Monday, April 18, 2005

[Africa] IMF's Poverty Plans 'Making It Unpopular'

Kevin J Kelley
Washington, DC

Africans hold an increasingly negative view of the International Monetary Fund, its ministers have declared.

The ministers, among them Finance minister David Mwiraria, charged at the fund's spring meeting in Washington at the weekend, that this was due to IMF's failure to reduce poverty.

The ineffectiveness of the IMF's poverty-reduction and debt-relief programmes made it difficult to implement economic reforms because "they are perceived as policies imposed by the IMF", the African governors declared.

The IMF also continued to impose "politically sensitive" conditions on its loans to Africa, "which makes it difficult to keep the programmes on track", the governors added.

They urged the fund to "promote outreach and dialogue with the broader African population", and called for increased African representation at the upper levels of the IMF staff and in its decision-making organs.

Africa currently accounts for 43 of the IMF's 184 governors - one for each of the fund's member countries.

But Africa holds only 4.4 per cent of the voting rights within the IMF, which are allotted in accordance with the amount of money countries contribute to the fund. The US has the greatest single say, with 17 per cent of voting rights, followed by Japan with 6.1 per cent and Germany with 6 per cent.

Efforts to meet the 2015 deadline for achieving the UN's Millennium Development Goals have been "unsatisfactory", the African governors said.

They further criticised rich countries for refusing to reform their "trade-distorting policies" and for giving insufficient attention to Africa's needs concerning agriculture, energy and infrastructure.

The governors' critique coincided with the rich countries' failure, once again, to devise a debt-cancellation initiative for Africa.

Finance ministers of the Group of Seven (G-7) rich countries attending the IMF meetings were unable to agree on how to pay for such a move.

But Britain's Gordon Brown, who has been campaigning for major increases in aid to Africa, predicted on Saturday that a debt-lifting deal would be reached by the time of the G-7 July summit in Scotland.

A more positive picture of Africa's prospects is presented in an IMF report released in the run-up to the meetings. It notes that 20 sub-Saharan nations have achieved annual economic growth rates of more than five per cent.

Kenya's growth this year is projected at 3.5 per cent.

But African clothing exporters could soon lose thousands of jobs due to the lifting of trade quotas that had restricted sales by China, the report warns, adding that "the pressure on employment could be severe".