IMF faces wave of calls to suspend loan disbursements in Africa

SUMMARY:  Activists call for suspension of IMF disbursements, raising alarm about lack of accountability for several African loans.

Bretton Woods Project | During the World Bank and IMF Spring Meetings in April, the IMF was confronted with a social media storm in Kenya criticising the institution for approving a $2.34 billion loan to the East African country amidst allegations of widespread corruption and concerns about its high debt levels. Official virtual events of the meetings were disrupted and a petition to suspend disbursement of the loan until a new, more accountable Kenyan administration is in office was signed by over 230,000 “weary Kenyan taxpayers”.

The petition lamented that “Kenyans have nothing to show for previous IMF loans while prices of basic commodities such as fuel are skyrocketing.” Wangari Kinoti, a Kenyan feminist activist and international policy advisor with ActionAid tweeted at the time, “All the Kenyan anti-IMF activity over the last few days is encouraging, but I wish that it included a wider critique of what comes with IMF loans.” In the three-year financing package in question, IMF staff call for further reductions in the public wage bill and the removal of consumption tax exemptions, including on fuel.

In June, similar citizen initiatives were launched in Nigeria and Uganda calling for suspensions of IMF loan disbursements. In Cameroon, 20 women leaders sent a letter to the IMF asking for a pending loan to be halted until two IMF loans totaling $382 million disbursed to Cameroon have been fully accounted for. The new loan comes at a time when Cameroon has already requested emergency debt relief which is likely to be conditioned on its commitment “to return to the fiscal consolidation path” in the recovery. In June, IMF Communications Director Gerry Rice noted that the Fund had agreed anti-corruption measures with Cameroon.

Sarah Saadoun, based in New York with Human Rights Watch, who investigated the implementation of these measures and found that the IMF’s efforts were insufficient, commented that, “The Covid-19 corruption scandal rocking Cameroon shows the high cost of the IMF treating anti-corruption and transparency as tick-the-box exercises rather than a means toward ensuring public oversight over public spending.”

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2 comments

  1. In the case, wherein there is kickbacks and envelops passing left and right, what
    should stop the approval of loans, even if it means the coffers remaining dry?

  2. Obudu Ranch Resort Nigeria, come visit

    Such loans, will further plunge the country into debt traps, as most loan collected in the past where used for election purposes here in Africa, and not into any investment with economic gain that can pay back the loan in future or long run.