt that uses natural resources as collateral. Defending that debt publication is not only the responsibility of governments, but also of creditors and commercial banks, Marcello Estevão argues that international financial institutions are also important and advocates a harmonization and consolidation of all debt data to allow a greater knowledge and an acceptable degree of comparability.

"At the time of Covid-19 we cannot afford to be complacent about the challenges of debt transparency in developing countries, the time to act is now," he concludes.