Monday, June 24, 2024

IMF still forcing austerity on Africans


It’s reported that, ‘Police in Kenya have clashed with protesters rallying against a controversial finance bill that the East African country’s government is pushing through parliament. One person has been shot dead and at least 105 others have been arrested across the country, a coalition of rights groups said.

Protests broke out in Kenya in response to the government’s 2024 Finance Bill, which passed the second stage of reading.

A parliamentary committee recommended that the government withdraw some new taxes proposed in the bill, including an annual 2.5% tax on car ownership and a 16% tax on bread, following a public outcry.

The government has justified the tax measures as necessary to reduce the country’s budget deficit, but protesters argue that they will be harmful to the economy and escalate the already high cost of living.

The finance bill is in response to the International Monetary Fund’s recommendation that Nairobi make a “sizable and upfront” fiscal adjustment in its 2024/25 budget to reduce state borrowing.’

The below from SOYMB 21 April 2022

‘The conditions of nearly 90% of the International Monetary Fund's pandemic-related loans are forcing developing nations suffering some of the world's worst humanitarian crises to implement austerity measures that fuel further impoverishment and inequality, an analysis published by Oxfam International revealed. 13 out of the 15 IMF loan programs negotiated during the second year of the pandemic require new austerity measures such as taxes on food and fuel or spending cuts that could put vital public services at risk.This stands in stark contrast with IMF managing director Kristalina Georgieva's advice to the European Union last year that the wealthy bloc should not endanger its economic recovery with "the suffocating force of austerity."

"This epitomizes the IMF's double standard," Oxfam International senior policy adviser Nabil Abdo said in a statement. "It is warning rich countries against austerity while forcing poorer ones into it."

The IMF has reverted to its highly controversial practice of requiring nations to

 impose the type of austerity measures that have exacerbated poverty and

 inequality, stymied countries' efforts to meet climate goals, fuelled global unrest,

 and even played a key role in sparking revolutions. For example, the conditions

 of a 2021 loan of $2.3 billion to Kenya compelled the country to freeze public

 sector pay for three years while mandating higher taxes on food and cooking

 gas. More than three million Kenyans are facing acute hunger as the driest

 conditions in decades spread a devastating drought across the country. Oxfam

 notes, "Nearly half of all households in Kenya are having to borrow food or buy

 it on credit."

Meanwhile, Sudan has had to end fuel subsidies, a policy that has disproportionately affected the nearly 50% of the population that is impoverished. Over 14 million people need humanitarian assistance (almost one in every three people) and 9.8 million are food insecure in Sudan, which imports 87% of its wheat from Russia and Ukraine.

Nine nations including Cameroon, Senegal, and Surinam must introduce or increase the collection of value-added taxes (VAT), which often apply to everyday products like food and clothing, and fall disproportionately on people living in poverty; and

Ten countries including Kenya and Namibia are likely to freeze or cut public sector wages and jobs, which could mean lower quality of education and fewer nurses and doctors in countries already short of healthcare staff. Namibia had fewer than six doctors per 10,000 people when Covid-19 struck’.

87% of IMF Loans Forcing Austerity on Crisis-Ravaged Nations: Analysis (