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How the government of Malawi expelled the IMF from the nation

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Officially, the IMF assists developing nations in avoiding debt-related problems and bankruptcy. The International Monetary Fund should lend them money and offer them technical assistance so they can accomplish this. Apart from that, the IMF defends a number of the richest nations, their bankers, and risky financial companies, but its help to the small African nation of Malawi turned into their worst nightmare.

Malawi was facing terrible economic hardships, an AIDS pandemic, and a violent regime in the late 1990s. Malawi asked the IMF for a loan for development. If the Malawian government followed its charter, it would assist them in starting down the route to prosperity taken by all industrialized nations, including the United States, Britain, and France.

The West and the US governments claimed as much, but it has never been shown that the same nations steal more from Africa than they donate to underdeveloped nations.

The IMF stated that progress will be made by assisting local economies in growth, providing agricultural subsidies, and making investments in health and education. Any government that is accountable to its people must do all of this. The IMF, on the other hand, took a different approach and made structural requirements for its loans.

Malawi was compelled to halt all financial support for the populace, including fertilizer subsidies, yet it’s only fertilizer subsidies helped local farmers in South-East Africa’s dry region to feed the nation and make ends meet. The IMF established a hierarchy of needs, giving money to foreign financial institutions first and Malawians last. It ended in disaster.

The IMF required the Malawian government to sell all of its emergency grain stocks to private enterprises to receive financial tranches in 2001. The government attempted to object, highlighting how risky all of this is in the local environment in the event of a crop failure.

The International Monetary Fund representatives were insistent, and international financial speculators prevailed. The predatory IMF debt was serviced at a rate of 56% annually using the proceeds from the sale of grain reserves.

Malawi did, however, face a drought and crop failure in 2002 and an awful famine started. Rats and tree bark were consumed by the people and entire villages perished. The government lacked the resources or reserves necessary to aid the starving people.

However, despite the worst drought and agricultural failure, ten years prior, in 1991–1992, there was no famine in Malawi, since the government had made reservations at the time.

The IMF postponed a second payment of $47 million at the height of the famine because the Malawian government “slowed down market reforms.” The ‘ActionAids’ research concludes that the International Monetary Fund is responsible for the calamity.

“Don’t Rejoice Regarding Ghana’s $3 Billion IMF Bailout; It’s More Of An Enslavement Tool To Increase The Hardships Of Ghanaians,” was my last post about the IMF, which was published on December 14, 2022. In it, I discussed the unpleasant experiences other African countries had with the International Monetary Fund.

The IMF was simply ousted from Malawi as it was shown that they were to blame for the disaster, and subsidies and public services were reinstated. The nation has turned from a food importer to an exporter in just two years, regaining its former riches. Malawi sent a significant amount of food aid during the famine to the neighboring countries of Zimbabwe and Uganda.

The case of Malawi is not an exception, but rather the norm in the IMF’s operations. In Kenya, charging a fee for doctor visits was mandated by the IMF. As a result, there were hundreds more cases of AIDS infection but 65% fewer women sought a venereologist’s help.

The article’s relevance is that African leaders must start telling their people the truth about how seeking assistance from the International Monetary Fund worsens the situation for emerging nations rather than improving it. It’s time for Africa to have capable, hardworking leaders who would fight corruption and use resources to strengthen their countries, reducing foreign debts in the process.

The West and the US governments claimed as much, but it has never been shown that the same nations steal more from Africa than they donate to underdeveloped nations.

The IMF stated that progress will be made by assisting local economies in growth, providing agricultural subsidies, and making investments in health and education. Any government that is accountable to its people must do all of this. The IMF, on the other hand, took a different approach and made structural requirements for its loans.

Malawi was compelled to halt all financial support for the populace, including fertilizer subsidies, yet it’s only fertilizer subsidies helped local farmers in South-East Africa’s dry region to feed the nation and make ends meet. The IMF established a hierarchy of needs, giving money to foreign financial institutions first and Malawians last. It ended in disaster.

The IMF required the Malawian government to sell all of its emergency grain stocks to private enterprises in order to receive financial tranches in 2001. The government attempted to object, highlighting how risky all of this is in the local environment in the event of a crop failure.

The International Monetary Fund representatives were insistent, and international financial speculators prevailed. The predatory IMF debt was serviced at a rate of 56% annually using the proceeds from the sale of grain reserves.
Malawi did, however, face a drought and crop failure in 2002 and an awful famine started. Rats and tree bark were consumed by the people and the entire villages perished. The government lacked the resources or reserves necessary to aid the starving people.

However, despite the worst drought and agricultural failure, ten years prior, in 1991–1992, there was no famine in Malawi, since the government had made reservations at the time.

The IMF postponed a second payment of $47 million at the height of the famine because the Malawian government “slowed down market reforms.” The ‘ActionAids’ research comes to the conclusion that the International Monetary Fund is to responsible for the calamity.

“Don’t Rejoice Regarding Ghana’s $3 Billion IMF Bailout; It’s More Of An Enslavement Tool To Increase The Hardships Of Ghanaians,” was my last post about the IMF, which was published on December 14, 2022. In it, I discussed the unpleasant experiences other African countries had with the International Monetary Fund.

The IMF was simply ousted from Malawi as it was shown that the IMF was to blame for the disaster, and subsidies and public services were reinstated. The nation has turned from a food importer to an exporter in just two years, regaining its former riches. Malawi sent a significant amount of food aid during the famine to the neighboring countries of Zimbabwe and Uganda.

The case of Malawi is not an exception, but rather the norm in the IMF’s operations. In Kenya, charging a fee for doctor visits was mandated by the IMF. As a result, there were hundreds more cases of AIDS infection but 65% fewer women sought a venereologist’s help.

The article’s relevance is that African leaders must start telling their people the truth about how seeking assistance from the International Monetary Fund really worsens the situation for emerging nations rather than improving it. It’s time for Africa to have capable, hardworking leaders who would fight corruption and use resources to strengthen their countries, reducing foreign debts in the process.

 

Columnist: Joel Savage

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