Kindly share this postDavid Malpass, former World Bank President, has warned that Nigeria’s increasing reliance on collateral-backed and complex borrowing arrangements could make any future debt restructuring more difficult and discourage investors if the country’s debt position becomes unsustainable. Malpass, who was 13th president of the World Bank Group, from April 9, 2019 – June 1, 2023, raised the concern in a World Bank Policy Research Working Paper titled Public Debt and Central Banks, which was based on the Stanley Fischer Memorial Lecture delivered at the World Bank Group’s Annual Bank Conference on Development Economics. He also questioned the growing use of guarantee products provided by multilateral development banks, arguing that their effectiveness had not been adequately tested during sovereign debt restructurings. The former World Bank chief also criticised the international debt restructuring system, arguing that existing mechanisms had failed to provide timely and meaningful relief to heavily indebted countries. Malpass’ warning comes amid continuing scrutiny of Nigeria’s use of unconventional financing to refinance expensive obligations and cover budget deficits.