As Global Wealth Spreads, the IMF Recedes

But critics say it also heralds the fund's diminishing importance in a world where developing nations have more lending options than ever before. That is particularly true as the Chinese and the Indians lavish Africa and other regions with billions of dollars in low- or no-interest loans, often in exchange for access to oil and minerals but carrying no demands for fiscal restraint or free-market reforms. In Latin America, Venezuela's leftist leader, Hugo Chávez, has sought to provide an alternative to the IMF, offering massive aid that has enabled some of the region's countries to pay back loans early and has made them less susceptible to fund demands.

"To be perfectly blunt, their influence is tied to their lending," said Marcus Noland, senior fellow at the Peterson Institute for International Economics in Washington. "If you're not worried about getting more cash from them, then you're going to say, 'Hey, talk all you want, IMF, but I don't have to do everything you say anymore.' "

The weakest nations in Africa remain the most subject to IMF policies because the fund represents one of their few financial lifelines. But even in better-off countries like Ghana -- a West African nation of 23 million -- the IMF still wields clout. Lenders including the World Bank and foreign-aid agencies in Europe and the United States continue to look to the fund to certify a nation as being fiscally responsible before offering grants or loans.

"The poorest countries in sub-Saharan Africa, the non-oil-producers that don't have new cash flow, are still under the thumb of the IMF," said Rick Rowden, senior policy analyst for ActionAid, an IMF watchdog and critic.

In Ghana, the IMF has been credited with helping to promote less wasteful government spending and worked with the World Bank to forgive Ghana's $381 million debt earlier this decade. It allowed Ghana to shift funds once earmarked for debt payments to social spending. Schools that had operated in the open air were moved into classrooms while new medical clinics cut infant mortality and the deaths of women at childbirth, according to the Social Enterprise Development Foundation of West Africa, a regional nongovernmental organization.

Yet other fund-backed policies have proven difficult for the population. As Ghana sought to increase water access, the IMF recommended "full cost recovery." Ghana's water company moved to install prepaid meters and disconnect nonpaying customers, according to a report from Jubilee USA, an anti-poverty nonprofit group in Washington. As a result, Ghanaian women, who traditionally bear the burden of providing water for household use, were forced in some instances to dig unsafe, shallow wells to access drinking water.

It has stung people like Maame Ama Fosuwaa, 43, a single mother of four. "Before, I used to pay less than [$30]" per month for water, said the woman, wearing a sleeveless blue dress and selling tomatoes and cassava in a lively Accra market. "But now I have been paying close to [$60]. I don't know anything about the IMF . . . but I hear on the local radio station that they are to blame for our difficulties."

Some critics here say the IMF has become too lenient, expressing only tempered concern, for instance, about the surge in the national budget deficit, now 9.1 percent of GDP. IMF officials disagree. "We still voice concerns as needed, but Ghana has come a long way," said Arnold McIntyre, the IMF's Ghana representative. "But, of course, we still have our recommendations."

These days, however, Ghana has more flexibility to accept the IMF policies it likes and reject those it doesn't.

Just north of Accra, workers are laboring in the red West African earth, assembling a massive power station financed by the government's recent bond sale. The huge transmitters are designed to add 126 megawatts of electricity to the national grid to help relieve chronic power shortages -- power that is still subsidized by the government.

The IMF has insisted that Ghana eliminate those subsides and pass the full cost of electricity production to its people. It would mean higher power bills just as residents are trying to cope with increases in gas and food prices. The government has opted for a Solomonic solution. It will begin passing the higher costs to corporate users by later this year but has provided no timetable for extending the burden to individual users.

For some here, even that is too much. "The IMF has been pushing us for years," said Leticia Osafo-Addo, chief executive of Samba Processed Foods, a maker of hot pepper sauces, juices and spices that will likely see its electricity bill soar by year's end. "We can and should manage on our own. It is time for that to stop."

Special correspondent Anny Osabutey in Accra contributed to this report.