The role of the International Monetary Fund (IMF) in managing the economies of developing
countries has come under increasing criticism in the last two years, especially since the Asian financial
crisis.
Presently, increasing calls for international debt cancellation and debates over United States
economic policy in Africa have focused attention on the IMF's policies in Africa, home of many of the
world's poorest and most indebted countries. Several initiatives currently being considered by
Congress would have the effect of reducing the role of the IMF in Africa, while others would continue
and even increase its role.
This paper relies largely on the IMF's own data to consider the results of the IMF's intervention in
the economies of sub-Saharan Africa. We examine the record of countries that have participated in the
IMF's Enhanced Structural Adjustment Facility (ESAF), the Fund's concessional lending facility for
the least developed countries.
Among this report's main findings:
• Developing countries worldwide implementing ESAF programs have experienced lower
economic growth than those who have been outside of these programs. African countries
subject to ESAF programs have fared even worse than other countries pursuing ESAF
programs; countries in Africa subject to ESAF programs have actually seen their per capita
incomes decline. It will be years before these populations recover the per capita incomes that
they had prior to structural adjustment.
• While African countries urgently need to increase spending on health care, education, and
sanitation, IMF structural adjustment programs have forced these countries to reduce such
spending. In African countries with ESAF programs, the average amount of per capita
government spending on education actually declined between 1986 and 1996.
• Neither IMF-mandated macroeconomic policies nor debt relief under the IMF-sponsored HIPC
(Heavily Indebted Poor Countries) Initiative have sufficiently reduced these countries' debt
burdens. Total external debt as a share of GNP for ESAF countries increased from 71.1% to
87.8% between 1985-1995. For sub-Saharan Africa debt rose as a share of GDP from 58% in
1988 to 70% in 1996. IMF debt relief has not sufficiently reduced the debt service burden of
Uganda or Mozambique, the two African HIPC countries that have proceeded furthest under
the HIPC initiative. Poor countries continue to divert resources from expenditures on health
care and education in order to service external debt.
In light of this track record, it appears that efforts to increase economic growth, increase access to
health care and education, and reduce the burden of debt repayment are likely to fail so long as the
IMF remains in control of the economic policies of countries in sub-Saharan Africa. Efforts to reduce
Africa's debt burden should be coupled with efforts to reduce the role of the IMF. Debt cancellation or
relief should not be conditioned upon compliance with the IMF's structural adjustment programs or
policies.