Faculty: Management Sciences
Department: Banking And Finance


Amakor I. Chinelo
Okaro S. Celestine
Ibenta N. O Steve


This research work evaluated the effect of International Monetary Fund (IMF) conditionality on Economic growth of five Sub Saharan African countries that have benefited from IMF non credit facility known a Policy Support Instrument (PSI), from 1986 to 2016. Many policy makers and researchers have questioned the rationale for the facilities for developing nations. The specific objectives were to analyse the effect of IMF conditionality on GDP of selected Sub-Saharan African Nation; to ascertain the effect of IMF Conditionality on Gross Fixed Capital Formation of selected Sub-Saharan African nation, and to evaluate the effect of IMF Conditionality on National Savings of selected Sub-Saharan African Nation. The research design adopted was ex-post facto, using regression technique. The data for the analysis were sourced from the data bank of World Bank. The data were analysed using charts and graphs. Granger causality test was used to test the effects of IMF conditionality on individual selected sub Saharan nation, while W-Stat and Zbar-Stat of Dumitrescu Hurlin panel test were used to test the general effect of IMF conditionality on all the five selected nations. The diagnostic tests of the models were carried out using co-integration, impulse response function, error correction model, Unit Root, LLC and Breitung panel and serial correlation test. The result revealed that IMF conditionality has significant negative effect on GDP, GFCF and NS of Nigeria, Tanzania, Uganda and Rwanda, but positive effect on Senegal; devaluation of local currency is the greatest IMF conditionality that exerts great negative influence on economic growth of Sub Saharan African nations; IMF conditionality seems to work better in a more democratic nations. The work recommends among others that: Sub Saharan African authorities should make efforts to move their various nations towards full democracy or at least flawed democracy before accepting IMF facilities, because IMF facilities seem to favour more democratic nations; instead of currency devaluation, protectionist policies via guided liberalization should be promoted combined with the use fiscal policy in order to encourage local production and usage of locally produced goods and services; sub Saharan African governments should consult financial experts for development of effective economic policy that will address their individual economic problems.