The overlords of Africa

The incumbent Prime Minister of Kenya, William Ruto's, new finance bill has resulted in big challenges in the state. Protests erupted around the nation, with large crowds swarming the parliament in Nairobi's capital until 30 people were murdered and 200 injured. Eventually, Mr. Ruto bowed to popular pressure and declared he would not sign the problematic measurement, which resulted in higher taxes on necessities like sugar, cooking oil, bread, and others.

Despite Mr. Ruto’s backing down, the protesters have stood firm and called for his resignation because they see him as the loyal puppet of the IMF. That is clear in the voices reflecting the public mood: "Kenya is not the IMF's lab rat.”.

Kenya and the IMF inked a $2.34 billion, four-year loan arrangement in 2021 and another $3.6 billion deal with additional tranches and restrictions. These two initiatives put the COVID-affected nation in the worst possible situation, causing an increase in taxation, budget cuts, and the removal of subsidies.

Mr. Ruto came to power in Sep 2022 with a good connection with the IMF and its policies. That’s why he cut subsidies on fuel and maize stupidly. But the protest, which claimed the lives of 30, compelled him to give up on all of his government's deals in half.It is not a new chapter.

 Kenya has been through this before, as have many African lands, whose leaders often find themselves caught between the interests of their peoples and those of Western commercial banks, fronted by the IMF. On one hand, the IMF describes itself as “being governed by and accountable to its member countries.” On the other hand, it presents an alternative narrative—that of an organization that has functioned as an instrument of US foreign policy to benefit Western financial elites.

1994 the IMF was created at a conference of 44 nations in Bretton Woods, New Hampshire, when the American economic might was a reality. Day by day, this power dynamic has matured and become encoded in Bretton Woods's twin institutions, the World Bank and the IMF.

Unwritten mandate

Theoretically, the function of the IMF is to aid economic development and promote monetary cooperation and stability for developing countries. But practically, they followed an unwritten mandate to boost the levels of American capital. It is clear in the undemocratic voting rights at the IMF, which follow the way of quota-driven, based on dollar contributions, where the U.S. alone has a voting share of 16.5% and the wealthy G-7 countries together command 40% plus voting power when Africa’s 54 countries, of which 31 had outstanding loans with the IMF, do not have a say in how the IMF is run.

This unfairness and unequal relationship with the IMF and other IMF-imposed economic policies like Structured Adjustment Programs (SAPs) have caused protests in many developing countries. SAPs, which were introduced in 1986, pressured the governments to cut public spending and private state enterprises and reduce import duties and tariffs. The outcome that we can predict from these policies is only extreme inequality.

Impact of SAPs

That‘s why the study of Structural Adjustment Participatory Review International Network in nine countries across four continents highlighted four ways in which they resulted: marginalization of local populations, loss of employment for small producers, loss for small farms and poor rural communities, and job losses, which all led to an increase in the poverty rate.

During these 30 years, the IMF continued to influence low- and middle-income nations and determine the fates of millions of people not in their parliament but locked in the boardrooms of the IMF headquarters, which made the New York Times call them “the Overlords of Africa.”.