The IMF’s Spring Meetings Must Deliver Three Reforms |
NAIROBI—In March, Kenya made a strategic push for economic self-determination when the Treasury announced that it did not need funding from the International Monetary Fund for the remainder of the fiscal year, which ends in June. Instead, the Kenyan government mobilized 588 billion shillings ($4.5 billion) through the Kenya Pipeline Company’s initial public offering, a stake sale in Safaricom, and the issuance of new Eurobonds. That is roughly five times what the IMF would have offered in a single year. As Treasury Cabinet Secretary John Mbadi put it, Kenya does not need “rescuing.”
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By leveraging its assets and accessing international capital markets on its own terms, Kenya has asserted precisely the kind of fiscal sovereignty that the multilateral system was designed to strengthen, not supplant. Still, structural tensions remain: IMF staff arrived in Nairobi in February, and talks will resume at this month’s World Bank/IMF Spring Meetings. But as Kenya’s Controller of Budget Margaret Nyakang’o warned, overreliance on IMF financing risks ceding policy space to the institution. “We should not just be puppets,” she said.
Kenya’s fears are not unfounded. In fact, the multilateral financial architecture’s defining feature is that one party sets the terms, and the other lives with the consequences.
As the United Nations Independent Expert on foreign debt, other international financial obligations, and human rights, I have spent nearly five years documenting this asymmetry, which is too consistent to ignore. My mandate work on Argentina showed how successive IMF programs—designed without meaningful input from the affected population—deepened a debt trap that is now the Fund’s single largest exposure. The country’s latest $20 billion standby program was approved by executive decree, bypassing its legislature.
My communication to the United Kingdom on its colonial-era tax treaty with Sierra Leone highlighted how bilateral agreements negotiated decades ago continue to drain fiscal capacity from countries that were never in a position to set the terms. Likewise, my letters to European governments—including France, Germany, and the UK—on their simultaneous cuts to official development assistance noted that the populations bearing these costs had no seat at the table when the decisions were made.
These are not isolated failures. They are symptoms of a governance structure in which the most vulnerable lack a voice. Nowhere is this more evident than in the IMF’s quota system. Quotas determine how much a country can borrow, its share of Special Drawing Rights (the IMF’s reserve asset), and, crucially, how much its vote counts. The 16th General Review of Quotas, completed in late 2023, pumped 50% more resources into the Fund but did not change any voting shares. The 17th Review passed without conclusion. The work has been quietly pushed until 2028. This month’s Spring Meetings are the first major moment of accountability since those deadlines slipped.
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Failure to achieve meaningful realignment would be a choice, not an oversight. The current quota formula relies on variables—such as GDP measured at market exchange rates and trade openness—that are structurally biased toward advanced economies. But the deeper question is what can be repaid, and at what human cost, which is a principle that the people who carry sovereign debt understand in ways that distant creditors do not.
Small tweaks will be insufficient. A new formula is necessary. IMF member states should be bolder in demanding genuine structural change. Representation in multilateral governance must be anchored in people. The simplest version is the “one country, one vote” model that governs the UN General Assembly. Even better would be to weight votes by population, thereby aligning representation with the principle of universal adult suffrage that underpins legitimate governance.
The idea is not utopian. At a time when major powers apply martial rhetoric to trade, seize territories, and depose leaders, it has become clearer than ever that those countries with the requisite economic and military heft invoke the rules-based order selectively. Against this backdrop, the absurdity of a quota system that grants the wealthiest economies near-permanent control of an institution that professes to serve all its members is obvious.
This underscores the need for three reforms. The first is a new quota formula that provides greater voting power to emerging and developing economies. Second, affected populations must be able to shape the structure of IMF programs, not merely be consulted after the terms are set. Lastly, there must be a shift from compliance-based to legitimacy-based fiscal governance. When program conditions fail to account for a country’s constitutional framework and political context, the problem is design, not compliance. A country’s fiscal framework must be treated as an expression of the compact between a government and its citizens, not as a technocratic checklist.
Kenya’s decision to stand on its own feet is not a rejection of multilateralism. It shows what multilateralism should look like: a system in which countries participate as sovereign partners, not dependents. Although it may seem like a procedural exercise, the 17th General Review of Quotas is a test of whether the system can still reform itself. Failure to achieve lasting reform by the extended deadline of 2028 would tell the world everything it needs to know about whose interests the architecture will continue to serve.