Oxfam takes IMF, World Bank to task

BRITISH aid agency Oxfam has flayed the International Monetary Fund (IMF) and the World Bank (WB) for their complacent approach to the problems caused in sub-Saharan Africa because of its huge external debt, which is in excess of $183 billion.

"After a decade of structural adjustment programmes implemented under the tutelage of the World Bank and the IMF, Africa remains trapped in a downward spiral of economic and social decline and poverty is increasing," says the Oxfam report. It says there is "overwhelming evidence that existing adjustment policies have failed in two ways": They have neither created a platform for sustainable recovery nor addressed the central problem of poverty alleviation.

The agency demands a special fund be set up from IMF gold sales, to write off Africa's debt. It also urges "a full review of the role of IMF in Africa" by the UN and "greater transparency and independent monitoring of the workings of the World Bank and the IMF".

IMF managing director Michel Camdessus reacted angrily to the Oxfam report and said he, too, feared "the sinking of a continent" and was disturbed that per capita growth rates in Africa had been falling for the last 20 years. IMF adds that the level of debt "has remained an overwhelming obstacle" to recovery and calls for debt forgiveness by the G-7. WB president Lewis Preston pledged a crusade against poverty which Northern finance ministers promised to support.

However, Camdessus added African countries needed to make important changes, including putting the right macroeconomic policies in place and reforming and strengthening governmental institutions.