Structural Adjustment Programmes imposed as part of the IMF’s debt relief often had the opposite effect on Africa’s economies. (Photo: nwo3.com)
According to Cassandra Veney, a political scientist at the Quinnipiac University, most countries – not just African countries – that were brow beaten into imposing SAPs experienced economic and social upheavals for all sectors of society except for perhaps the super-rich.
Structural Adjustment refers to a set of economic policies often introduced as a condition for gaining a loan from the IMF. Structural adjustment policies usually involve a combination of free market policies such as privatisation, fiscal austerity, free trade and deregulation. ~ EconomicsHelp.org
Going by the Fund’s antecedents in Africa and other regions over the years, many experts and analysts say IMF’s intervention and recommendations have resulted in major misery and pain for countries that complied and sheepishly adopted their policies.
South African authors Trevor Ngwane and George Dor recount an experience similar to Greek controversy in an article titled, “South Africa: IMF Can Only Bring Misery”:
“We know that firsthand in our country and our continent, where for more than two decades people have suffered immensely, due to IMF interference.”
In December 1993, the IMF granted a $750 million loan (about R5,1 billion) which was purportedly for drought relief. The loan carried conditions such as a lowered budget deficit to prevent a new government spending more on social programmes, and lower wages for civil servants.
“These conditions have subsequently become government policy in the form of Gear. The loan was a secret agreement, only leaked to the business press in March 1994.”
Ghana is another country with long history of IMF’s interventions. The current IMF intervention is the country’s fourth in 30 years. Ghana’s debt to Gross Domestic Product (GDP) ratio is 65 percent and it is predicted to hit 70 percent of GDP by 2016 and close to 100 percent by 2020.
The widespread loss of jobs that transpired when former President Rawlings presided over a painful period of IMF intervention still lingers in the minds of most Ghanaians, particularly those who witnessed it.
Reacting to Ghana’s recent romance with the IMF, former presidential aspirant and scion of one of Ghana’s leading political families Nana Akufo-Addo said Ghana worked so hard to rid itself of IMF dependency, adding that any attempt to borrow money from the IMF may mean a reversion to the bad old days.
“The sooner we find a way to govern ourselves intelligently and honestly, the better it will be,” he warned.
Africa’s largest economy, Nigeria is still smarting from the impact of SAP, which it adopted in the 1980s. It is widely believed that SAP as introduced and micro-managed by the IMF marked the beginning of economic depression in that country; the Fund has never been forgiven for that by a majority of Nigerians who are nursing their grudges against it.
Consequently, whenever anything IMF-related is mentioned in Nigeria, anger starts boiling all over again as references are made to that era. This was clearly demonstrated when IMF Managing Director Christine Lagarde, paid a courtesy visit to President Muhammadu Buhari in Abuja few months ago.
Nigerian President Muhammadu Buhari received IMF Managing Director Christiane Lagarde in Abuja in January 2016. (Photo: Yahoo! News)
There was a widely reported public outcry and clarion call to Buhari not to grant her audience or enter into any transaction with her. Voices of opposition to her visit were heard from virtually every segment of the Nigerian society including academia. Prof. Udeme Clement Apkan profoundly advised Buhari to listen more to indigenous Nigerian economic and financial experts than to the IMF.
“We have witnessed what are termed “IMF Riots” in Africa over the last third of a century – most successfully in reversing the January 2012 petrol price increase in Nigeria – but if these have not worked in most of the continent, there’s a lesson to be learnt.” ~ Patrick Bond, scholar and public intellectual
In Angola, Zambia and other African countries that have had similar experience, the narrative on the IMF-induced phobia and reservations reign so supreme that the fear of IMF seems to be the beginning of wisdom now in Africa.
Veney aptly summed the Greece story up brilliantly when she declared that what Greece is experiencing is not different from what African countries have faced in their attempts to balance austerity with humane policies toward their vulnerable, adding that the troika is quick to place Greece’s economic problems at the feet of the government.
“It cannot admit that it had a role to play in creating this economic mess. African governments were also accused of engaging in corrupt practices, not selling off state enterprises in a timely manner, and dragging their feet in the implementation of some austerity measures.”
