April 17, 2024

IMF demands transparency on African debts


By Emma Ujah, Washington, DC 

The IMF has advocated a legal and legislative framework to compel governments of African countries to be transparent with their debt data.

The position of the Fund was expressed by Ms. Yan Liu, Deputy General-Counsel, IMF Legal Department at a panel discussion   on “Understanding Sovereign Debt in Africa, at the on-going IMF/World Bank Spring Meetings in Washington DC, USA.

According to her, “The African Debt situation has become very complex.   We have recently reviewed the situation, and it requires disclosure of public debt data. The stakeholders, the people, need to have clear information about the debts of their countries. There should be clear legislations in this  regard.

“The legal requirement is necessary to stop hiding of debt, how is it used” with a view to ensuring that loans taken by African countries were judiciously utilized in the interest of the people.”

The IMF, Ms. Liu said, would help countries strengthen their legal and institutional framework with a view to making debt transparent.  

The IMF official said that debt was not something really bad but that the important point was the use to which borrowed monies were put.

She said, “There are good debts and bad debts. Good debt when it is used for the good of the people.   Debt is bad when it is not used in a responsible way.”

The Deputy General-Counsel said that borrowing was often necessary because domestic savings in many countries were not enough to fund development projects and as such, care must always be taken when assessing debt issues.