IMF on IMF's role in Sub-Sharan Africa

Independent Evaluation Office of IMF has released a report on The IMF and Aid to Sub-Saharan Africa;

Some of the findings;

PRGF programs catalyzed available aid-through their macroeconomic assessment and support for country efforts to improve fiscal governance. But IMF staff did little to mobilize additional aid or to analyze and communicate policy and aid alternatives beyond the most likely scenario. The IMF Executive Board remains divided on these issues, and IMF policy is unclear.

PRGF programs accommodated the use of incremental aid in countries with low inflation and adequate international reserves. In other countries, PRGFs typically programmed at least part of the additional aid to be saved. This differentiated approach is consistent with IMF policies on aid accommodation, single-digit inflation, and reserve accumulation. But neither the policies nor their rationale were well communicated to aid providers, civil society, and other stakeholders in individual country situations.

PRGF provisions on poverty reduction and growth were less systematically implemented than those on fiscal governance. IEO attributes the weaker staff performance in these areas to less consistent Board and Management guidance, greater distance from the IMF's core macroeconomic mandate, and less effective collaboration between IMF and World Bank staff. PRGF programs took little note of linkages between spending on infrastructure and the economy's supply-side response-despite the implications for the macroeconomic assessment-and made limited use of poverty and social impact analysis, in part reflecting weak coordination with the World Bank. The report did find evidence of PRGF support for government spending on health and education, especially out of savings from debt relief.

The IMF's public posture and communications on aid and poverty reduction differed from its operational policies and practices. IMF communications oversold what the institution committed to do-and did-on aid and poverty reduction. They undersold the institution's contribution through its support for enhanced macroeconomic stability, fiscal governance, and debt relief.

IMF staff missed opportunities for outreach to local donor groups and civil society. One consequence was that the Fund was slow to recognize how its work would be affected by ongoing changes in the aid environment, such as bilateral donors' shift to budget support. Another was that PRGF programs' considerable attention to fiscal governance received little notice from local civil society organizations concerned about public financial accountability.

See also Monetary and Fiscal Policy Design Issues in Low-Income Countries