<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="546" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Senegalese-women-cast-their-ballots-in-the-presidential-elections-in-February.-EPA-EFENic-Bothma-820x546.jpg" alt="" class="wp-image-472513" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Senegalese-women-cast-their-ballots-in-the-presidential-elections-in-February.-EPA-EFENic-Bothma-820x546.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Senegalese-women-cast-their-ballots-in-the-presidential-elections-in-February.-EPA-EFENic-Bothma-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Senegalese-women-cast-their-ballots-in-the-presidential-elections-in-February.-EPA-EFENic-Bothma-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Senegalese-women-cast-their-ballots-in-the-presidential-elections-in-February.-EPA-EFENic-Bothma-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Senegalese-women-cast-their-ballots-in-the-presidential-elections-in-February.-EPA-EFENic-Bothma.jpg 926w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



The term ‘democratic backsliding’ Is much in vogue.&nbsp; But it is misleading, and for Africa, wrong.



We all know to what it refers: the recent flurry of coups in Africa, the unconstitutional changes of government, the growing number of 100% predictable election results, the ‘legislative manipulation’ or legal manoeuvres to limit the number of candidates or restrict the number of voters to increase the chances of an incumbent (or their party) winning again, the constraints on journalists, media and free speech to obstruct or limit opposing views … These are real and worrying developments.



But the phrase also carries assumptions about what democracy is, how it should behave and what form it should take, that may not be either appropriate or useful.&nbsp; &nbsp;&nbsp;



It is possible to see what is happening in an alternative light: that democracy in Africa is evolving, just in a different direction to that presumed by many outside observers.&nbsp; The debate over the best form(s) of governance in Africa is real and live: one frontline lies between the Alliance of Sahelian States (AES) and the remaining members of ECOWAS. But it also encompasses the long-running dispute over the viability of the relatively authoritarian ‘developmental state,’ with Rwanda and (once upon a time) Ethiopia seen as the models.&nbsp;



It is no coincidence the Sahel juntas have apparently been sending missions to Rwanda to learn how to do it, though they should remember that this model can all too easily slide towards civil war: the attempt to repress differences can lead simply to a more violent expression of them.



This debate matters not just for Africa, but globally.&nbsp;China and Russia are explicitly challenging the ideological hegemony of western-style democracy, along with its supporting infrastructure of human rights, multilateral organisations and the international rule of law, as the best model for achieving peace and prosperity.&nbsp; At the least, they argue, other countries should be free to decide whether these norms are right for them.&nbsp;



In 2023, Xi Jinping&nbsp;<a href="http://ws.china-embassy.gov.cn/eng/xwdt/202305/t20230522_11081047.htm">launched</a>&nbsp;China’s ‘Global Civilisations Initiative, its ‘Global Development Initiative’ and a ‘Global Security Initiative’.&nbsp; Like the old Belt and Road Initiative, these are designed to re-orient the world towards China, in this case ideologically rather than physically.&nbsp; While their substance remains vague, the initiatives provide an alternative to the ‘western’ norms embodied in the UN, its multilateral institutions and the multiple charters and agreements promulgated under its auspices.



They are an integral part of efforts to re-frame the debate from one of ‘democrats vs. authoritarians’, to ‘the Global South and its reliable friends in the Global East vs. the neo-colonialist exploitative West’.&nbsp; The latter narrative is gaining traction in Africa, boosted by the Gaza crisis, where western countries are seen (hypocritically) as quick to condemned Hamas but slow to criticise the huge death toll Israel has inflicted on Palestinian civilians.&nbsp;



Recent polling by&nbsp;<a href="https://www.afrobarometer.org/articles/declining-satisfaction-threatens-african-democracy-afrobarometer-ceo-reveals/">Afrobarometer</a>&nbsp;suggests that an average of 66% of Africans want to live in a democracy, but not necessarily the one they’ve got. &nbsp;Only 38% are satisfied with the way their democracies operate, while 53% are now willing to contemplate military intervention if elected leaders fail in their duties.&nbsp;



This reflects the ease with which electoral democracy has been manipulated, making people feel increasingly disenfranchised. &nbsp;In Senegal we have just seen popular protest, international pressure and robust judicial institutions stop one attempt to prolong a presidential term – and ultimately lead to the dramatic defeat of the government, despite the fact that the election was anything but free and fair.&nbsp;



Elsewhere, however, as in Guinea or Gabon, military intervention may be the only way to change the regime. The question is not whether a country has the trappings of democracy, but whether the system works, enabling people to change a ruler when they want to.



