As the IMF chief prepares to step down in September to lead the European Central Bank, the fight for the fund's next leader is on. Shoshana Kedem investigates Christine Lagarde's legacy in Africa
In 2000 the then managing director of the IMF, Horst Kohler, stepped off a plane into Nigeria's capital Abuja for a five-country "coast-to-coast" tour of the continent. His mission was to decide whether the Fund should cease lending to African countries for long-term development assistance and pass the function to the World Bank. This was the recommendation of a 1998 US Congress report by the Meltzer Commission.
Along the way, African leaders in Nigeria, Senegal, Cameroon, Mozambique and South Africa urged him to continue the Fund's presence. Before becoming Liberia's President, Ellen Johnson Sirleaf insisted to Kohler that the Fund was much-needed in Africa, but it had to stop being SAD--secretive, arrogant and domineering.
Kohler became convinced that the continent was integral to the IMF's two-fold mission: to provide global financial stability, and assist in the global war on poverty. He concluded: "There cannot be a good future for the rich if there isn't a better future for the poor."
Ever since, Africa has played a prominent role in IMF lending based on the understanding that unemployment, famine and climate change have a spillover effect on Western countries, says Mark Plant, a former IMF staffer and the director of sustainable development finance at the Centre for Global Development.
The views of the outgoing managing director, Christine Lagarde, are no exception. "Lagarde always had an eye for Africa ... she understood Africa well," Plant says. "She continued the trends that started with her three predecessors of opening up the IMF to more African decision-making. That Africans should take charge of their destiny in some ways, and that the Fund should be supportive rather than dictatorial."
A striking example of this came in 2014 with the Ebola epidemic outbreak in Sierra Leone, Guinea and Liberia. The IMF was the first to respond with $130m in immediate assistance to help balance payments and meet fiscal needs.
Lagarde, a former French finance minister, faced criticism that the epidemic wasn't a balance of payments crisis, and the IMF wasn't in the business of humanitarian aid. A lawyer by trade without the technical training of an economist, she saw the IMF as an agency that tackles problems with far-reaching economic consequences.