The International monetary Fund is back in Africa. Social clearcuts threaten like 30 years ago? Experts say that the IMF has learned from its mistakes. But the real Problem he will not solve still.
The IMF has a long and controversial past in Africa
In Africa, an organization is experiencing a Comeback, with the help of many inhabitants of the continent would probably have been happy to never do again: the International monetary Fund (IMF). The reason: The debt of some African countries has increased in the past few years such that in many places the state is bankrupt.
Finally, the oil country of Angola had turned the end of August to the organization in Washington. In addition to help loans President João Lourenço also hopes to support in the implementation of economic reforms. A further nine African countries are currently receiving IMF funds, including Mozambique, Ghana and the Republic of the Congo. Overall, the IMF programs in Africa amounted at the end of 2017 to 7.2 billion US dollars – four times as much as in 2014.
The increased commitment to the IMF, brings back memories of the last serious debt crisis in Africa in the 1980s and 90s. Then, too, some countries threatened with insolvency, the IMF has helped with the rescue loans. However, the loans came with strict conditions: The IMF and its sister organization, the world Bank demanded that in return for tough economic and political reforms of the aid recipients.
Angola’s new President, João Lourenço, here with President Steinmeier, wants to take IMF assistance
Structural reforms with little success
The “Washington consensus” package of reforms known included the removal of subsidies for agriculture and industry, tax cuts, the privatization of state enterprises, and a policy of free trade. To ensure but instead of as expected for an economic recovery, exacerbated by the reforms to the economic problems of the recipient countries often.
“The bottom line is, the adjustment programs were not very successful,” says Rainer Thiele, Africa expert at the Institute for world economy in Kiel. Although most of the countries have received short-term payment difficulties, explains Thiele Interview in the DW. But, as they have the countries to come then “the long-term growth path”.
Meanwhile, IMF criticize Economists, even the methods of their organization. In 2016, the published paper in the in-house journal, the authors claimed that at least part of the imposed reforms in the past led to more inequality and thus economic growth would be hindered.
Many African countries are commodity export-dependent
China opened the financial room for manoeuvre
In fact, it should be the IMF is also a learning experience, says Rainer Thiele. So would when dealing with recipient States, in the meantime, on topics such as good governance and social concerns placed significantly more weight than in the past. In addition, there is evidence that the conditions for lending had become less strict.
A possible reason for this change of mind: the IMF and the world Bank are the only potential donor to African governments are no longer. Some States may provide, in the meantime, in the regular capital markets with money. And, above all, the rise of a large investor has the financial conditions in Africa reordered: China.
“The arrival of China has provided African countries with new financial opportunities,” says Senegalese economist Ndongo Sylla in the DW-interview. Because of China’s wool for its loans, no political and economic reforms, but mainly raw materials and markets. African countries could escape the “access by the IMF and the world Bank”, at least temporarily.
Expert: “the roots of the debt problem in a fight”
However, for Sylla, who works as a program Manager at the Rosa Luxemburg Foundation in Dakar, will change China’s willingness to pay nothing to the actual Problem. The namely, the specialization is of African economies on natural resources. “African countries are in debt, because they export mainly raw materials and all other import,” says Sylla.
Christine Lagarde The Head of IMF promises to support African States in emergency situations
As in the 80s and 90s, the current crisis is due to the fact that prices for raw materials such as Oil, cocoa or diamonds fallen and interest rates for foreign countries are loans to increase. You want to tackle the debt problem seriously, had to give Africa the opportunity to develop its agriculture and industry in peace, Sylla. “This also means, however, that Africa must reject the free-trade agenda of the IMF, the world trade organization and the European Commission.”
Chinese loans on the Basis of raw material concessions debt problems are actually not a long-term solution for Africa, shows the example of Angola. Experts estimate that the country has now amassed $ 25 billion in loans from China – all of which are secured by revenues from the Oil production. However, according to a report in the Financial Times this option is exhausted now largely: Too much Oil was already earmarked for the repayment of loans. Angola call for help to the IMF – a sign that Africa can not do without in the future on the controversial organization in Washington.