Abstract:
This study focuses on the debtor-creditor relationship between African states and the International Financial Institutions (IFIs). More specifically, it makes use of ‘post-positivist’ approaches as analytical tools and it compares the controversial Structural Adjustment Programmes (SAPs) with so-called ‘post-SAPs’ in order to establish whether the latter debt relief strategies are an improvement on the former. Post-SAPs include, amongst others, the Enhanced Heavily Indebted Poor Countries Initiative (HIPC II) and Poverty Reduction Strategy Papers (PRSPs). Jointly, the post-SAPs initiatives aim to make debt more sustainable, boost social spending and reduce poverty. The PRSP initiative in particular was full of promise (at least initially), as it entailed that debtors would rightfully be given the scope to create their own developmental strategies and that a blanket approach to development would be abandoned. Upon closer inspection the PRSP initiative is disappointing. The process itself is predetermined and there are additional IFI mechanisms (with traditional SAPs conditionalities) that should be read alongside this initiative. As the Great Recession starting in 2007 unfolded, the IFIs tended to stress the success and ‘resilience’ of HIPC II and PRSP countries. However, this study argues that supposed achievements are somewhat artificial and one needs to remain cautious about its long-term impacts. African economies experienced high economic growth rates in recent years, not because of World Bank and IMF endorsed policies, but because of debt relief and a commodity boom in the 2000s. The IFIs have not done anything to forge the developmental state in Africa. Several HIPC II and PRSP graduates are already starting to show signs of debt distress. Thus, there is a need to seriously rethink the roles of the World Bank and IMF in Africa. This study recommends that true adherence to the PRSP approach could be a first step to empower African states, and it calls for the establishment of an independent mechanism that will hold debtors and the IFIs accountable for unsustainable debt.
