Why the IMF Is Failing Countries Like Kenya

In late June, Kenyans took to the streets to protest tax increases embedded in a government finance bill. The demonstrations were loud and visible, but they pointed to something deeper: a crisis of confidence in the International Monetary Fund itself. The IMF has become, in the eyes of many Africans, the architect of their suffering rather than their savior.

The numbers tell part of the story. Twenty-one African nations currently receive IMF assistance. Across the continent, the average country spends more servicing its external debt than it allocates to healthcare, education, climate action, and social services combined. When the IMF extends a lifeline, it comes with conditions—austerity measures that force governments to cut spending precisely where citizens need it most. Kenya is not alone in this bind, but the recent protests there have made the contradiction impossible to ignore.

The root of the problem lies in a fundamental mismatch between what the IMF was designed to do and what it is now asked to do. When the institution was created eighty years ago, it was given resources equivalent to roughly three percent of global GDP. Its job was straightforward: help forty-four countries manage currency and balance-of-payments crises. Today, the IMF must serve one hundred ninety-one member states while addressing not only traditional monetary and fiscal problems but also climate change, gender inequality, governance failures, and widening disparities in wealth. Yet its member states have provided it with resources equal to only about one percent of global GDP. The organization has been asked to do three times as much with one-third of the resources.

This starvation of resources produces two corrosive effects. First, it forces the IMF to remain a purveyor of austerity. When an institution lacks sufficient capital to truly support a country's needs, it must demand deeper spending cuts than would otherwise be necessary. The country bears the full weight of adjustment. Second, the resource shortage weakens the IMF's negotiating power in sovereign debt crises—the very moment when its leverage matters most. In the early 1980s, when Mexico announced it could not service its debt, the IMF had enough resources to cover roughly one-third of the country's financing gap and could pressure other creditors to fill the remainder. The organization brokered agreements within months. Today, when Zambia faces a debt crisis, the IMF can cover less than ten percent of its financing needs. Four years after Zambia stopped making payments, it still has not reached restructuring agreements with all its creditors. The IMF's weakened hand means weaker outcomes for struggling countries.

Kenya and other African nations have concluded that an overly powerful IMF is their problem. The diagnosis is understandable but incomplete. The real issue is the opposite: the IMF has become too weak to do what it claims it wants to do. It lacks the resources to balance debt obligations against the welfare of ordinary citizens. It cannot negotiate effectively on behalf of countries in crisis. And it has no independent accountability mechanism to identify when its policies are causing harm.

Addressing this requires action on two fronts. Wealthy nations must provide the IMF with adequate funding—enough to restore its capacity to support member states without imposing crushing austerity. But funding alone is insufficient. The IMF must also establish transparent policies explaining how it will incorporate climate, gender, and inequality concerns into its operations. It must clarify whom it will consult, how external actors can collaborate with it, and what process it will follow in designing and executing its programs. Most critically, the IMF needs an independent external accountability mechanism—an ombudsman office—to receive complaints and identify problems before they metastasize. The IMF is the only major multilateral financial institution without such a mechanism. Without it, the organization operates blind to the real-world consequences of its decisions on the communities it is meant to help.