Debt decisions that deliver: Strengthening domestic institutions for accountable borrowing
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Article summary
Notes from the CSPF panel titled Decisions that Deliver: Strengthening Oversight Institutions for Accountable Debt, held during the 2025 Annual Meetings. As countries face mounting fiscal pressures and calls for international financial reform, panelists from Senegal, Kenya, the IMF and the Westminster Foundation for Democracy discussed how weak debt transparency and oversight perpetuate inequality and erode public trust.
Moderator:
Ana Patricia Muñoz, Executive Director, International Budget Partnership
Panelists:
- Mamadou Djite, Senior Advisor, Court of Auditors Senegal
- John Kinuthia, Deputy Executive Director, Bajeti Hub
- Olya Kroytor, Senior Council, IMF
- Jeff Dubrow, Associate Expert, Westminster Foundation for Democracy (WFD)
- Rouguiatou Diallo, International Trade Union Confederation – ITUC
A recording from this session can be found online here.
Ana Patricia: This discussion comes in a context where the debt service is crowding out the fiscal space needed for investment in social sectors and unfortunately as it’s always been the case populations that are most marginalised are the most affected. We often talk about debt as a macroeconomic issue, something for technocrats – but it’s also about whether governments can pay teachers, provide healthcare, or invest in communities.
What I’m really hoping we can discuss today is how to make debt oversight more accountable and inclusive – how parliaments, audit institutions, and civil society can play a stronger role in ensuring that borrowing actually serves the public good.
Right now, many countries are spending more on debt service than on social protection, and citizens have very little visibility into how or why those debts were contracted. Transparency is a start, but it’s not enough on its own. We need to think about how information leads to action, how oversight can move from disclosure to accountability. That’s the conversation we want to have today.
Mamadou: In Senegal, we recently completed our first-ever public debt audit, and it revealed some uncomfortable truths. What we found was that official debt figures had been underreported, which exposed significant weaknesses in our systems of financial transparency and accountability. For too long, information about debt was fragmented – spread across different agencies, not properly consolidated, and in some cases, not publicly accessible at all.
The audit process itself became a turning point. Once the findings were published, it triggered a national debate – in parliament, in the media, and among citizens – about how public debt is managed and who is responsible for ensuring it remains sustainable. The government responded by moving to separate accounting and management functions, integrate financial databases, and strengthen annual monitoring of debt operations. These may sound like technical changes, but they go to the heart of rebuilding public trust.
What we learned is that transparency alone is not enough. Publishing an audit matters because it corrects misinformation and builds credibility, but it’s just the first step. We realised that auditing debt should not stop at verifying numbers – it must extend to examining the entire management of public finances, from how loans are contracted to how funds are used and monitored.
Countries need to institutionalize debt audits through legislation, ensuring they occur regularly rather than as one-time exercises. CSOs here have a crucial role because they can help hold parliaments accountable for how public debt is contracted and reported. Transparency should not depend on political will, it should be a matter of law and of public demand.
John: In Kenya, we’ve reached a point where public debt has climbed to nearly 68 per cent of GDP, and the burden is being felt across every sector – from healthcare and education to the cost of living. Yet, for many citizens, debt remains an abstract concept; they hear the numbers but don’t see how it connects to their daily struggles. That’s why we created Okoa Uchumi, a coalition that brings together civil society organizations, parliamentarians, and oversight institutions to make debt accountability part of public conversation.
Our research has shown a clear link between governance quality and the social impact of debt. When institutions are transparent and participatory, borrowing can support inclusive development – but where oversight is weak, debt becomes a source of inequality and instability. Unfortunately, in many low- and middle-income countries, parliamentary oversight remains largely reactive. In Kenya, as in others, most loans are approved after disbursement, which means scrutiny comes too late to prevent problems. If we want debt to work for development, it can’t just be a technical or fiscal issue. It has to be a democratic one. People must have the tools and the power to ask where the money goes.
Olya: From within the IMF, I work on the legal aspects of fiscal governance, and what we’re seeing is that many national legal frameworks still lag behind international standards when it comes to debt transparency and oversight. This gap doesn’t just affect reporting – it affects how debt is conceived, managed, and ultimately accounted for.
In many countries, there’s still no single legal definition of public debt, and even where laws exist, they often exclude contingent liabilities, collateralized loans, or state guarantees that can create hidden risks. That’s why we argue that transparency must begin before reporting – it needs to be embedded from the very start of the debt cycle, from how debt is defined to how it’s planned, budgeted, and monitored.
