The Ambassador of Senegal to China, Ibrahima Sory Sylla has criticized the World Bank and International Monetary Fund (IMF) for restrictive lending practices to African nations.
The ambassador stated this at a public event at Peking University, China where he complained of poor ratings being used to determine the creditworthiness of African countries.
He said,
- “The problem is that the ratings we are making for the African [countries] should be different.”
- He pointed out that evaluations from Fitch or Standard and Poor’s do not consider local factors like food security. However, these ratings serve as the foundation for the IMF and World Bank’s evaluations of economic sustainability.
- In his words, “What we can understand is that so many [multilateral development banks] through the G20 [debt] suspension initiative, they said you have to go through this initiative, but when you [do so], they suddenly decided to downgrade your risk,”
- “And most of the developed countries, the Western countries, they can go beyond 200% of the ratio between the debt and the GDP. Their rating is not downgraded.”
Another view
Also speaking at the event was the lead economist at the Asian Infrastructure Investment Bank, Jang Ping Thia who said those at the IMF and World Bank believe that their debt sustainability framework is feasible.
He said,
- “My sincere belief is that IMF officials, World Bank officials, they are sincere in their belief that their debt sustainability framework works and works for the greater good,”
- “Many times, the IMF chief at the desk, try their best to stretch the envelope for the country,”
What you should know
Many African countries have been faced with unsustainable debts in recent times that have forced them to raise taxes and cut down on subsidies.
Last year, Ghana defaulted on its debt obligation and Kenya will have to pay its $2bn Euro bonds in 2024.
Sub-Sahara’s debt-to-GDP ratio jumped by 60% in the last decade and could increase by a further 10% by 2028 if the current trend does not change according to a report from the IMF.
