Modernizing tax systems crucial for development, says IMF Africa director

Abebe Aemro Selassie, head of the International Monetary Fund’s African Department. Photo by: Cliff Owen / IMF / CC BY-NC-ND

WASHINGTON — Helping governments with the technical work of modernizing their tax systems is a “crucial but often overlooked” part of what the International Monetary Fund does, and one which could have major benefits for the poor, according to Abebe Aemro Selassie, head of the IMF’s African Department.

While the institution tends to be associated with austerity policies and is seen as a lender of last resort, this is no longer the case, he told Devex.

Selassie — who is young for a director, at 51 — worked for the government of Ethiopia before joining the IMF more than 20 years ago. For him, some of the institution’s greatest impacts come from the technical assistance and training it offers governments. In 2017, this accounted for 28 percent of the IMF’s budget, worth $345 million.

“Quite a lot of what we do is the really technical stuff around strengthening institutions like revenue authorities,” he said. While some might see it as “boring,” the work is “crucial” and often gets overlooked in favor of the IMF’s lending programs and the “difficult discussions we often have around the manner of policy adjustments,” he said.

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About the author

  • Edwards sopie

    Sophie Edwards

    Sophie Edwards is a reporter for Devex based in London covering global development news including global education, water and sanitation, innovative financing, the environment along with other topics. She has previously worked for NGOs, the World Bank and spent a number of years as a journalist for a regional newspaper in the U.K. She has an MA from the Institute of Development Studies and a BA from Cambridge University.