Our recent paper, Legal Frameworks for Public Debt Transparency, looked closely at these issues and found critical gaps in legislative mandates, especially for parliaments and supreme audit institutions (SAIs). In many cases, these institutions simply don’t have the legal authority or resources to conduct proper oversight, even when they want to. In our paper we outlined three areas for reform:
- Clear mandates and reporting duties for oversight bodies, ensuring they can access information and act independently.
- Legislated cooperation frameworks between parliaments, SAIs, and finance ministries, so that fiscal institutions don’t operate in silos.
- Comprehensive debt coverage, including contingent liabilities and collateralized borrowing, within public financial reporting.
IMF is also working with partners like INTOSAI (the International Organization of Supreme Audit Institutions) to build country capacity and support parliamentary and civil society engagement on debt transparency. These initiatives are part of a broader effort to mainstream participatory accountability into debt management, so that oversight becomes a shared responsibility rather than a bureaucratic exercise.
Jeff: At the Westminster Foundation for Democracy, we’ve been studying how parliaments exercise oversight over public debt across a wide range of countries, using our Public Debt Management Assessment Tool (PD-MAT). What we found is that parliamentary oversight remains fragmented, outdated, and often purely symbolic.
In most cases, only finance committees have the authority to review debt matters, while other crucial actors – such as public accounts committees, budget offices and even subnational legislatures – are left out of the process entirely. This narrow approach means that the full implications of borrowing are rarely debated, and by the time information reaches parliament, decisions have often already been made.
Many of the laws governing debt management were written before 2010, and they simply don’t reflect the realities of today’s complex financing landscape. Most of them fail to define parliament’s role in debt approval or to require ex-ante review of borrowing plans. In practical terms, that means parliaments can’t intervene until after debt is already contracted – when it’s too late to influence terms or assess risk. What we see is a kind of procedural oversight – parliaments get informed, but they don’t get to decide.
Despite these challenges, there are promising examples of reform. Zambia’s 2022 Public Debt Management Act now requires parliamentary approval of annual borrowing plans, making oversight an integral part of the debt cycle rather than an afterthought. Similarly, Sri Lanka’s 2024 debt management law mandates that the government tables its debt strategy in parliament, a move that has opened space for public debate and policy scrutiny. These reforms demonstrate how institutional change is possible when political will aligns with public demand. But for that to happen more widely, development partners and IFIs need to change their approach.
Rouguiatou: Speaking from the perspective of the International Trade Union Confederation (ITUC), I want to remind everyone that workers are the first to feel the impact of fiscal tightening and privatisation, yet they are the last to be consulted. Every time governments implement austerity measures – wage freezes, public sector cuts, or privatization – it is workers and their families who bear the brunt.
In our global survey, over 75 per cent of trade unions reported that they have never been consulted in the context of IMF Article IV reviews or debt policy discussions. That figure should trouble all of us. It means that decisions shaping entire economies – and millions of livelihoods – are being made without hearing from those most directly affected.
We’ve seen this again and again. When debt crises hit, the standard response is to tighten fiscal policy, privatise essential services and deregulate labour markets. But this approach ignores the social and employment consequences – rising inequality, job insecurity, and weakened social protection systems. In many countries, workers’ rights have been eroded in the name of competitiveness or efficiency, while informal employment and precarity have surged. There is a lot of focus on mobilising private capital, but there is no development without labour. Workers are not just an adjustment variable – they are the backbone of economic recovery.
We urgently demant that:
- Mandate ex-ante and ex-post distributional assessments of all major debt and fiscal measures – conducted publicly and peer-reviewed – to make visible who pays and who benefits from adjustment.
- Align IMF policy advice with ILO conventions, the Paris Agreement, and broader human rights frameworks, ensuring that fiscal measures uphold decent work and social justice standards.
- Establish mandatory consultation mechanisms with trade unions and civil society organizations, with clear timelines and participation procedures, so that Article IV missions and debt reviews reflect the lived realities of working people.
Questions and answers
CSO participant: In many countries, the powers to approve or amend debt deals lie outside parliamentary review. How can the IMF’s transparency principles translate into binding reforms at the national level?
Olya : The Fund’s ongoing surveillance evaluation (2022–2025) is explicitly looking at how to strengthen the connection between policy recommendations and country implementation. We recognise that legal mandates matter – advice alone doesn’t always translate into national reform – so upcoming guidance is likely to emphasise reforms to domestic legislation that institutionalise transparency and oversight.
John: That’s essential, but it must be paired with politics and capacity on the ground. We need frameworks that require ex-ante parliamentary engagement, not just ex-post reports. Otherwise, oversight remains reactive – when the most critical decisions have already been made.
Rouguiatou: From a labour perspective, the missing piece is voice and participation. If workers, unions and civil society are not consulted before debt deals are designed, the human costs will always be ignored. We need mandatory consultation with timelines, not informal workshops after the fact.
