The Effects of IMF's Lending and Conditionalities on Economic Growth: Case of SADC Countries

Abstract

I examine the impact of IMF credit use and its conditions on economic growth performance in 12 South African countries over a period of 1999-2019. The work adopts an empirical and quantitative approach to analyzing the relationship between the GDP per Capita, the use of IMF Credit, Government Final Consumption Expenditure, Net Domestic Credit and Current Account balance. These variables are the most recommended in the IMF conditionalities during the lending arrangements with SADC members. The study uses Fixed-effect approach to evaluate how the use of IMF program and the conditions imposed directly affects economic growth. A dummy variable is included to evaluate GDP growth if a country met or not the imposed condition. The result from the analyses concludes that overall, the use of IMF credit has no statistical significance on the economic growth. But when some conditions are met, the GDP responds positively. Other variables current account, government expenditure, and net domestic shows significant and positive change on the GDP growth of SADC countries.

Date of Award	2021
Original language	American English
Awarding Institution	Eastern Illinois University
Supervisor	Ahmed Abou-Zaid (Supervisor)