Reimagining Africa's Future: IMF, World Bank, and the Quest for Economic Justice

As we enter these meetings, let us embrace the spirit of Sankofa, encouraging us to learn from the past and reshape our future for the better.

LILONGWE, Malawi - The recent convening of the International Monetary Fund (IMF) and the World Bank on African soil has sparked contentious debates about whether these institutions should hold their meetings in a region that has endured decades of turmoil, writes Jennifer Lipenga.

While opinions differ on this matter, what remains undeniable is that the outcomes of these gatherings will have profound implications for the continent.

Through the lens of Malawi, this article serves as a stark reminder of the IMF's role in exploiting Africa's resources and the human cost incurred due to their austerity measures.

The IMF’s Impact on Malawi’s Economic Trajectory

Like many Global South countries, Malawi's introduction to the IMF was marked by the painful experience of Structural Adjustment Programs (SAPs). These programs, initiated in the 1980s, led to a series of economic reforms that significantly impacted the nation's agriculture sector, currency value, and public services.

The removal of subsidies and price controls on staple crops, particularly maize, resulted in increased input costs and food insecurity. Over the years, Malawi has implemented more than 10 SAPs and Fiscal Restructuring and Deregulation Programs, which have led to government restructuring, public sector wage caps, and the introduction of user fees in healthcare and education.

These policies have disproportionately affected marginalized communities and women, leading to heartbreaking consequences. Access to essential medical care has been compromised, with patients being turned away from public hospitals due to medication shortages or redirected to private pharmacies they can't afford.

Some have resorted to over-the-counter remedies in the hopes of self-healing, while others have forgone medical care altogether due to financial constraints.

Grappling with Multiple Crises: Will the IMF Save Us?

As Malawi confronts a multitude of crises, including the aftermath of Tropical Cyclone Freddy, cholera and polio outbreaks, and ongoing food and energy shortages, negotiations with the IMF for an Extended Credit Facility arrangement worth millions are underway.

Despite these crises, the prescribed remedy remains unchanged: austerity measures. Even during the COVID-19 pandemic, the IMF recommended cuts to public expenditure in 76 out of 91 loans to 81 countries, disproportionately affecting public sector workers and women who bear the brunt of care responsibilities.

The IMF's consistent prescription of austerity raises questions about its commitment to human rights and gender equality. It prompts us to inquire about the true motives behind these policies.

Unveiling the IMF’s Agenda: Neoliberal Capitalism

A historical examination reveals that the IMF's agenda prioritizes advancing neoliberal capitalism over people and the planet. This agenda, often referred to as the 'Austerity Trinity,' not only serves as an economic tool but also safeguards the current economic system.

It hampers highly indebted African countries' ability to mobilize domestic resources and provide essential public services during crises.

Recent experiences with the IMF, such as Malawi's receipt of an emergency relief loan during the COVID-19 pandemic, have raised concerns.

Shortly after the IMF's visit, the Malawi Kwacha depreciated by 25%, leading to increased VAT on essential goods and services, and a surge in the cost of basic commodities. This resulted in acute hunger for millions of Malawians.

Demanding Accountability and a New Global Economic Order

The IMF's historical avoidance of accountability for the human cost of its policies is evident in past events like the 2002 famine in Malawi. During that crisis, the IMF recommended selling maize from the country's strategic reserve and abandoning agricultural subsidy programs, leading to famine and loss of life.

The IMF's representative in Malawi disclaimed expertise in food security policy.

The IMF's disregard for human lives is compounded by its sibling institution, the World Bank, which criticized Malawi's reintroduction of Agricultural Input Subsidies despite its success in ensuring food security.

These institutions prioritize profit accumulation over lives and have repeatedly inflicted suffering on African nations.

To envision a brighter future, a radical reimagining of the world order and global economic norms is necessary. This includes advocating for reparative justice, understanding our political context through decolonization, and overhauling the global economic and governance architecture rooted in colonialism, imperialism, and neoliberalism.

Prioritizing domestic resource mobilization through mechanisms like wealth taxes and progressive taxation can address crises, including climate change.

Additionally, combatting Illicit Financial Flows (IFFs) can be achieved through strategies like the United Nations Convention on International Tax Cooperation, shifting the authority of setting global tax standards from the OECD to the United Nations, and enhancing Beneficial Ownership Transparency.

As we enter these meetings, let us embrace the spirit of Sankofa, encouraging us to learn from the past and reshape our future for the better.

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