ActionAid questions IMF debt assessments
The ActionAid Federation has criticised the International Monetary Fund’s (IMF) approach to debt sustainability assessments, arguing that they continue to place greater emphasis on governments’ ability to repay debt than on investments in essential public services.
According to the Federation, the IMF’s debt framework is constraining efforts by developing economies, including Ghana, to reduce inequality and advance sustainable development by limiting fiscal space for critical sectors such as health and education.
The concerns are contained in the Federation’s latest report titled, “Still Cooking with a Failed Recipe: A Review of IMF Country Advice on Social Spending, Public Services, Debt, Tax and Gender Equality,” which assesses the impact of IMF policy advice on borrowing countries.
A copy of the report, made available to the Ghana News Agency in Tamale, states that although the IMF has consistently pledged to protect vulnerable populations and support sustainable development, its country-level policy advice continues to prioritise fiscal consolidation and debt repayment over social investment.
The report analysed 29 IMF documents issued between February 2022 and February 2025 across 11 countries, namely Ghana, Brazil, Kenya, Malawi, Nepal, Nigeria, Senegal, Uganda, the United Kingdom, Zambia and Zimbabwe. The documents reviewed included Article IV consultation reports, lending programme documents and technical assistance reports.
According to the report, the review uncovered a notable disconnect between the IMF’s stated policy objectives and the recommendations it provides to member countries. It found that debt sustainability assessments remain primarily focused on governments’ capacity to meet debt obligations, with limited attention given to social spending requirements, human rights commitments and long-term development priorities.
The report further observed that none of the IMF documents reviewed for the eight African countries compared external debt repayments with expenditure on health and education, despite debt servicing exceeding health spending in seven of those countries.
It also argued that IMF-backed debt restructuring programmes have generally failed to generate adequate fiscal space for governments to expand investments in health, education and other essential public services.
Drawing on existing research, the report noted that countries advised to continue servicing their debts in full experienced an average 18 per cent reduction in health expenditure and a 16 per cent decline in education spending.
The Federation said the findings come at a time when 54 countries are facing debt crises, while an estimated 3.3 billion people live in countries that spend more on debt servicing than on health and education.
Among its recommendations, the report called on governments to implement progressive and gender-responsive tax reforms capable of increasing tax-to-GDP ratios by at least five percentage points by 2030 to strengthen domestic resource mobilisation and finance quality public services.
It also urged governments to review policies that facilitate capital outflows and support negotiations towards a United Nations Framework Convention on International Tax Cooperation aimed at promoting a fairer and more equitable global tax system.
In addition, the report recommended that IMF loan agreements, technical assistance arrangements and other international economic agreements be subjected to parliamentary scrutiny and broad public consultation to improve transparency, strengthen accountability and safeguard national interests.
