The World Bank and the International Monetary Fund (IMF) present two leaders in the international financial institutions globally. These are the major lending sources which African countries rely on. However, they use their ability to provide loan, as well as the loans they have already given, as leverage for prescribing policies and also dictating major changes in the African economies (Pettifor, 2007). A reason for this is that the U.S has the largest shares of 17%, while all African countries combined have a share of less than 9% (Wolff, 2013). Therefore, the system requires that the lending banks must always make the needs of the majority shareholders first before the rest.
Whenever developing countries need financial assistance, the only place to go to is to either of these leading institutions. Unfortunately, in return for the service, the countries are forced to adopt “structural adjustment programs” alongside other measures that help to minimize the government spending on some basic services so as to benefit the majority shareholders. For instance, the Zambian government has been expected to reduce the preset trade barriers and maintain their economies so the other countries will have a source of cheap raw material and labor for their corporations (Pettifor, 2007).
Due to these policies given by the lead lending institutions, the average income in Zambia has Reduced drastically, a factor that greatly contributes to the poverty of the continent as well. The same policies have also affected the health of people in the country. The government is expected to reduce spending even on health care and the privatization of certain basic services (Wolff, 2013). The leaders of this country are no longer in control, as the lending institutions have implemented policies that grant them a right to demand changes in systems of leadership and influence their decisions as well.
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