In most rich countries the news that a mission from the International Monetary Fund (IMF) is coming to visit is met with indifference. But, in most African countries the news can cause great consternation.

Why the difference?

History has a lot to do with it. The citizens of many African countries have suffered through their governments, under IMF pressure, cutting subsidies and social spending, firing public sector workers and increasing taxes. For example, a 2021 Oxfam study, found that the IMF encouraged 33 African countries to adopt austerity policies in the wake of the COVID pandemic.

On the other hand, with a few exceptions, such as Greece, citizens of rich countries have not experienced the IMF having any direct impact on their lives.

Another important reason is lack of knowledge. Usually, when the IMF comes to town, the public gets little information about the purpose of the IMF’s visit – or its likely outcomes. In other cases, people are concerned that they have limited ability to influence the outcome of the visit or its impact on their lives.

This article seeks to remove some of the mystery surrounding IMF visits to a country. It explains the two basic reasons for the IMF sending its staff on “missions” to a country. And what can be expected in each case.

The IMF’s remit

According to its Articles of Agreement, the IMF’s purposes include promoting monetary cooperation among its 190 member states so that they can more sustainably manage their macroeconomic situations and their international financial relations. This should help them promote and maintain high levels of employment and real income and develop their productive resources.

The IMF also provides financing to countries that do not have sufficient foreign exchange to meet all their needs and obligations so they do not have to resort to measures that are destructive of “national or international prosperity”.

To fulfil these responsibilities, the IMF sends its staff on two basic types of missions to member countries.

Read more: https://theconversation.com/when-the-imf-comes-to-town-why-they-visit-and-what-to-watch-out-for-188302