The International Monetary Fund (IMF) should not be an arbiter of discussions about which other multilateral financial institutions should qualify for preferred creditor status. This is because the IMF is a direct beneficiary of the creditor hierarchy policy.
A preferred creditor status gives multilateral development institutions priority for the repayment of their loans should a borrower run into financial difficulties. This means preferred creditors have no non-performing loans on their balance sheets. This preserves their low-cost funding channels. Non-preferred creditors have high risk exposure and borrowing costs.
The events leading to Fitch Ratings’ downgrade in January 2026 of the African Export-Import Bank (Afreximbank) and the rating agency’s subsequent withdrawal of the bank’s ratings illustrate this IMF conflict.
