This paper examines IMF loan programs to 29 countries in sub-Saharan Africa between 1999 and 2005. It finds that significant percentages of foreign aid were not spent because of IMF policies on currency reserve levels and inflation rates; about 37 percent of all annual aid increases to these countries were diverted into building currency reserves. Even among countries perceived to have sufficient currency reserves already, only about $3 of every $10 in annual aid increases was spent; the IMF diverted the rest to paying down domestic debt and/or building up currency reserves.
