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The International Monetary Fund (IMF) has come under renewed criticism following the release of a new international report that alleges the institution continues to promote austerity measures that undermine public services in developing countries while supporting increased public investment in wealthier nations.
The report, Still Cooking with a Failed Recipe: A Review of IMF Country Advice on Social Spending, Public Services, Debt, Tax and Gender Equality, was released on Tuesday by ActionAid International, Education International, the Tax and Education Alliance and a coalition of civil society organisations.
The study argues that despite public commitments to reform, the IMF continues to impose policies that force low-income countries to cut spending on healthcare, education and social protection in order to meet debt repayment obligations.
Researchers examined 29 IMF policy documents and programme reviews covering 11 countries — including Nigeria, Ghana, Kenya, Malawi, Senegal, Uganda, Zambia, Zimbabwe, Brazil, Nepal and the United Kingdom — between February 2022 and February 2025.
According to the report, African countries spend an average of 7.6 per cent of their national budgets on public sector wages, below the global average of 9 per cent. However, many are still encouraged by the IMF to freeze or reduce wage spending, even in critical sectors such as health and education.
The report highlights what it describes as a significant disparity in the IMF's treatment of countries. While the United Kingdom, which spends 15.9 per cent of its Gross Domestic Product (GDP) on public sector workers, is encouraged to increase public expenditure, countries such as Nigeria and Nepal, with much lower spending levels of 1.9 per cent and 2.5 per cent respectively, are advised to maintain fiscal restraint.
ActionAid International Secretary General, Arthur Larok, said the findings demonstrate that the IMF continues to prioritize the interests of creditors over the needs of citizens in developing countries.
"The IMF's recipe book is completely outdated. Lower-income countries are being told to cut public spending, reduce the number of frontline workers and channel scarce resources toward debt repayments instead of investing in healthcare, education and social welfare," Larok said.
He argued that such policies have weakened governments' ability to provide essential services and respond to development challenges.
The report also examined IMF engagements in several African countries and found that recommendations aimed at maintaining fiscal discipline often translated into restrictions on public spending, despite rising demand for social services.
Roos Saalbrink, Global Lead on Economic Justice at ActionAid International, criticized the institution's continued support for public sector wage constraints.
"Teachers, nurses and doctors are not a burden on public finances; they are the backbone of public services. Yet the IMF continues to recommend wage bill restrictions in countries where public spending is already extremely low," she said.
The report further raises concerns over the growing debt burden facing many developing economies. It notes that nearly three-quarters of lower-income countries now spend more on debt servicing than on healthcare, a trend the authors say is worsening poverty and limiting economic recovery.
Despite these challenges, the report argues that the IMF has failed to support large-scale debt cancellation initiatives and instead continues to advocate measures designed to ensure repayment to international creditors.
Another major criticism focuses on taxation policies promoted by the Fund. The report claims that IMF-backed reforms frequently rely on indirect taxes such as Value Added Tax (VAT), which disproportionately affect poor households.
Jennifer Lipenga, Tax and Gender Equality Policy Advisor at the Tax and Education Alliance, said such measures often place additional burdens on women and marginalized communities.
"Evidence consistently shows that regressive taxes such as VAT have greater impacts on lower-income households, particularly women. Yet IMF tax recommendations rarely incorporate gender assessments or reflect international commitments on gender equality," she said.
The coalition behind the report is calling for a fundamental rethink of the global financial architecture, arguing that the IMF has failed to adapt to modern development realities.
Among its recommendations are stronger support for international debt relief mechanisms, increased investment in public services, and greater reliance on emerging United Nations-led initiatives on tax cooperation and sovereign debt management.
The report concludes that meaningful reform of the IMF has not materialized and urges governments in the Global South to pursue alternative multilateral frameworks that place development, social justice and economic equality at the centre of global economic governance.