The key criteria for a system of governance that people will trust are whether they provide adequate accountability, balance, and a mechanism for peaceful succession.&nbsp; A fully functioning, robust democracy can provide all these things, but even the oldes (like the UK or US) can find it difficult.&nbsp; Many other countries, not just in Africa, are still searching for their own formula to meet these criteria.



Balance, for example, requires that powerful groups, peripheral regions or minorities feel their views or interests are adequately represented in governance structures.&nbsp; Elections alone rarely provide this.&nbsp; Accountability and trust will be lacking where too many people feel that the formal mechanisms benefit only an elite who decide when it is ‘their turn to eat.’



In the Sahel, five countries now have de facto military governments, but Mauritania and Chad have been more successful at maintaining an adequate balance as well as a modicum of democratic forms.&nbsp; They have also remained closer to ‘the West’ while the three juntas have explicitly realigned themselves with Russia.&nbsp; Is it therefore their international allegiance rather than their governance structures that matter in how they are viewed?



I would argue it is more than that.&nbsp; Whatever their original motivation for seizing power, and their use of anti-French rhetoric to legitimise their rule, the juntas in Mali, Burkina Faso and Niger seem determined to resist any external accountability to ECOWAS or AU norms of governance, and reject the notion that civilian rule should be re-established within a time-limit.&nbsp; Hence their apparent determination to leave ECOWAS despite the economic hardship it would inflict on their people – unless of course they can change the balance of power&nbsp;within&nbsp;ECOWAS to support new, more flexible norms. &nbsp;&nbsp;



So democracies along the coast have good reason to be wary of the juntas’ intentions.&nbsp; To protect themselves, they – and their rulers – need to be more scrupulous in respecting the current norms, and reflecting their citizens views in government so that citizens have a greater sense of ownership and will resist efforts to overthrow it.&nbsp; This is the best defence of democracy and in effect what we have seen in Senegal. But governments in Nigeria, Cote d’Ivoire, Sierra Leone and Togo need to take urgent note.



My conclusion is that the current crisis of governance in Africa may just as likely lead to a renewal of democracy as a further slide into authoritarianism.&nbsp; It is the less accountable systems – in Cameroon, Equatorial Guinea, Togo – that are most at risk.&nbsp; Nevertheless, Africa’s own norms, embodied in the AU&nbsp;<a href="https://au.int/en/treaties/african-charter-democracy-elections-and-governance">Charter on Democracy, Elections and Governance</a>, are under threat as authoritarian governments can now find willing international supporters to back them up.&nbsp;



The fate of democracy in Africa is in the hands of African people themselves.&nbsp; But those trying to strengthen deserve it deserve all the support we can give.



Nick Westcott is Professor of Practice in Diplomacy at SOAS University of London and former Director of the Royal African Society.

Senegalese-women-cast-their-ballots-in-the-presidential-elections-in-February.-EPA-EFENic-Bothma

As the opposition wins in Senegal, is democracy in Africa really “backsliding”?

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Glynn-Cohen-ZimBorders-820x547.jpg" alt="" class="wp-image-470512" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Glynn-Cohen-ZimBorders-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Glynn-Cohen-ZimBorders-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Glynn-Cohen-ZimBorders-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Glynn-Cohen-ZimBorders-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Glynn-Cohen-ZimBorders.jpg 1280w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Glynn Cohen, Chairman, Founder &amp; Entrepreneur and Builder of African Borders</figcaption></figure>



As a former transporter who owned and managed what became one of the largest Johannesburg Stock Exchange listed leading transport companies in Southern Africa, running 10,000 trucks, I learned firsthand about the crippling impact of poor infrastructure on the transport industry and broader economies. Our cross-border’s operation’s largest costs were the cost of being delayed at borders which has motivated us to look at solutions. In my view, transport and logistics are the backbone supporting trade, goods movement and economic growth. This drove my decision to partner with African governments to build and rehabilitate key transport infrastructure projects.&nbsp;



My team at Safaga International Management, its affiliates and partners originated a vision by pioneering the new, modernised Beitbridge border post. I was the founder, sponsor and still serve as the chairman of ZimBorders. I am also the Chairman of La Frontiere Group (LFG), Safaga, Chirundu and Forbes Border Consortiums, and other border infrastructure development companies whose vision is to have an end-to-end solution to advance the North South Corridor principle.



