ActionAid reiterates call for debt cancellation, end of austerities for Africa
Amid International Monetary Fund (IMF) and World Bank annual meetings taking place in the Moroccan City of Marrakech, Country directors for ActionAid in Africa have implored the Bretton Woods institutions to drop “the failed” neoliberal economic model, stop imposing austerity policies, and instead support debt cancellation and ambitious and progressive tax reforms.
In a strongly worded statement, the directors have also urged African governments to coordinate for a resolution to debt crises based on radical renegotiation or debt cancellation, including pursuing “alternative economic paths” that prioritize quality public services and social and economic justice.
“The IMF and World Bank have imposed a neo-colonial model of economic development based on exploitation and extraction from the Global South–which has given rise to regular debt and economic crises.
“These crises have then been used to justify the imposition of harsh loan conditions and coercive policy advice on African governments, perpetuating dependency and stripping away the capacity of states through cuts to public spending,” reads the statement dated 11th October, 2023.
The IMF and World Bank annual meetings are reportedly taking place in Africa for the first time in 50 years. The meetings were last held in Kenya in 1973, laying the foundations for the rise of neoliberalism.
According to the statement, in the decades that followed, IMF and World Bank have championed that neoliberal model, rooted in colonial, patriarchal and extractive systems across Africa.
“This has been enforcing variations of structural adjustment and fiscal consolidation programmes that have profoundly undermined development, having a significant impact on the capacity of African states to set their own independent course.
“Although some of the rhetoric has changed in recent years, in practice IMF and World Bank are still attached to this cult of austerity, undermining progress on health, education and other public services and blocking Africa’s ability to respond and adapt to the climate crisis.
“After four lost decades to African development, it is surely time to ensure that we make the IMF learn from their failures”.
The statement further says ActionAid’s research has actually shown, in particular, that IMF enforced cuts and freezes to public sector wage bills, have consistently blocked the recruitment of urgently needed teachers, nurses, midwives and other public sector workers.
There are, according to the statement, documented gendered impacts of these cuts, with women being the first to lose access to services and opportunities for decent work and the first to absorb the rising tide of unpaid care and domestic work.
“We call on our governments across Africa to recognize that IMF and World Bank are fundamentally colonial in nature, formed before most African countries achieved independence.
“These institutions perpetuate colonial power relations and their neoliberal ideologies are outdated, not fit for the 21st century or the needs of African countries.
“We call on African governments to chart a very different path to the future, building strong and sustainable states that can deliver quality public services and sustainable development for all,” further reads the statement.
ActionAid has also emphasized, among other important things, the need for possible alternative economic measures, including many progressive and gender-responsive taxes that can focus on raising revenue for public services from the wealthiest individuals and companies
The statement also calls upon African governments to make debt cancellation and debt renegotiation a priority in climate finance negotiations at COP28 and in other international spaces, adding that: “Climate finance, including for loss and damage, must be based on grants and global taxes, not loans”.
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