Africa-Press – Angola. The vice-president of CEDESA – Center for Studies on Economic and Social Development in Africa – said that the International Monetary Fund (IMF) failed in its interventions in Angola by ignoring the particularities of the country and the continent.
Rui Verde says there is a “simple technical-methodological problem” that results from “the paradigm the IMF follows for its interventions having nothing to do with Africa,” since it “is based on theoretical models of the functioning of an advanced market economy in the West that do not take into account the history, the institutional context, the knowledge of local communities, and the entire sociopolitical framework of Africa.”
In an analysis of the IMF’s various interventions in Angola, entitled ‘IMF in Angola, a history of failures’, the researcher at the University of Paris Cité and the University of Oxford reviews the technical and financial assistance programs in the second largest oil producer in sub-Saharan Africa and highlights the lack of reforms that change the economy and do not focus solely on improving public accounts and macroeconomic indicators.
“The IMF’s intervention in 2021 helped Angola avoid an immediate financial crisis, but it did not address the structural problems that prevent the country from achieving inclusive and resilient growth; the lack of diversification, institutional fragility, and the absence of a clear strategy to combat poverty and inequality continue to limit Angola’s economic potential,” argues the fellow at Chatham House.
One example he cites is the defense of the removal of fuel subsidies, one of several unpopular measures the IMF has advocated for Angola, as well as for other African countries, arguing that this state spending should be channeled into investment and support for the most disadvantaged segments of the population.
This measure, says Rui Verde, “appears to have a financial rationale of saving public spending, and many economists support it. However, the reality is that it significantly worsens the people’s standard of living, which is already fragile, has cascading inflationary consequences, and doesn’t make much sense when the fuel distribution market doesn’t operate in competition, but has an oligopolistic dominance structure.”
Furthermore, he continues, “the State maintains operating expenses promoted by the regime’s elites that are unsustainable and absurd, which creates fundamental imbalances in the Angolan political-economic system that the IMF is either unaware of or unwilling to understand.”
The researcher insists that “the failure of IMF programs in Angola” has deep roots that go beyond merely economic issues — they involve historical, political, epistemological and institutional dimensions”, which result from having designed the programs “based on standardized macroeconomic models, focused on fiscal stability and market liberalization, often ignoring the unique contexts of African economies”.
The Fund, it concludes, also fails “to underestimate the complexity of African institutions,” characterized by “a lack of administrative capacity, the prevalence of systemic corruption, and state capture by political elites.”
These problems, he believes, are not sufficiently addressed in technical and financial assistance programs, which should be “creating a new economy, not applying recipes from one model to a completely different model.”
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