Africa urged to reject debt-trap policies of IMF, World Bank

A coalition of African civil society organisations (CSOs) is rallying African countries to stand up to the International Monetary Fund (IMF) and World Bank’s policies that they say are perpetuating and driving unsustainable indebtedness on the continent.

Dubbed the African International People’s Tribunal, a “people-led initiative” is aimed at publicly indicting the IMF and World Bank for policies that have entrenched Africa’s debt crisis, undermined public services, and driven inequality.

The NGOs include AFRODAD (African Forum and Network on Debt and Development), the Malawi Economic Justice Network (MEJN), the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI), the International Network for Economic, Social and Cultural Rights, the Asian Peoples’ Movement on Debt and Development (APMDD), the Stop the Bleeding Campaign.

They accuse the World Bank and IMF of promoting debt-dependent development models that prioritise creditor repayment and macroeconomic “stability” over inclusive growth, through decades of structural adjustment programs, austerity-driven loan conditionalities, and policy influence over national budgets.

The Tribunal will hear testimonies on how these institutions’ austerity measures and debt-driven models harm African development, intending to raise awareness, advocate for debt cancellation, and push for reforms that prioritise people over creditors.

Policy solutions promoted by the IMF and the World Bank have routinely focused on fiscal tightening, deregulation, and privatisation over the last four decades.

“The consequences have included weakening local industrial base and productivity and increasing reliance on borrowing to mobilise resources to finance development in African countries,” the CSOs say ahead of the tribunal hearing on Wednesday and Thursday.

Worse still, they add, the IMF and the World Bank have failed to address the underlying structural causes of debt in Africa, including unfair trade rules, inefficient and costly debt restructuring workouts, illicit financial flows (IFFs), and vulnerability to cascading shocks at the heart of a narrow tax base and commodity.

This has left many African countries constrained by slow budget growth and increasing development needs that cannot be met without countries borrowing their way to unsustainable levels.

For instance, for over a decade, Africa’s budget has only grown from $255 billion in 2014 to about $523 billion in 2024, compared to the pace of the growth of the general gross government debt, which passed $1.8 trillion in 2024, up from just $375 billion in 2014.

In the 1970s, Africa’s debt was just $6 billion and $126 billion at the end of 1987.

“This trend under the heavy policy direction of the IMF and World Bank makes Africa the only region in the world where debt is growing faster than gross domestic product (GDP) share of countries with a debt-to-GDP ratio of over 60 per cent, from 25 to 46 per cent between 2013 and 2023,” their joint statement says.