African Governments’ Pledged to Safeguard IMF Funds from Corruption

Headquarters of the International Monetary fund
Credit: Carol M. Highsmith, Public domain, via Wikimedia Commons

The International Monetary Fund (IMF) has been at the forefront of supporting Sub-Saharan Africa (SSA) in the battle against the Coronavirus pandemic. The IMF has since the early part of 2020 financed 33 SSA countries to the tune of $16 billion. Crucially, the IMF insisted on what it calls ‘governance mechanisms’ to ensure that the money is not lost to graft.

It is too early to tell whether or not the governance mechanisms instituted by the different SSA countries prevent corruption. The purpose here is to summarize the pledges SSA countries made to the IMF. Perhaps, a year from now, with monitoring and evaluation data on hand, a clearer picture on how SSA fought graft will emerge. 

Thirty-three Sub-Saharan African countries received a total of $16 billion financing from the IMF since the Covid-19 pandemic struck. South Africa received the largest share at $4.3 billion followed by Nigeria with $3.4 billion. The IMF‘s financing to SSA may be summed up as follows:

  • Angola: $1 billion 
  • Burkina Faso: $115.3 million
  • Chad: $183.6 million
  • Cameroon: $226 million
  • Côte d’Ivoire: $886.2 million
  • Congo: $363.2 million
  • DR Congo: $363.27 million
  • Gabon: $147 million
  • Ghana: $1 billion
  • Guinea: $183.60 million
  • Eswatini: $110.4 Million
  • Ethiopia: $411 million
  • Kenya: $739 million 
  • Madagascar: $337.9 million
  • Mali: $200 million
  • Malawi: $91 million
  • Mozambique: $309 million
  • Niger: 114.4 million
  • Nigeria: $3.4 billion
  • Rwanda: $220.4 million
  • Senegal: $442 million
  • South Africa: $4.3 billion
  • Uganda: $491.5 Million

SSA countries not listed here such as Tanzania, Burundi, Lesotho and Gambia received much less financing.

Examples of SSA countries’ pledges to the IMF for creating governance mechanisms

Here we look at three examples of SSA countries’ pledges for safeguarding IMF money from graft, namely, Kenya, Nigeria and South Africa.

The case of Kenya

When Kenya received $739 million in emergency financing from the IMF, the government pledged to institute governance mechanisms in the following terms: “We recognize the importance of safeguarding IMF and other financial assistance resources to ensure that such assistance is used for the very urgent purpose of resolving the current crisis. With that in mind, we commit to post-crisis auditing by our independent audit office of samples of crisis-related expenditures and publication of the results. More generally, we are strongly committed to ensuring effective and transparent use of public funds. To this end, we are working to strengthen our institutions and our capacity to detect illicit enrichment and to address conflict of interest in line with international best practices and Fund advice.”

The case of Nigeria

Nigeria promised to safeguard $3.4 billion emergency financing from the IMF in the following terms: “Our anti-corruption efforts will continue unabated. We will strengthen the role of the Federal Audit Board in combating corruption and are committed to strengthening the asset-declaration framework and fully implementing the risk-based approach to AML/CFT supervision while ensuring the transparency of beneficial ownership of legal persons. We fully recognize the importance of ensuring that financial assistance received is used for intended purposes. To that end, we will (i) create specific budget lines to facilitate the tracking and reporting of emergency response expenditures and report funds released and expenditures incurred monthly on the transparency portal (http://opentreasury.gov.ng/); (ii) publish procurement plans, procurement notices for all the emergency response activities— including the name of awarded companies and of beneficial owners—on the Bureau of Public procurement website; and (iii) publish no later than three to six months after the end of the fiscal year the report of an independent audit into the emergency response expenditures and related procurement process, which will be conducted by the Auditor General of the Federation—who will be provided the resources necessary and will consult with external/third party auditors.”

The case of South Africa

The South African government promised to safeguarding $4.3 billion of IMF’s emergency financing as follows: “On governance, meaningful reforms are being implemented in the South African Revenue Service, the Public Investment Corporation, and other institutions. New leadership has been appointed in various public entities; policies and procedures are being reviewed; and prosecution agencies have been given additional capacity to investigate and hold wrong-doers accountable. New procurement legislation, aimed at consolidating rules and management of the public procurement system within one framework, is set to be presented to parliament during the current fiscal year. Moreover, in line with the Public Financial Management Act, we are committed to transparently plan, use, monitor and report all Covid-19 related spending to ensure it reaches the targeted objectives, by: (1) publishing on a regular basis the execution of Covid-19-related expenditures, auditing such expenditure, including ex-post valuation of delivery, within 12 months of the end of the fiscal year, to be performed by the Auditor General and publishing the findings; and (2) publicly disseminating all Covid-19-related procurement contracts and allocation (with details about awarded companies and their beneficial owners).”

Looking ahead at the prospects of improved governance in SSA

Early signs indicate widespread pandemic-related graft across SSA especially in larger economies. Kenya’s president, Uhuru Kenyatta, had to order investigations into mega corruption at the state-run Kenya Medical Supplies Authority. Kenya’s Ethics and Anti-Corruption Commission is currently conducting an inquiry into the Covid-19-related corruption. In South Africa, a number of leaders in the ruling African National Congress (ANC) were implicated in fraud over the supply of personal protective equipment. This prompted South Africa’s president Cyril Ramaphosa to write an open letter to the ruling party in which he acknowledged that “the ANC and its leaders stand accused of corruption” and that “the ANC may not stand alone in the dock, but it does stand as Accused No 1.” Be that it may, time will tell if SSA turned its pledges into functioning anti-corruption institutions.

The views and opinions expressed in this article are those of the author.