• Achieving the Sustainable Development Goals requires significant investments—in infrastructure, human capital, and climate change resilience. But governments in developing countries are often limited in their ability to mobilize domestic revenues or private investment.

    Debt is a critical tool for filling this gap and financing the investments needed for sustained economic growth. When used wisely, debt can help governments invest in productive infrastructure or support social spending. But countries must borrow prudently—for the right reasons and on the right terms—in order to safeguard economic stability. The World Bank Group works with countries to make sure that debt is driving development, not obstructing it.

    Debt vulnerabilities have increased in emerging market and low-income countries. Borrowing by low- and middle-income economies from external official and private creditors surged to $607 billion in 2017 from $181 billion the previous year. External debt stocks of low- and middle-income countries rose to $7.1 trillion in 2017, a 10% increase from 2016. At the same time, countries are borrowing from a diverse set of creditors with an increasingly diverse set of instruments.

    Countries and creditors must be transparent about public debt. Policy makers require reliable debt information to make informed borrowing decisions. Citizens need to know how their governments are spending public funds. And creditors, donors, analysts, and rating agencies rely on transparent records to assess sovereign creditworthiness, and to appropriately price debt instruments.

    Updated 7/10/19.

  • The World Bank and the International Monetary fund are working together to help countries to manage their debt better. We offer technical assistance and guidance to advance a reform agenda that strengthens on a multi-pronged approach to reduce debt vulnerabilities in developing countries.

    This work focuses on three core areas:

    Debt Sustainability 

    The WBG works with the IMF to helps low-income countries achieve their development goals without creating future debt problems. Our work on debt sustainability helps client countries balance the need for funds with the ability to repay their debts.

    Debt Relief

    In 1996, the WBG and the IMF launched a debt-relief program, the Heavily Indebted Poor Countries (HIPC) Initiative, in response to accumulation of unsustainable, developing-country debt in the 1970s and 1980s. It called for voluntary debt relief by all creditors, and gave eligible countries a fresh start on foreign debt that had placed too great a burden on resources for debt service. Thirty-nine countries were eligible for HIPC debt relief, and by September 2014, 35 of them had reached the “completion point,” receiving the full amount of debt relief for which they qualified.

    Debt Management

    The World Bank Group supports debt management offices around the world in implementing debt management strategies that determine how a government intends to borrow. Using a proactive debt management strategy can help a government find the best borrowing solutions to raise the amount of funding needed at the lowest possible level of cost and risk. The World Bank Group’s debt experts have developed a range of tools and guidelines for best practices in debt management and for helping to ensure that a country’s debt load is sustainable.

  • Through the Debt Management Facility trust fund, the World Bank supports 84 developing countries in undertaking debt-management reforms. By using a variety of tools and activities, the DMF builds countries’ capacity to strengthen their debt management and make more informed decisions about borrowing and related costs and risks. The DMF’s offerings evolve to address emerging country needs.

    Significant strides have been made in debt management since 2008 in DMF-eligible countries. The DMF has achieved the following results:

    • Today, more countries prepare and publish debt management strategies, the quality of debt records for government debt has improved, and many countries have improved the organization of their debt-management institutions.

    • The Debt Management Performance Assessment results for 37 countries where at least two assessments were undertaken during 2008-17 suggest strong improvements in the quality of legal frameworks for sovereign debt management, coordination with monetary policy, managerial structure, and publication of debt reports.

    • Since 2010, 49 individuals from 45 countries have graduated from the Debt Management Practitioners Program. This includes Stella Nteziryayo, who has served as the head of the Public Debt Office in Rwanda.

    • Delivered more than 105 Debt Management Performance Assessments, 95 Medium-Term Debt sSrategies, and 65 Reform Plans.

    For more results on debt management and the DMF, read the results brief.

Interactive Guide

The Debt Sustainability Framework for Low-Income Countries

This interactive guide can help developing countries understand their debt situation and how it is likely to evolve.

BLOG POST May 21,2019

Balancing Debt with Development

To balance debt and development, transparency and purpose are key.

Brief Aug 27,2019

Results: Promoting Debt Transparency—Because the SDGs Depend on It

The World Bank Group is scaling up its efforts to promote reforms in support of debt transparency and sustainability through its core analytical products, operational engagements, and technical assistance.

Additional Resources


Washington, DC
Joe Rebello