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IMF, World Bank and Western Aid are killing Afrika

Dr. Kwame Osei | 25.09.2008 14:35 | Anti-racism | Globalisation | History | Birmingham

Many western individuals and organizations niavely believe that "aid" and IMF and World Bank sanctioned poicies will get Afrika out of poverty. What this article seeks to do is to impart to the reader that far from helping Afrika, western "aid" and IMF and World Bank policies have crippled Afrika's economic development and made Afrika the "scare on the consciousness of the world". The truth of the matter is that Afrika needs proper and just trade with the West, access to its markets, that the West pays the normal price for Afrika's resources, that western multinational companies like the mining ones and petroleum ones end thier gross exploitation of Afrikan resources, and a definite end to so-called aid that has draconian conditions attached to it. May be trendy white liberals like the so-called aid agencies and Bono will take heed and realize that THEY DO NOT SPEAK FOR THE MASSES OF THE AFRIKAN PEOPLE.

It has been long suggested by political analysts, economic commentators, aid agencies and politicians alike that the only way for Ghana and Afrika to become a part of the global family economically is to accept IMF sanctioned loans and aid from the likes of the west.

What this article seeks to highlight is that contrary to what is said by economists, IMF sanctioned programs and aid have hampered rather than helped Ghana and Afrika’s economic development.

History is a great marker for analyzing events and putting them in its present context. Economically speaking, when one examines the relationship between the West and Afrika/Ghana, it has been a relationship of exploitation of the highest order and continues to be the case.

It is important to remember that before the coming of Europeans to Afirka, Afrika was a thriving continent in every aspect – spiritually, technologically, economically, educationally, scientifically and so forth.

During the enslavement period in which many Ghanaians/Afrikans were forcibly taken by Europeans to the ‘new world’, Afrika saw a massive downturn in its economy and development from which it has never recovered.

The importance and significance of the enslavement of Afrikan people cannot be under-estimated because it was estimated by UNECSO in a symposium in 1987 that over 210 million Afrikan people were stolen from Afrika and taken to the Americas.

Those that were stolen were highly skilled and educated people between the ages of 15 and 40.

This had an immense impact in two ways. The first being the human labour that was needed in order for Afrika/Ghana to develop was absence and was being used to develop the Americas. As a result of this huge loss of human resource which is the biggest factor in development, Ghana and by extension Afrika lagged behind economically and developmental terms behind the rest of the world.

Tell me what continent would not suffer when more than 210 million of its most highly skilled and educated citizens have been taken out of it? This is just plain common sense.

Secondly and most importantly that this huge labour that was stolen out of Afrika and taken to the Americas had a profound effect on the economic development of the Americas.

Huge plantations including sugar, cotton, rubber, coffee, banana and so forth were developed as a result of the mass transportation of Afrikan people from the continent.

The finished products from these commodities were then sold on to Europe at great profit, hence making the owners of these companies extremely wealthy and making huge profits for the plantation owners and the whole Americas region mega-rich.

At the same time these Afrikans/Ghanaians whose labour was being used to create that wealth were not paid a singe cedi for their labour – so even in those days the Afrikan/Ghanaian was viewed as a cheap if not free source of labour.

This also includes the fact that Afrika’s and Ghana’s natural resources were being looted out of Afrika and taken to the Americas and Europe which strengthened the economies of those continents and left Afrika’s in tatters.

To illustrate this point a classic book entitled ‘How Europe under-developed Africa’ by Dr Walter Rodney states that enslavement and later colonialism was directly responsible for the impoverishment Afrika sees today.

He then went on to say that “the question as to who, and what, is responsible for African underdevelopment can be answered at two levels. Firstly, the answer is that the operation of the imperialist system bears major responsibility for African economic retardation by draining African wealth and by making it impossible to develop more rapidly the resources of the continent.

Secondly, one has to deal with those who manipulated the system and those who were either agents or unwitting accomplices of the said system. The capitalists of Western Europe were the ones who actively extended their exploitation from inside Europe to cover the whole of Africa.

In recent times, they were joined, and to some extent replaced, by the capitalists from the United States; and for many years now even the workers of those metropolitan countries have benefited from the exploitation and underdevelopment of Africa."

So the enslavement of Afrikan people had a severe impact on the economic development of the continent and after the abolition of enslavement another exploitative exercise came in the form of colonialism.

It is also important for the reader to recognize and appreciate that the so-called Industrial Revolution that enabled the British to industrialize at a rapid pace, and the emergence of Europe and America into major economic powers was made possible ONLY by the huge profits Britain, Europe and America made from the enslavement of Ghanaian and other Afrikan people. Read Dr. Eric Williams’ Capitalism and Slavery to find out more.

Perhaps the biggest proponent of this colonial behaviour was the forced partition of the Afrikan continent by the European and their American cousins during the 1884/85 Berlin Congress that sought to divide Afirka into European and American geo-political and economic entities regardless of indigenous group, geographical area, linguistic and cultural differences.

Partition literally meant that the Europeans/Americans owned a specific piece of the Afrikan continent. For example under the Berlin Congress agreement the Belgians got the lions share, The Kongo (which is the minerally richest country in Afrika), The French got most of North and West Afrika and The British got most of Southern and Eastern Afrika plus parts of West Afrika.

