World Bank, IMF, are back to Africa only that this time we were first to visit them

In the last few years, Africa has rediscovered an old enemy in the shape of the International Monetary Fund (IMF) and World Bank – the so-called Bretton Woods institutions.

Now, the Bretton Woods institutions have a lot to answer for in Africa, but they are being crucified for the wrong sins.

They earned a lot of hostility in the late 1980s to early 2000s, for “forcing” neo-liberal reforms (market-oriented policies such as eliminating price controls, reducing state influence on the economy through privatisation, introducing floating foreign exchange rates, slashing the size of bloated civil services, lowering trade barriers, and so forth).

In the mini economic boom that followed, and produced the “Africa rising” euphoria, the dramatic rise of Chinese investment and easy money that flowed into the continent, the World Bank and IMF profiles receded. Governments were issuing Euro bonds willy-nilly, and the dough was rolling in – and being squandered.

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Then the Financial Crisis of 2007-2009, the post-Arab Spring jihadist violence roiled Northern Africa, Sahel, and West Africa, then the Covid-19 pandemic, and all the shine went up in smoke. Most of Africa is up to its ears in debt, and the continent is strewn with struggling or empty National Treasuries... and the IMF and World Bank are back in business. The Bretton Woods hate fest is fully on.

But there is an inconvenient story that goes a little back, to the post-independence two decades. I know of a Ugandan family, the man and wife were very talented. But they came from what Kenyans would call a “marginalised” community, and in post-independence, they supported the “wrong” party – the long-term opposition Democratic Party (DP).

Brilliant as they might have been, there was a disparity between them and their colleagues at work. Many of their colleagues were supporters of the ruling Uganda People’s Congress (UPC) and frequently went to party events. They would return with expensive toys for their children, and things like bicycles. They also somehow had more financial resources.

The brilliant but marginalised couple were, nevertheless, still able to provide for their family – but they had to do so by becoming among Uganda’s first generation of professionals with side hustles.

The UPC government of Milton Obote was overthrown in 1971, and though the Ugandan economy tanked, they thrived as their enterprising ways kicked up.

Years later, in January 1986, President Yoweri Museveni’s National Resistance Army (NRA) took power after a bush war, and in 1988 after two years of failed statist policies, his government embraced the free market with a vengeance. There was carnage, as thousands of civil servants and workers in bloated and bankrupt state enterprises were laid off as they were privatised.

The couple, now retired, did even better in a liberalised economy. The story of their lives and the exclusion they faced in the 1960s was not peculiar to them. It was the exclusion of millions of Ugandans – and Africans – who were either minorities, belonged to or from opposition strongholds, prayed in the wrong churches, or had names from communities that were not the “ones in power”.

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For these people around Africa, a degree of liberation came from the World Bank and IMF conditionalities of the last two decades of the 20th century.

The end of subsidies levelled the playing field, so they now could buy goods at the same prices as the previous privileged classes and had equal access to many services. They could now sell their crops (cotton, coffee, maize, beans) at competitive prices on the free market, instead of getting only a quarter of their real price, six months late, if at all, after the ruling party-affiliated fat cats in the state produce marketing monopolies had creamed off most of the value and lined their pockets.

Foreign exchange used to be allocated to this partisan parasitic class below market value, while opposition businesses and other less privileged citizens paid thrice the rate. Free foreign exchange ended that injustice and exploitation. In state-controlled housing markets, the regime supporters and mates of the powerful people in politics got allocated the best first.

The end of that madness in the economic reforms destroyed that privilege, even as it sent housing prices and rents high.

For certain marginalised groups and minorities in Africa, independence came with conditionalities. There is no denying the destruction to many workers, and even how painful the collapse they caused of the old statist economy was.

But it was a pain millions of citizens who were considered “wrong” in one way or the other had lived through for decades. And it has to be asked, why should civil servants and state employees have a greater right to jobs and social security than other taxpayers? Those who were excluded from the privileges of the state-controlled economy, have to be forgiven for telling the foes of the World Bank and IMF to go eat their hats.

Now we are back at it, with the Bretton Woods imposing austerity. But they didn’t ride on horseback down from the hills and impose them on African governments at gunpoint. Our leaders went to Washington with hat in hand to beg for the loans. They were waving white flags, having bankrupted their economies through corruption and incompetent management.

What having to depend on the World Bank and Co. for our lunch says about us, is what frightens us. An understandable coping mechanism is to lash out – and it suits the governments that way.

The World Bank crowd have a lot to answer for, but their bigger problem is that they are enabling delinquent governments. They are like the pub owner who gives the most credit to their most drunkard patrons.

Charles Onyango-Obbo is a journalist, writer, and curator of the “Wall of Great Africans”. X@cobbo3