The International Monetary Fund (IMF), despite overall progress in its anti-corruption efforts, has not ensured sufficient oversight of its Covid-19 emergency loans, Human Rights Watch and Transparency International said today. As a result, it is hard for members of the public in many countries to track the governments’ Covid-19 spending, to identify potential corruption, or to determine whether the deprivation of basic rights connected to the pandemic is being addressed.

Since March 2020, the IMF has provided about US$108 billion in financial assistance to 85 countries to support their response to the pandemic. Due to the IMF’s improved attention to combating corruption, about half of these loan agreements included specific anti-corruption measures related to Covid-19 spending and procurement. In some cases, the IMF obtained strong transparency commitments that spurred the publication of valuable information. Some governments amended procurements rules to enable publication of the names of beneficial (that is, real) owners of companies awarded contracts. This information is key to preventing conflicts of interest and tax evasion and allowing the public to track who benefits from public contracts. However, weak implementation impeded the potential of this progress.

"The IMF’s call to governments during the pandemic to ‘spend as much as you can but keep the receipts’ showed concern for corruption risks,” said Sarah Saadoun, senior business and human rights researcher at Human Rights Watch. “But this approach will only be effective in addressing rights issues if it ensures that those ‘receipts’ are publicly accessible, comprehensive, and credible.”

Robust IMF lending is critical for many governments to have sufficient resources to respond to the pandemic by providing adequate and accessible health care as well as addressing its economic impacts. It is equally critical for governments to spend these funds transparently and accountably so they reach those in need.

Human Rights Watch and Transparency International assessed the effectiveness of the IMF’s approach during the pandemic by analyzing how well four governments – Egypt, Nigeria, Cameroon, and Ecuador – carried through on the measures included in their loan agreements. Between January and March 2021, the organizations analyzed documents published by these governments, as well as loan agreements and other documents published by the IMF.

Transparency International also conducted a comprehensive review of anti-corruption measures included in emergency loan agreements prior to July 23, 2020, at which point most of the IMF’s immediate Covid-19 support had been approved. In Nigeria and Cameroon, Human Rights Watch interviewed medical staff and people who lost earnings due to the pandemic. Human Rights Watch, in March 2021, wrote to the finance ministries of each of the four governments and the IMF. Only the IMF responded, which is reflected below.

The IMF’s approach to stemming corruption for its emergency lending relies heavily on public oversight, particularly from civil society groups and the media. To facilitate oversight, the data needs to be accessible and sufficiently detailed to assess and track spending, and conditions need to be in place to ensure that concerns can be raised safely. The IMF also needs to remain actively engaged to ensure robust implementation by governments, including through future surveillance and lending programs.

To its credit, the IMF has increased engagement with civil society groups since the onset of the pandemic, including by initiating workshops and calls with IMF staff. The IMF also met with civil society groups, though typically after loans were already approved.

A View from Four Countries

An in-depth analysis of Egypt, Nigeria, Ecuador, and Cameroon found mixed results in meeting the IMF’s transparency commitments. There remained inconsistencies in the types of measures to which governments committed, their implementation, and the role of the IMF in ensuring compliance. The transparency commitments in the emergency loans spurred all four governments to produce information about their spending and contracts that they would have otherwise not published. However, the amount, accessibility, and quality of the disclosed information varied widely and was inadequate for meaningful oversight for any of the four countries.