This flagship project will undoubtedly be successful &#8211; improving efficiency, reducing congestion and transit fraud and we project it will generate a 300% increase in government tax revenues by lowering transporter costs and turnaround times, and facilitate safer and faster border crossings for travelers. Already, it now takes a few hours for trucks to cross the border compared with up to a week before.



Overall, Beitbridge represents a milestone for regional trade and cooperation as well as being a flagship project for Zimbabwe and the sub-region as an example of what is possible in spite of severe challenges.



The Beitbridge project showcases what investment in border infrastructure development can achieve, including housing and social infrastructure which uplifted the whole community. With the injection of some $300m investment for the Beitbridge Border Post Upgrade and Modernisation Project, the border town&#8217;s economy has grown significantly, creating new jobs and raising living standards. We think similar pacts on other border towns are likely with sufficient and well managed investments.



In my view, Africa is ripe for investment and public-private partnerships, leveraging support from institutions like the African Export-Import Bank, Africa50, the African Development Bank and local and international commercial banks.



Experienced private sector players like Safaga have track records of working with multilateral agencies, African governments and technical experts to build worldclass borders supporting the continent&#8217;s growth. Investing in borders will facilitate intra-African trade, moving the goals of the African Continental Free Trade Area and single market closer. Upgraded border posts will drive cross-border commerce, opening markets, encouraging competition and diversity, enabling cultural exchanges and boosting sectors like tourism, agriculture and mining.&nbsp;



The African Union&#8217;s 2020 Integrated Border Governance Strategy recognises borders can promote stability, peace, security and integration. Border regions can become catalysts for socioeconomic advancement if effective cooperation and development is prioritised. This is even more important given the role Africa and its resources are expected to play in the fight against climate change, where key new-age minerals such as lithium, graphite, and rare earths are essential components of green technologies such as batteries, electric vehicle motors and wind turbines.



Resources such as copper and cobalt are also essential for these pursuits and for the expansion of cities and towns around the world. &nbsp;With Africa abundantly blessed with these resources, we expect there will be a boom in demand for these resources, which will put increased strain on transport routes and border posts in coming years.



As a native of Africa born in Zimbabwe, Africa has given me the privilege of being in a position to make a positive lasting impact. Our border infrastructure work aims to pay that back. I reflect often on my early days as a young businessman entering into the transport sector with little or no knowledge yet through perseverance and seizing chances, I have contributed in a small way towards enabling trade, transport and construction across Africa.&nbsp;



My teams and I are focused on infrastructure partnerships with governments and other stakeholders. Roads, bridges and border posts might not seem commercially alluring ventures, but without connectivity allowing goods and people to transport, no economy can trade or socially integrate. Having been a transporter dependent on roads and crossings myself, I knew investing in infrastructure could transform African promise into reality. I believe that our Beitbridge Border Post is just that.



Beitbridge was our pilot project, demonstrating private sector participation with public agencies that could reimagine borders. Once an impeded outpost with endless queues, new technologies and modern customs facilities have meant trade flows improved exponentially even before construction was finished. The two governments have seen improved revenues while transporters and travellers have gained from improved services. That is the essence of what Public Private Partnership means.



My journey to pioneering border infrastructure developer taught me that Africa&#8217;s greatest asset is its human capital. Given the roads and bridges to transport goods, opportunities and ideas, Africans will thrive. Our shared destiny as neighbours means helping each other rise. If borders and transport infrastructure can enable African talent to fulfill its dreams, then my vision and work&#8217;s core purpose is fulfilled.

Glynn-Cohen-ZimBorders

Investing in Africa’s Infrastructure and Borders, a Catalyst for Long-Lasting Transformative Economic Impact

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2041454414-820x547.jpg" alt="" class="wp-image-470509" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2041454414-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2041454414-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2041454414-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2041454414-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2041454414-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2041454414-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Finance chiefs from the Group of 20 advanced and emerging economies meet in Sao Paulo, Brazil, on Feb. 29, 2024. (Photo by Kyodo News via Getty Images)</figcaption></figure>



G20 leaders must show political will to support the G20 Presidency’s global plan to tackle hunger and poverty, say world’s pre-eminent experts on food security.



