Turkey’s Wealth Fund Debt Sparks Fresh Transparency Debate

The Turkey Wealth Fund (TVF) has once again come under scrutiny after revelations that it owes 216.7 billion lira to the Treasury. The massive liability, absent from official receivable tables, has ignited a heated discussion about public finance transparency and accountability.

According to former Treasury official Coşkun Cangöz, the Fund has effectively become a “black hole” within public finances. While Treasury debt records clearly show TVF’s obligations, those same liabilities do not appear in receivable accounts. This discrepancy raises questions about how state accounts are being managed and whether the public is being presented with a complete picture.

Hidden Burden in Treasury Records

Treasury reports released in July 2025 did not list TVF among its outstanding receivables. However, on the collections side, the Fund emerges as a major player. Between January and July 2025, TVF transferred 4.8 billion lira to the Treasury, accounting for nearly 60% of total collections.

Despite these payments, the published tables provide no details on the underlying debt terms—such as interest rates, maturity structures, currency denomination, or possible subsidies.

Cangöz highlighted this inconsistency, stating:

“The fact that billions are being collected from an institution that doesn’t even appear in the receivables register casts doubt on the reliability of state accounts. This raises serious concerns about the future of public finance.”

A Debt That Exists in One Table but Not Another

Looking at the Treasury’s internal debt stock data, the Fund’s borrowings are clearly visible. Since 2020, TVF has borrowed through various special securities issued for state banks. These include inflation-indexed bonds, TLREF-linked securities, fixed-coupon notes, and even zero-coupon euro-denominated papers. Together, they add up to 216.7 billion lira.

Cangöz drew a sharp analogy:

“Collecting payments from a borrower that doesn’t even appear in the receivable table is like a shopkeeper getting money from a customer whose debt was never recorded.”

This inconsistency, he argues, undermines the credibility of government bookkeeping.

Transparency and Accountability in Question

The heart of the issue lies not in whether TVF owes money, but in the lack of clarity surrounding the loan’s conditions. The Treasury’s receivable tables omit critical details such as repayment schedules, interest burdens, and potential subsidies.

“Mali şeffaflık,” or financial transparency, Cangöz stressed, must include not only the total debt but also who owes what, under which conditions, and how repayments are made. Without this, he argues, fiscal discipline and public trust remain compromised.

He adds:

“The Treasury’s mirror must be clear not only for debt but also for receivables. Only then can confidence in public finance rest on solid ground.”

A Growing Financial Black Hole

The Turkey Wealth Fund was created in 2016 with the goal of “channeling public assets into the economy, making strategic investments, and attracting external funding.” By 2017, it had absorbed Ziraat Bank, Halkbank, BOTAŞ, TPAO, Türk Telekom, Turkish Airlines, and Borsa Istanbul into its portfolio—effectively moving many of the nation’s most strategic assets beyond Court of Accounts (Sayıştay) oversight.

In the years since, the Fund has been repeatedly criticized for its opaque borrowing practices, capital injections into public banks, and reliance on Treasury-backed loans. Instead of acting as a driver of long-term investment, critics argue, TVF has become a parallel treasury, siphoning state resources while leaving unclear records behind.

Back in 2016, opposition parties warned that TVF could evolve into a “Hazine-i Hassa,” a private treasury operating alongside the official one. Others drew parallels to the Ottoman Empire’s Düyûn-ı Umûmiye, a period when external debt oversight weakened national sovereignty.

A Systemic Transparency Challenge

The current debate underscores a broader issue: the growing gap between Turkey’s official financial statements and the reality of public debt management. With domestic borrowing costs already high—the Treasury’s domestic rollover ratio hit 157% in July 2025—the hidden layers of debt tied to TVF make fiscal planning even more challenging.

Economists caution that unless the reporting framework for entities like TVF is improved, both domestic and international markets may struggle to accurately assess Turkey’s fiscal position.

As Cangöz emphasized, public trust in state finances depends on clarity:

“Financial transparency is not just about showing numbers. It is about ensuring that every loan, every repayment, and every condition is open to public scrutiny.”

Why Transparency Matters

The controversy over TVF’s 216.7 billion lira debt is more than an accounting anomaly—it reflects the structural opacity of Turkey’s financial management system. Without clear, consistent records, even the largest repayments can fail to reassure the public or investors.

The debate is likely to continue, as critics argue that the Fund’s very structure allows it to bypass traditional oversight, creating risks not just for fiscal stability but also for democratic accountability. Whether Turkey addresses these transparency gaps may determine how resilient its economy remains in the face of mounting debt pressures.