PoliticsNews & Analysis‪Africa in 2012: Afro-Med transitions, markets and politics‬

Fri,24Nov2017

Posted on Friday, 02 December 2011 17:18

‪Africa in 2012: Afro-Med transitions, markets and politics‬

By The Africa Report

When Abeokuta's son and playwright Wole Soyinka called Italians "white Nigerians" he may not have had in mind Rome's billionaire prime minister Silvio Berlusconi, who during his nearly two decades in power has fought off a string of court actions questioning the probity of his financial dealings and proclivity for sex with minors.

Yet Berlusconi's arrogance, flamboyant style and eventual sacking does mirror the career of more than a few Nigerian politicians.


More significantly, the way that the markets and the rating agencies have driven Berlusconi from power, together with other European leaders such as Greece's George Papandreou, Portugal's José Sócrates and Spain's José Luís Zapatero will revive echoes of the IMF coups across Africa in the 1980s.

Then men in suits arrived in African capitals bearing policy prescriptions – 
involving redundancies and savage cuts to state spending – to be obeyed if the government wanted a structural adjustment loan from the fund.


Cash-strapped governments faced grim choices: refuse the IMF deal and watch state borrowing spiral out of control or accept its medicine and risk 
being overthrown by politically ambitious soldiers.

To this day the IMF's "sanitary inspectors", as Nigerian economist Pius Okigbo called them, have a poor reputation in Africa.

Big economies such as Nigeria, South Africa and Egypt are reluctant to borrow from the fund, fearful of losing policy sovereignty, despite assurances from earnest economists in Washington that everything has changed.


The pas de deux between Egypt's military rulers and IMF officials in 2011 points to how bad things could get 
after the revolutions and as economic gloom in the US and Europe deepens.

The IMF's offer of a $3bn loan in June was rejected.

Although Egypt's economy was growing at less than 2 percent, the ruling soldiers increased spending by 15 percent to finance more clinics and schools.

Faced with a worsening fiscal gap, the generals called back the IMF in November.

Food and fuel subsidies consume one third of the budget: they may be financially unsustainable but for the generals they are politically indispensable as they steer an increasingly messy transition.


To whom will the balance tilt in 2012?

Can the IMF afford to tough it out with the generals or are the political risks of another regime change simply too great?

For now, it looks Egypt's military rulers may be in a stronger negotiating position than their besuited counterparts on the other side of the Mediterranean.

 

Photo Credits‬

‪Ben Ali © Hadj-Sipa SIPA‬
‪Berlusconi © Andrew Medichini-AP-SIPA‬
Gaddafi © Joseph Eid-AFP‬
Papandreou © Kostas Tsironis-AP-SIPA
Mubarak © Amr Nabil-AP-SIPA



Last Updated on Friday, 02 December 2011 18:31

Subscriptions Digital EditionSubscriptions PrintEdition

FRONTLINE

NEWS

POLITICS

HEALTH

SPORTS

BUSINESS

SOCIETY

TECHNOLOGY

COLUMNISTS

Music & Film

SOAPBOX

Newsletters

Keep up to date with the latest from our network :

subscribe2

Connect with us