The role of International Financial Institutions in conflict, recovery, and transitions in Africa: a focus on Ethiopia and Sudan

Abstract

Successive socio-economic shocks in the past three years have undermined Africa’s development gains, impeding the economic convergence of Africa and the developed world. While these shocks originated externally, internal factors within Africa are reinforcing their impact. One such factor is conflict and instability. Nearly half of the African states are either fragile or conflict-affected. Although international organizations claim to support Africa in overcoming fragility and conflict, how they engage Africa has remained a major policy and scholarly concern. International Financial Institutions (IFIs), for instance, are being asked to help address the economic dimensions of fragility and conflict. However, there is little consensus about whether they are indeed helping. Divergent responses are often offered wherein the IFIs argue that they are assisting by adopting adaptive strategies to correct past mistakes while experimenting with new strategies based on extensive monitoring and research. Scholarly debates on these IFI narratives, and by extension the IFIs’ interests and agenda, are not yet settled. This paper approaches these debates by examining IFIs’ engagement in the recent conflict and transitions of Ethiopia and Sudan, arguing that these examples call into question the IFIs’ claims of strategic adaptiveness. The paper, along with previous studies, argues that the inner core of neo-liberal economic vision has animated the IFIs’ prescription, often complemented by a focus on social safety nets to varying degrees and with varying effects. In Sudan, the IFI offered coordinated support for economic reform with some successes in directly targeting sources of fragility and conflict. In Ethiopia, such coordinated engagement was lacking, and reform measures did not directly target the sources of conflict. The cases demonstrate the importance of continuous and coordinated engagement in fragile and conflict-affected states (FCS) of Africa in a way that acknowledges the nexus between security and development issues, especially at critical junctures. The cases also underscore the importance of adaptive and pragmatic engagements with FCS undertaken in coordination with relevant global actors and institutions.