For decades, African countries have placed their hopes of economic recovery in the International Monetary Fund (IMF). But there has been little progress. So, is the continent better off without the IMF? Are there any other alternatives to helping African countries strengthen their economies without debts?
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00:00Since 1957, when newly independent countries like Ghana and Sudan joined the International Monetary Fund, IMF,
00:08Africa has become an integral part of the international lender.
00:12The IMF says one of its main goals is to provide diverse financial support to many of struggling economies in Africa,
00:20with a long-term goal of ending poverty.
00:23Our biggest role to help Africa is to support Africa to grow.
00:29So growth is the best way to beat debt.
00:33But over five decades later, African economies are walloping in unsustainable debts, plunging them into cyclic economic crisis.
00:41So what good is the IMF for the continent?
00:45Welcome to The Flipside.
00:47When you mention the IMF and its financial programs and interventions, which continent comes to mind as the biggest client?
00:56Well, I guess Africa won't be missing from the list, right?
01:00African countries have made it a habit to turn regularly to the IMF for resources when hit by global and internal shocks.
01:0748 African countries collectively owe the IMF $42.2 billion.
01:14That is nearly one-third of the IMF's total outstanding credit, making the African continent a significant borrower of the IMF.
01:21We work very closely with African countries to be a source of liquidity and reserves for them.
01:28But juicy as that may sound, IMF financial support have always come with tighter conditions.
01:34Terms like austerity, privatization, liberalization, deregulation and currency devaluation are often associated with loans from the IMF.
01:45Some analysts say these policies and conditions attached with the IMF loans alongside bad economic management by African countries have resulted in making the situation worse than better.
01:56The IMF's less emphasis on long-term economic development has been one of the biggest problems of Africa.
02:07African countries may seem to be major clients of IMF, but in reality, they have only been able to access a smaller share of IMF's resources.
02:16Over the period from 1952 to 2023, the IMF made a total of 1,529 loan commitments, of which around 40%, that is 608, were to African countries.
02:31Over the same period, in volume terms, Africa accessed less than 10% of the IMF's total commitments.
02:38So should African countries turn to other alternatives, such as BRIC superpowers, China and Russia, who provide loans with lesser conditions?
02:48Let us not hoodwink ourselves into believing that we can get somebody who would leave his own problems and come and solve our own problems.
02:56I believe that Africa has enough resources to be able to stand on its own, negotiate on its own, without any backing, without any support from anybody.
03:08At the moment, the IMF wants to open up and give Africa more representation.
03:13That's obviously a plan to keep Africa closer, but it does not look like Africa itself has any plan to be independent of such foreign donor support sooner.
03:23And that is the flip side.