The IMF has had mixed impacts on African economies: in some cases, it facilitated reforms, while in others it imposed sacrifices without results. What makes the difference? Is the key in the program targets or in the countries’ commitment?
The successive global crises — from the COVID-19 pandemic to the war in Ukraine — have placed increased pressure on African economies, already weakened by structural deficits and external dependencies. In these contexts, the IMF was called upon to intervene, offering urgent financial assistance through instruments such as the Rapid Credit Facility (RCF) and the Policy Coordination Instrument (PCI).
Although it helped prevent immediate collapses, many of the programs involved fiscal austerity measures that resulted in subsidy cuts, tax increases, and social tensions.
When the IMF Works… Indeed
There are African countries where the IMF’s involvement was crucial in restoring external confidence, driving reforms, and promoting macroeconomic stability. Cape Verde is a frequently cited example. Following successive agreements with the Fund, the country managed to stabilize public debt, attract foreign investment, and maintain multiple programs in parallel. Currently, in addition to various technical assistance missions, the archipelago benefits from an Extended Credit Facility (ECF) and a Resilience and Sustainability Facility (RSF) totaling USD 100 million. In May, an extension of the ECF until December 2026 was announced, recognizing “the continued success of the authorities’ economic policy and reform agenda,” the Fund stated.
Rwanda, too, benefited from technical and financial assistance that allowed the country to maintain a strong growth trajectory and prudent fiscal management. In 2021, it received around USD 319 million from the IMF for financial relief, helping to mitigate the effects of the COVID-19 pandemic. Another illustrative case is Ghana. Despite more recent difficulties, including a debt crisis and soaring inflation, the country experienced periods of stability after IMF interventions. The 2015–2018 Extended Credit Facility mobilized approximately USD 918 million, contributing to the restoration of economic growth and access to external financing.
In these contexts, positive results were generally associated with a combination of strong internal political commitment, locally driven structural reforms, and consequent flexibility in implementing program targets.
Failure Cases: Austerity Without Relief
Conversely, many IMF programs in Africa have failed to foster inclusive growth or sustainably reduce poverty. One of the most emblematic examples is Zambia, which, despite having participated in successive structural adjustment programs since the 1990s, defaulted in 2020, becoming the first African country to do so during the COVID-19 pandemic. In 2022, the country negotiated a new USD 1.3 billion agreement with the IMF under a 38-month Extended Credit Facility that imposed structural reforms, fuel subsidy cuts, and tight control over public spending. Although inflation slowed, the social impacts were severe: unemployment rose, and public confidence deteriorated in the face of sacrifices demanded without visible improvements in the well-being of the majority.
In Sudan, the IMF played a key role in designing the economic reforms implemented after the fall of Omar al-Bashir in 2019. In 2021, the country joined a staff-monitored program as a precondition to benefit from the Highly Indebted Poor Countries (HIPC) Initiative. As part of the requirements, the Sudanese government removed fuel subsidies and drastically devalued the currency. While the measures were seen as technically necessary to restore macroeconomic stability, the social effects were catastrophic: food and transportation prices soared, triggering mass protests and exacerbating political instability. The country plunged back into chaos, halting any lasting economic progress.
Mozambique: Another Case of Failure
Initially hailed as a “model of reform” following the end of the civil war in 1992, Mozambique’s more recent results have been disappointing. After the suspension of direct budget support in 2016, following the hidden debt scandal, the IMF resumed a formal program in 2022 with USD 456 million in funding through an Extended Credit Facility (ECF) running until 2025. This program aimed to achieve fiscal consolidation, increase domestic revenue, and improve public finance governance. The goal was to correct longstanding problems, particularly high external dependency. Today, about 30% of the state budget is still financed by donors. Tax revenue remains low, at around 20% of GDP — below the Sub-Saharan Africa average. The state’s ability to invest in strategic social sectors like education, health, or infrastructure remains limited.
The IMF’s New Language
In recent years, the IMF has sought to renew its public image, distancing itself from its unpopular 1980s and 1990s profile as a promoter of rigid austerity policies. Its official discourse in reports, press releases, and public statements increasingly emphasizes concepts such as “inclusive growth,” “climate resilience,” “fiscal justice,” and “social protection.” Under the leadership of Kristalina Georgieva, Managing Director since 2019, the IMF has more strongly acknowledged that the challenges faced by developing countries require tailored approaches, with attention to social inequalities, climate change, and the impacts of global crises. Georgieva has repeatedly stated that “there can be no stability without inclusion,” and that the IMF must support reforms that promote equity and protect the most vulnerable.
In response to the COVID-19 pandemic, for example, the Fund provided more than USD 100 billion in emergency financing to over 85 countries, including Mozambique, with relaxed conditions and a focus on immediate health and economic responses. The IMF also launched, in 2022, the Resilience and Sustainability Trust (RSF), a fund to support countries vulnerable to climate shocks with long-term credit lines and reduced interest rates.
Despite this evolution, organizations such as the Bretton Woods Project and Eurodad (European Network on Debt and Development) argue that, in practice, programs continue to impose severe budget restrictions, regressive labor reforms, and accelerated privatizations, under the threat of suspended financing. Many of these packages lack transparent public consultations and are negotiated between governments and IMF staff with limited parliamentary and civil society oversight, these organizations note.
The power asymmetry within the IMF — where votes are weighted by the capital share of member countries, with the United States holding veto power — is also often cited as a barrier to real institutional reform. It is believed that this structure reinforces the imbalance between developed and developing countries, leading programs to reflect the interests of creditors more than the specific needs of the beneficiary populations.
In Summary
The IMF’s actions in Africa reveal a persistent duality: on one hand, it can be a catalyst for stability and reform when there is internal commitment, contextual adaptation, and realistic goals; on the other, it risks exacerbating vulnerabilities if it insists on standardized solutions and rigid conditions. The future of its role on the continent will depend on its ability to listen to countries, involve societies, and rebalance its own internal governance. Only then can it move beyond its image as an agent of austerity and truly become a development partner.
Text: Celso Chambisso • Photo: D.R.
