The International Monetary Fund recently released a report listing the member countries that have been delayed in the completion of their Article IV consultations. Out of the 12 nations included in the IMF’s report, 4 were African. As of December 2023, the aforementioned delay has lasted a minimum of eighteen months.
The main objectives of the International Monetary Fund (IMF), an international financial organization founded in 1944, are to support international monetary cooperation, stabilize exchange rates, enable balanced growth in international trade, supply resources to member nations in need of financial support, and support global economic stability.
To be able to effectively take on these responsibilities a great deal of information on member states needs to be collated, and some of the IMF’s data sets are a result of the organization’s Article IV consultations.
Article IV consultations or mandatory financial stability assessments is a protocol used to study the financial complexity of any given IMF member state.
According to the IMF, “Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies.”
Basically, the Article IV consultation is conducted to provide an in-depth analysis of a country’s economic situation, identify potential vulnerabilities, and offer policy advice to promote economic stability and growth.
This consultation typically happens annually. However, 12 member states of the IMF have been denied this consultation for up to 18 months. This is due to several reasons, some of which are supposedly outside of the IMF’s influence. For example, the completion date for Venezuela’s last consultation goes as far back as 2004, and this is owing to the country’s political insecurity.
The Article IV consultation typically entails a visit from an IMF team, and if the country is hostile, said team would be unable to visit.
Source: BI
