Former President of the World Bank, David Malpass, has raised concerns over Nigeria’s use of collateral-backed borrowing, warning that such transactions could complicate future debt restructuring and undermine efforts to restore debt sustainability.
Malpass, who served as World Bank president between 2019 and 2023, disclosed this in a policy paper obtained from the World Bank website by The PUNCH on Monday.
The paper, titled Public Debt and Central Banks, was published as a Policy Research Working Paper following the Stanley Fischer Memorial Lecture delivered by Malpass at the World Bank Group’s Annual Bank Conference on Development Economics 2026.
In the paper, Malpass examined what he described as two major obstacles to development in low-income countries: dysfunctional currency systems and unresolved sovereign debt burdens. Nigeria featured prominently in his assessment of both issues.
On sovereign debt, the former World Bank chief warned that increasingly complex financing arrangements involving collateral-backed loans were making debt restructurings more difficult.
