It's time for Africa to champion a new global financial order

As Africa rises economically and geopolitically, the cracks in Western-dominated global institutions have become glaringly evident.

For decades, bodies like the World Bank, the International Monetary Fund (IMF), and the International Centre for Settlement of Investment Disputes have operated in ways that disproportionately favour wealthy Western nations, often to the detriment of developing countries.

For African nations, the time is now to lead the charge in reshaping a global system that no longer serves the interests of the many, but only the few.

Africa, with its wealth of natural resources, youthful population, and expanding economies, is poised to play a significant role in the global order. South Africa, a key member of BRICS alongside Brazil, Russia, India, and China, has long been at the forefront of efforts to overhaul global governance. For too long, institutions designed to promote global stability have favoured Western powers, undermining the economic independence of the Global South.

The failures of these institutions are stark, and they serve as a wake-up call for African nations. The time for reform has passed; it is now time for Africa to lead the creation of new systems that better reflect the needs and realities of the modern world.

The World Bank, which positions itself as a champion of development, has often been at the centre of controversy when it comes to its projects in Africa. One prime example is the Bujagali Hydroelectric Power project in Uganda, which received significant financial backing from the World Bank and was touted as a solution to Uganda’s energy shortage. However, the project quickly became a symbol of mismanagement and misappropriation of resources.

The Bujagali dam was plagued by massive cost overruns, with the final price tag ballooning to nearly $900 million, almost double the original budget. Local communities were displaced without adequate compensation, and the promised electricity benefits failed to materialise for much of the population.

Instead, electricity tariffs soared, putting further strain on Ugandans already struggling with poverty. The failure to properly oversee the project, combined with the prioritisation of private-sector profits over public benefit, turned what should have been a developmental success story into a cautionary tale of mismanagement and exploitation.

This is not an isolated incident. Across Africa, World Bank-funded projects have often left local communities worse off, while international contractors and investors reap the rewards. From failed infrastructure projects to poorly executed healthcare initiatives, the World Bank’s involvement in Africa frequently raises questions about its accountability and long-term commitment to the continent’s genuine development needs.

While the World Bank has struggled with project execution, the IMF’s involvement in Africa has largely been marked by the imposition of harsh economic policies through structural adjustment programmes (SAPs). These programmes, introduced in the 1980s and 1990s, were intended to stabilise economies by reducing government spending, liberalising markets, and privatising state-owned enterprises. In practice, they often led to economic devastation for African countries.

Take Zambia, for instance. In the 1990s, Zambia underwent a series of IMF-mandated reforms, including drastic cuts to social spending and the privatisation of its copper mines—the lifeblood of the country’s economy. While the IMF promoted these reforms as necessary steps toward fiscal discipline and economic growth, the immediate results were disastrous. Unemployment skyrocketed, public services collapsed, and poverty levels surged.

The privatisation of copper mines, in particular, allowed foreign corporations to take control of the country’s most valuable resource, while local workers faced mass layoffs and poor working conditions.

The consequences of IMF policies were felt not only in Zambia but across the continent. In countries such as Ghana, Nigeria, and Tanzania, SAPs led to similar outcomes: weakened healthcare systems, rising poverty rates, and increasing dependency on foreign aid. For African nations, these programmes often amounted to economic neocolonialism—a means for Western powers to exert control over African economies under the guise of fiscal responsibility.

Despite repeated failures, the IMF continues to impose stringent conditions on African countries in need of financial assistance, prioritising debt repayment and market liberalisation over the welfare of local populations. It is a system that leaves African nations trapped in cycles of debt and dependency, unable to chart their own economic course.

- The writer is a journalist covering Africa and global issues