IMF to invest in reforming aspects of its Africa strategy

SOURCE: The East African--"IMF to spend $1.3m ob aid reforms for Africa"

The International Monetary Fund (IMF) will expend some $1.3 million on reforms in its approach to aid and development in Africa. It is expected that the reforms will take six years to implement; reform will take place in five reported areas of IMF management of aid to Africa:

1. “[H]igher aid flows through increased government spending” on areas like education and management and treatment of diseases besides HIV—such as malaria—that are also taking a considerable toll on the population (e.g., over 1 million people on the continent are killed by malaria every year);

2. “[I]ncreases in net imports” that do not upset macroeconomic stability;

3. Transfer of some analytical duties to the World Bank and other donor bodies;

4. Transfer of duties regarding advice on composition of expenditure to the World Bank, and

5. A revamp of communications policies on aid and poverty reduction.

These reforms were recommended by the IMF’s Independent Evaluation Office (IEO), an independent body set up in 2001 to provide “independent and objective evaluations of Fund policies and activities.” While officials in African countries have expressed support for increased aid and net imports, there is less enthusiasm with regard to the transfer of certain duties to the World Bank.

One anonymous official from the Bank of Uganda asserted that the World Bank is not equipped to offer advice on composition of expenditure (essentially advice on how a government should budget its public spending) and questioned whether the Bank has the authority to engage in this particular activity, expressing concerns that such an arrangement would trigger another wave of neo-colonialism.

FOR DISCUSSION:

With reference to concerns raised by the anonymous official from the Bank of Uganda, do you think that the World Bank presents a greater threat of “neo-colonialism” in Africa than the IMF?

Do regional development banks, such as the African Development Bank (AfDB) pose less of a neo-colonial threat than the IMF or World Bank?

Does it make a difference either way? Is there a way to avoid neo-colonialism and while still providing much-needed aid?