Volume XXXII – Number 1
Festus L. Osunsade
Abstract:
This article discusses how liberalization of developing economies coupled with international loans, allows developing countries to nurture their economies and social sector. The article explores the various programs and policies undertaken by International Monetary Fund (IMF) in Africa. The two goals of the IMF are international monetary cooperation and supporting countries financially to acheive macroeconomic stability. When a country economically falters the IMF is available to offer transitional financial support. One tool is the enhanced Structural Adjustment Facility (ESAF) which gives loans to governments with an extended grace period at lower interest rates. ESAF is often used in Africa, which suffers from food shortages, inflation, and poverty. Prevention of these outcomes requires close cooperation between the IMF, the World Bank, and officials of the borrowing countries. The IMF’s substantial financial assistance and support for reform and growth has helped less affluent countries pursue sustainable economic growth. The IMF uses these programs alleviate the impact of adjustment policy measures on the most vulnerable members of the society. However, logistical and financial limitations arise during the planning and implementation of social safety net programs. Nevertheless, the financial policies implemented in African countries by the IMF are done in order to promote high quality growth.
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