By Janet ZHOU
In 2021, Zimbabwe’s Finance Minister, Mthuli Ncube, caused a stir when he issued more than $15 million in guarantees for private loans granted by the Commercial Bank of Zimbabwe without seeking parliamentary approval. It was a particularly egregious example of a practice that is unfortunately common in Zimbabwe: committing state resources to non-core projects that provide no public benefit. Some of these loans have always gone unpaid, leaving taxpayers to cover the losses. In April 2022, the Zimbabwe Debt and Development Coalition (which I led at the time), along with three co-applicants, applied to the High Court of Zimbabwe to declare that parliament must approve public borrowing before it can take place. In March 2023, the Court ordered the government to publish a draft law within the next 12 months that defines the role of parliament in approving loans and guarantees and establishes the procedure for ratification or rejection.
This win was only possible thanks to a grant. The Open Society Initiative for Southern Africa, a Regional foundation, funded the external lawyers who argued the case, as well as our researchers, for a three-year period. When the cycle ended, so did the capacity to fight these legal battles. This model of funding public accountability in developing countries through grants has begun to collapse. OECD donor aid fell by 23,1% in real terms in 2025, the largest annual decline ever recorded. Meanwhile, governments are tightening registration requirements for civil society organizations and restricting which of these groups can receive external funding. Zimbabwe’s Private Voluntary Organizations Amendment Act, passed in April 2025, allows authorities to deregister civil society organizations and seize their assets without judicial oversight. El Salvador’s Foreign Agents Law, passed just a month later, imposed a 30% tax on all foreign financing.
The weakening of civil society participation will be felt widely, not least because any proposal to make global finance more sustainable and fairer depends on citizens being able to read a debt sustainability analysis and hold a minister to account. The Seville Commitment, adopted at the Fourth International Conference on Financing for Development last year, calls for strengthening parliamentary oversight of debt, independent audit institutions, and the role of civil society in exposing illicit financial flows. But no one has said who pays for this work. The answer may lie in two types of international instrument: stolen asset recovery agreements and sovereign debt treatments. Each could contain a clause mandating that a fixed portion of the amount – 5% is a justifiable starting point – go to financing independent oversight of public finances in the recipient country. The money would be protected from executive interference, publicly audited, and guaranteed for the duration of the program. This is already done in asset return agreements. In December 2017, Switzerland repatriated some $321 million stolen from former Nigerian President Sani Abacha, under a deal that included World Bank monitoring and civil society oversight of how the money was spent. That same year, the United Kingdom, the United States, and four focus countries—Nigeria, Sri Lanka, Tunisia, and Ukraine—adopted the GFAR (Global Forum on Asset Recovery) principles, which commit governments that return or receive assets to transparency and accountability.
But to date, such monitoring has been treated as a courtesy, provided at the discretion of the government holding the stolen funds. The Seville Commitment calls for testing new approaches to asset recovery, including a clause in these agreements stipulating that a third party monitors the disbursement of the money for oversight, in order to prevent manipulation by the recipient government. Debt treatments, negotiated in creditors’ committees and multilateral forums, could adopt a similar approach: channeling a fixed portion of savings from debt repayment into an independently governed fund that supports oversight of public finances. Grants would be awarded competitively, published in a database, and externally audited according to criteria set out in the agreement.
Creditors have already agreed to similar terms for different categories. In 1998, Uganda allocated savings from debt relief under the Heavily Indebted Poor Countries Initiative to anti-poverty programs. In 2023, Ecuador completed a debt-for-nature swap, in which a portion of the interest on the new loan pays about $12 million a year, for 18.5 years, to a fund for the maintenance of the Galápagos Islands, governed by a board of representatives from government, academia, and business. A borrowing government would never voluntarily offer to fund people who audit it. But when the obligation is written into these agreements, the money survives the next budget or election. It also gives creditors insight into the borrower’s disclosure practices.
Oversight is the cheapest insurance in sovereign finances. A group of economists tracking disclosures of undisclosed debt in 154 countries over the past century found that nearly half of all sovereign defaults coincided with significant upward revisions to reported public debt. Hidden debt accumulates in good times and emerges in bad times, when someone finally looks at the books. If public oversight is properly funded, external scrutiny begins long before a default occurs and can pave the way for reform. Consider the order we received from the High Court of Zimbabwe. It was a significant result, but it failed to alleviate the problem. A bill was drafted but not published in the official gazette; the court’s deadline passed without any action. The organizations that could have fought in the courts for its implementation were already focused on other grant-funded work.
As efforts to revamp the global financial architecture gather pace, policymakers must recognize that improving debt management begins with ownership at home. At the International Monetary Fund-World Bank Annual Meetings in October, the new Borrowers’ Platform, which aims to give developing countries a stronger voice in global debt discussions, held its first Steering Council. While proactive coordination between finance ministers and central bank governors, as the officials who sign off on loans, is essential to achieving sustainable debt levels, it must be accompanied by long-term external financing for civil society groups that can hold them to their promises.