By Stella Odueme
The International Monetary Fund (IMF) continues to function as a colonial-era “debt enforcer” despite years of reform rhetoric, according to a new report released by ActionAid International and its partners, which accuses the global financial institution of imposing harsh austerity measures on developing countries while encouraging wealthier nations to expand public spending.
The report released on Tuesday, titled Still Cooking with a Failed Recipe: A Review of IMF Country Advice on Social Spending, Public Services, Debt, Tax and Gender Equality, argues that the IMF’s policy prescriptions disproportionately burden low-income countries across Africa, Asia and Latin America, undermining investments in healthcare, education and social protection while prioritising debt repayments to foreign creditors.
The study, produced by ActionAid International, Education International, the Tax and Education Alliance and several civil society organisations, reviewed 29 IMF documents covering 11 countries between February 2022 and February 2025.
According to the findings, African countries spend an average of 7.6 percent of their national budgets on public sector wage bills, below the global average of 9 percent. Yet many continue to face IMF recommendations to freeze or reduce public spending, including spending on frontline workers such as teachers, nurses and doctors.
The report highlights what it describes as glaring inconsistencies in IMF policy advice.
While the United Kingdom, which spends approximately 15.9 percent of its Gross Domestic Product (GDP) on its public workforce, has been encouraged to expand public investment, lower-income countries such as Nigeria and Nepal, which spend just 1.9 percent and 2.5 percent of GDP respectively, have been advised to limit public expenditure.
ActionAid Secretary General, Arthur Larok, said the findings expose a financial system that continues to favour wealthy nations and creditors at the expense of vulnerable populations.
“The IMF’s recipe book is completely outdated,” Larok said.
“By forcing lower-income nations to squeeze public workers, cut social spending and prioritise foreign creditors over education and healthcare, the IMF is functioning as a global debt enforcer rather than a global development partner.”
The report examined IMF engagements with Ghana, Kenya, Malawi, Nigeria, Senegal, Uganda, Zambia and Zimbabwe, among others. Researchers found that despite repeated commitments to protect vulnerable populations, IMF-supported fiscal frameworks often resulted in spending restrictions that negatively affected public services.
The report also criticises the IMF’s continued support for public sector wage bill constraints, arguing that such measures ignore the realities of countries already spending very little on public employment and essential services.
Roos Saalbrink, Global Lead on Economic Justice at ActionAid International, described the institution’s approach as contradictory.
“The IMF bizarrely argues that cutting the wages of nurses, teachers and doctors is necessary to create space for priority spending, entirely ignoring that these frontline workers are the priority,” she said.
“At the same time, it encourages Global North countries to invest more in public services.”
Beyond public spending, the report raises concerns over the IMF’s response to the global debt crisis. It notes that approximately three-quarters of lower-income countries now spend more on servicing debt than on healthcare, yet the IMF has resisted broad debt cancellation initiatives.
According to the authors, this position effectively forces governments to impose austerity measures on citizens in order to meet obligations to international lenders.
The report further criticises IMF-backed tax reforms, particularly the continued promotion of consumption taxes such as Value Added Tax (VAT), which advocacy groups argue place a disproportionate burden on low-income households and women.
Jennifer Lipenga, Tax and Gender Equality Policy Advisor at the Tax and Education Alliance, said the institution’s tax recommendations fail to account for gender disparities.
“Feminist and women’s rights movements have increasingly shown that regressive taxes such as VAT have disproportionate impacts on lower-income households, particularly women and other structurally marginalised groups,” Lipenga said.
“Yet the IMF’s tax advice remains regressive and is not informed by gender impact assessments, nor does it reflect global gender equality commitments that countries have signed on to, such as CEDAW.”
The coalition behind the report argues that despite years of discussion around reform, the IMF remains fundamentally unchanged and increasingly unfit to address contemporary global development challenges.
The report calls on governments across the Global South to pursue alternative international financial frameworks and support emerging multilateral mechanisms, including proposed United Nations conventions on international tax cooperation and sovereign debt.
“It is time for the IMF to be retired, not reformed,” the report concludes, arguing that fairer and more democratic alternatives are needed to address global inequality, debt sustainability and development financing.
The report was co-sponsored by a broad coalition of organisations, including Afrodad, Akina Mama wa Afrika, Bretton Woods Project, CESR, Debt Justice, FEMNET, Global Alliance for Tax Justice, Public Services International, Tax Justice Network and Third World Network, among others.