As such the imperial powers were able to fix the economies of those countries to suit their own needs. For example, those colonies that were under the control of the French had to give the proceeds of 90% of their mineral resources to the French treasury in Paris.

The British and the Portuguese literally drained its colonies dry and looted their resources for the benefit of their respective countries.

Add to these the prices of commodities that were produced by Afrikan countries were determined by the West/colonialist forces that in essence meant that these Western countries were able to buy the raw materials needed to build up the their industry at very cheap prices.

This meant that the Afrikan producers of these raw materials were not getting a good income from their resources.

This meant that due of this lack of income Afrikan governments had to look to other sources as a means of attaining money to invest in schools, roads, healthcare, water, sanitation and other projects for their peoples.

This is where the next form of exploitation continued. This was in the form of the IMF (International Monetary Fund).

The IMF was set up at the Bretton Woods conference in 1944 and was designed initially to help countries who were in deep economic crisis. Nowadays it remit is more broad and includes initiating programmes aimed at economic development.

It is through the IMF and their NGO allies that initiatives and programs directed at helping Ghana and Afrika have been implemented.

However the stark reality is that after decades of so-called Structural Adjustment Programmes and other ‘development’ initiatives designed to lift Ghana and Afirka out of its cycle of never ending poverty the situation is much worse.

For example water privatization programmes has led to an unavailability of water in many parts of Afrika. In Ghana despite to the contrary water privatization has meant that Ghanaians are now paying more for their water supply when the company tasked with supplying Ghanaians water has failed miserably in its duty to provide Ghanaians with safe and clean water.

Another example is the privatization of some profitable and well-run state owned industries that were sold off cheaply to Indian, European and Arab so-called investors which has resulted in many thousands of Ghanaians loosing their livelihood and struggling to make ends meet.

Another effect of the IMF’s bad policies has meant that Ghana a country that used to give aid to other countries for their development is now being forced to depend on so-called donor countries.

This has manifested itself in that Ghana is dependent on its so-called donor nations for about 60% of her budgetary needs. With such a high dependency rate, it means that an independent country like Ghana is forced to comply with the dictates of these donors in many aspects or else it will not get the required aid to balance its national budget.

Examples of how IMF imposed policies have damaged Afrikan economies can be found by reading and researching the following publications printed by the British NGO World Development Movement (WDM):

• Treacherous conditions: How IMF and World Bank policies tied to debt relief are undermining development (May 2003)

• Debt and destruction in Senegal: A study of 20 years of IMF and World Bank policies (November 2003)

• Zambia: Condemned to Debt: How the IMF and World Bank have undermined development (April 2004)

This brings us on nicely to the whole issue of aid. Afrikan countries like Ghana are huge recipients of so-called aid.

As I mentioned earlier because of the way Europe (including New Zealand and Australia) and America have carefully and systematically manipulated the world economic order, countries like Ghana do not receive proper income/revenue from their commodities.

As such they are forced to either take out loans with high interest rates, accept initiatives and programmes that are not in their national interest and accept so-called aid that has severe restrictions and criteria attached to it.

The reality of the so-called aid is that it has made countries like Ghana become virtually slaves to western interests.

This point is proved by the water privatization issue in Ghana – In May 2002 in a memorandum presented to the Government of Ghana by the National Coalition Against Privatization (NCAP), stated that “The framework (for water privatization in Ghana) is largely being imposed by external interests in a non-transparent process that has deliberately avoided public scrutiny and democratic debate” – and it went on to single out the consultants as “firms that all happened to be ideologically in favour of privatization and had a track record working with the large private water companies.

All of the studies concluded that the model of privatization being proposed by the World Bank, their direct client, is the best one for Ghana.

That said, the implementation was driven by the forceful conditionalities of the IMF and DfID loans” – DfID is the British Government’s Department for International Development.

A source close to DfID acknowledged at the time that DfID provided “funding earmarked for asset studies and financial studies including those by Halcrow. In total DfID provided £2.8 million in technical assistance to the privatization process”.*

*Information from Peter Salmon a UK based financial journalist.

So what the above clearly shows is that as part of the West’s aid policy to Ghana/Afrika is linked to privatization programs that are NOT in the national interest of countries like Ghana but are for the economic interests of the West and now China and India who are also beginning to use these same tactics in their aid policy towards Ghana and Afrika.

Apart from this what many Ghanaians and Afrikans in general are not aware of is that for every $1 the West gives in aid it receives about $40 in return – so this again demonstrates the fallacy of receiving so-called aid from Western donors.

Corporate globalization is not a ‘natural state’ and it is not inevitable. It is the product of a specific project, emanating from a specific ideology, pursued by governments and institutions, creating specific policies that serve specific interests.

The time has come for the leadership of Ghana and Afrika as a whole to take a long hard and critical look at the relationships with ostensible “development partners” and to draw the conclusion that Afrika’s so-called development partners over the decades have given poor Afrikan countries just enough ‘aid’ to enable them to survive while continuing to milk the continent of its natural resources.

As Afrikan people we must begin to recognize that only ourselves are the masters of our destiny and that we must pursue policies and initiatives that are in the national or even continental interest and not in the interests of those whose sole motive is to loot Afrika’s resources for their own survival.


Dr. Kwame Osei