Vilified and reviled just a few years ago, the IMF now appears to be an ally of African countries, from the moratorium on their debts to emergency aid in the face of Covid-19. But old habits die hard. Has the IMF really changed?
“We are no longer your father’s IMF,” Christine Lagarde said in a 2014 interview when asked about the economic reforms proposed by the IMF in the countries of the south.
The message had trouble getting through, and for good reason. Just a few years after this promise, in 2017, the IMF found itself accused by several Central African countries of exerting excessive pressure for a partial devaluation of the CFA franc in the CEMAC zone.
This “characterisation” was contested by the Fund, but it raised the spectre of the 1994 devaluation, structural adjustment programs, austerity and axe privatisations.
Nearly five years later, it is striking to see how much the landscape has changed.
Though Kristalina Georgieva, the Fund’s boss since 2019, found herself in a difficult position for her perceived controversial role in the production of the ‘Doing Business report’ during her years as the World Bank’s number two, more than a dozen African finance ministers came to her rescue – insisting on the major role played by the Fund and its managing director in the fight against the consequences of Covid-19.
African support for Georgieva
With Georgieva, the Fund opened the floodgates, disbursed emergency financing, urged public creditors to introduce a moratorium on the payment of interest on African debt and, above all, issued Special Drawing Rights (SDRs), a portion of which, albeit a minority, has strengthened the foreign exchange reserves and accounts of African countries.
The answer is more complex than one might imagine.
In this series, we examine in detail the functioning and accounts of the IMF in Africa, giving the floor to international and African experts, economists, financiers and public decision makers on their experiences with the Fund and their analysis of its interventions.
We also interview the heads of the multilateral institution, including its Africa Director, Ethiopia’s Abebe Aemro Selassie, and look at the (other) reasons for African support for Kristalina Georgieva…