Question Tag: World Bank

i) Comparison of functions of the IMF and the World Bank:

1. Monetary cooperation vs. Development aid:
   • The IMF’s primary function is to stabilize exchange rates and offer monetary cooperation, while the World Bank focuses on long-term economic development and reducing poverty by funding infrastructure projects in developing countries.
2. Short-term financial stability vs. Long-term development:
   • The IMF provides short-term financial support to countries facing balance of payment problems, while the World Bank supports long-term development projects aimed at reducing poverty and fostering economic growth.
3. Conditional lending vs. Project financing:
   • IMF loans are often conditional on the implementation of economic policies aimed at stabilizing a country’s economy, whereas World Bank loans are generally directed towards specific development projects such as building schools, roads, and water systems.
     (3 marks)

ii) Challenges faced by the IMF in West Africa:

1. Governance Structure and Key Policy Issues:
   • One of the challenges the IMF faces in West African countries is dealing with governance issues and the implementation of sound policy measures in economies often affected by political instability.
2. Managing capital movements and preventing crises:
   • The IMF also struggles with managing volatile capital flows and preventing financial crises in the region, where economies are highly vulnerable to external shocks, commodity price fluctuations, and global market changes.
     (2 marks)