Health is a fundamental human right, recognized in the Universal Declaration of Human Rights (1948), and the Constitution of the World Health Organization (1946). Health is also an essential component of development, vital to a nation's growth and internal stability.


Over the past two decades, the World Bank and International Monetary Fund (IMF) have undermined Africa's health through the policies they have imposed. The dependence of poor and highly indebted African countries on World Bank and IMF loans has given these institutions leverage to control economic policy-making in these countries. The policies mandated by the World Bank and IMF have forced African governments to orient their economies towards greater integration in international markets at the expense of social services and long-term development priorities. They have reduced the role of the state and cut back government expenditure.

While many African countries succeeded in improving their health care systems in the first decades after independence, the intervention of the World Bank and IMF reversed this progress. Investments in health care by African governments in the 1970s achieved improvements in key health indicators. In Kenya, for example, child mortality was reduced by almost 50% in the first two decades after independence in 1963 (1). Across sub-Saharan Africa, the first decades after independence saw significant increases in life expectancy, from an average of 44 years to more than 50 years (2).

In the 1980s and 1990s, however, African governments had to cede control over their economic decision-making in order to qualify for World Bank and IMF loans. The conditions attached to these loans undid much of the progress achieved in public health. The policies dictated by the World Bank and IMF exacerbated poverty, providing fertile ground for the spread of HIV/AIDS and other infectious diseases. Cutbacks in health budgets and privatization of health services eroded previous advances in health care and weakened the capacity of African governments to cope with the growing health crisis. Consequently, during the past two decades the life expectancy of Africans has dropped by 15 years (3).

Africa Action calls for an end to World Bank and IMF policies that undermine health. This requires canceling the debts that prevent African governments from making their full contribution to addressing the health crisis. It also requires ending the imposition of harmful economic policies as conditions for future loans or grants.

This position paper provides a brief background overview of World Bank and IMF policies. It focuses particularly on their impact on health.

1. The World Bank and IMF in Africa

The World Bank and IMF were created at the Bretton Woods Conference in New Hampshire, U.S.A., in 1944. They were designed as pillars of the post-war global economic order. The World Bank's focus is the provision of long-term loans to support development projects and programs. The IMF concentrates on providing loans to stabilize countries with short-term financial crises.

The World Bank and IMF became increasingly powerful in Africa with the economic crisis of the early 1980s. In the late 1970s, rising oil prices, rising interest rates, and falling prices for other primary commodities left many poor African countries unable to repay mounting foreign debts. In the early 1980s, Africa's debt crisis worsened. The ratio of its foreign debt to its export income grew to 500% (4). African countries needed increasing amounts of "hard currency" to repay their external debts (i.e. convertible foreign currencies such as dollars and deutschmarks). But their share of world trade was decreasing and their export earnings dropped as global prices for primary commodities fell. The reliance of many African countries on imports of manufactured goods, which they themselves did not produce, left them importing more while they exported less. Their balance of payments problems worsened and their foreign debt burdens became unsustainable.

African governments needed new loans to pay their outstanding debts and to meet critical domestic needs. The World Bank and IMF became key providers of loans to countries that were unable to borrow elsewhere. They took over from wealthy governments and private banks as the main source of loans for poor countries. These institutions provided "hard currency" loans to African countries to insure repayment of their external debts and to restore economic stability.

The World Bank and IMF were important instruments of Western powers during the Cold War in both economic and political terms. They performed a political function by subordinating development objectives to geostrategic interests. They also promoted an economic agenda that sought to preserve Western dominance in the global economy.

Not surprisingly, the World Bank and IMF are directed by the governments of the world's richest countries. Combined, the "Group of 7" (U.S., Britain, Canada, France, Germany, Italy and Japan) hold more than 40% of the votes on the Boards of Directors of these institutions. The U.S. alone accounts for almost 20% (5).

It was U.S. policy during the Reagan Administration in the early 1980s, to expand the role of the World Bank and IMF in managing developing economies (6). The dependence of African countries on new loans gave the World Bank and IMF great leverage. The conditions attached to these loans required African countries to submit to economic changes that favored "free markets."

This standard policy package imposed by the World Bank and IMF was termed "structural adjustment." This referred to the purpose of correcting trade imbalances and government deficits. It involved cutting back the role of the state and promoting the role of the private sector. The ideology behind these policies is often labeled "neo-liberalism," "free market fundamentalism,"or the "Washington Consensus." From the 1970s on, this orientation became the dominant economic paradigm for rich country governments and for the international financial institutions.

The basic assumption behind structural adjustment was that an increased role for the market would bring benefits to both poor and rich. In the Darwinian world of international markets, the strongest would win out. This would encourage others to follow their example. The development of a market economy with a greater role for the private sector was therefore seen as the key to stimulating economic growth.

The crisis experienced by African countries in the early 1980s did expose the need for economic adjustments. With declining incomes and rising expenses, African economies were becoming badly distorted. Corrective reforms became increasingly necessary. The key issue with adjustments of this kind, however, is whether they build the capacity to recover and whether they promote long-term development. The adjustments dictated by the World Bank and IMF did neither.

African countries require essential investments in health, education and infrastructure before they can compete internationally. The World Bank and IMF instead required countries to reduce state support and protection for social and economic sectors. They insisted on pushing weak African economies into markets where they were unable to compete with the might of the international private sector. These policies further undermined the economic development of African countries.

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