- IMF steps up efforts against poor governance and corruption in Africa
The International Monetary Fund (IMF) is stepping up its engagement with the African continent to address long-standing issues of poor governance and corruption.
Speaking at their High-Level Conference on the promotion of good governance and fight against corruption this week this week, IMF Deputy Managing Director, Antoinette Sayeh revealed the Fund’s enhanced framework was approved in 2018 and is based on over 20 years of research.
“Our efforts focus on reducing vulnerabilities to corruption by strengthening governance in six core state functions: central bank governance, financial sector governance, fiscal governance, market regulation, rule of law, and anti-money laundering,” highlighted the Liberian economist.
Sayeh, 63, explained that in its policy dialogue with member countries, which number 190 in total, IMF looks at the strength of their anticorruption framework – especially whether it is aligned with the specific issues confronting that particular country.
“But we go beyond policy advice. At the request of country authorities, we also provide technical assistance and training to policymakers in this area,” she continued.
Sayeh added much of this effort is coordinated by the IMF’s network of 17 capacity development centers around the world, with six of those in Africa.
She further said the organisation has adapted and stepped up this work in response to the Covid crisis.
“When the pandemic first hit, the IMF took immediate steps to help member countries save lives and livelihoods,” she declared, adding their message was, ‘spend what you must, but keep the receipts’.
Sayeh said the Fund set out a few parameters, with countries receiving IMF emergency financing having to commit to transparency and accountability safeguards.
This included publishing Covid-19 related procurement contract, including beneficial ownership of companies, conducting and publishing audits, and detailed reporting on Covid spending.
Secondly, in cases of severe governance weakness, Sayeh said they worked with authorities to ensure remedies would be taken.
“And finally, for countries receiving emergency assistance that have, or have sought, multi-year IMF financing arrangements, we continue to closely engage with them on longer-term structural governance and corruption matters,” disclosed the Fund’s Deputy MD.
Speaking at the conference, Minister of Finance, Peggy Serame said weak governance and corruption not only constrains service delivery, and therefore economic activity, but generally raises costs.
“This affects the government budget given the continuous allocation of resources to, for example, government programmes and utility providers that do not generate the requisite outcomes nor returns,” said the Finance Minister.
Serame warned an environment of weak, corrupt governance tends to undermine project execution for both businesses and individuals, extending the time between capital allocation and the generation of cash flows.
“If this involves borrowed funds, this leads to an increase in loan defaults, which can worsen asset quality of lending institutions and, therefore, threaten financial stability,” said Serame.