March 26, 2024, WASHINGTON, D.C. – G20 leaders have been urged to commit to Brazil’s agenda for ending global hunger and poverty by some of the world’s most distinguished food security experts amid rising levels of hunger and climate vulnerability.



As the UN warns of imminent famine and extreme hunger in Gaza, Haiti and Sudan, 27 World Food Prize Laureates made the plea for the G20 to agree to a new global plan to tackle the food crisis in an open letter.



Brazilian President Luiz Inácio Lula da Silva, who won the World Food Prize in 2011, immediately made hunger and poverty key priorities when the country assumed the G20 presidency in December. His recently launched Global Alliance Against Hunger and Poverty taskforce met for the second time in Brasília last week.



Among the World Food Prize Laureates to sign the urgent call to the G20 were&nbsp;Sir David Nabarro, co-lead of the UN’s Global Crisis Response Group,&nbsp;Professor Gebisa Ejeta, who recently received the National Medal of Science at the White House and NASA climate scientist&nbsp;Dr. Cynthia Rosenzweig.



In a letter to leaders of the world’s most important economies, the signatories welcomed President Lula’s “focus on addressing hunger and poverty in the G20 Presidency” and paid tribute to the achievements of&nbsp;his first administration, which saw poverty&nbsp;<a href="https://www.worldbank.org/en/country/brazil/overview" target="_blank" rel="noreferrer noopener">reduced by half</a>&nbsp;thanks to social welfare reforms, anti-hunger&nbsp;programs and economic growth.



However, the signatories warned that “in the 21st century, it is primarily the lack of political will and leadership that allow hunger and malnutrition to persist and to rise.”



“We urge all leaders to follow his example and champion bold action to tackle the global food crisis and put us on a path to achieving Sustainable Development Goal (SDG) 2, our shared global goal to end hunger in all its forms,” the Laureates said.



“This is urgent. Right now, 735 million people are hungry. A quarter of a billion people face acute food insecurity, with women and children disproportionately affected.”



The Laureates called for a plan that includes measures to:



<ul class="wp-block-list">
<li>Save lives by fully funding the UN’s humanitarian appeals for food and nutrition assistance.</li>



<li>Build resilience by investing in smallholder farmers and those on the frontline of the food crisis.</li>



<li>Secure the future through reform of the multilateral financial system, including fixing the unsustainable debt of low-income countries.</li>



<li>Enhancing cooperation across UN agencies, development banks and financial institutions, donors, civil society and farmer organizations.</li>
</ul>



The letter was released to coincide with the 110th birthday of Dr. Norman Borlaug, whose pioneering work to breed improved crops helped avert famine in the mid-20th century.&nbsp;The call to action is also supported by&nbsp;the Hungry for Action campaign, bringing together civil society organizations and campaigners to raise the&nbsp;global food crisis to the top of the agenda and to secure the action needed to break the cycle of crises.



“In our work, we are inspired every day by examples of individuals, communities and organizations leading the charge against hunger and malnutrition, helped by innovation and technology,” the letter said.



“As World Food Prize Laureates who have dedicated decades of our careers to ending hunger, we ask the leaders of the G20 to help secure an updated global plan, backed by evidence and sustained investment, to get the world back on track toward the end of hunger.”



The Global Alliance Against Hunger and Poverty taskforce is due to meet next in May ahead of a ministerial meeting in Rio de Janeiro in July.



The full list of signatories follows below:



<ol class="wp-block-list">
<li>Akinwumi A. Adesina | President, African Development Bank; 2017 Laureate</li>



<li>Maria Andrade | Principal Scientist, International Potato Center; 2016 Laureate</li>



<li>David Beckmann | President Emeritus, Bread for the World; 2010 Laureate</li>



<li>Howarth Bouis | Emeritus Fellow, International Food Policy Research Institute; 2016 Laureate</li>



<li>Mary-Dell Chilton | Distinguished Science Fellow, Syngenta; 2023 National Medal of Technology &amp; Innovation Recipient; 2013 Laureate</li>



<li>Gebisa Ejeta | Director, Purdue Center for Global Food Security; 2009 Laureate</li>



<li>Robert T. Fraley | Former Executive VP &amp; CTO, Monsanto; 2013 Laureate</li>



<li>Simon N. Groot | Founder/Honorary Chairman, East-West Seed Group; 2019 Laureate</li>



<li>Modadugu V. Gupta | Senior Research Fellow, WorldFish; 2005 Laureate</li>



<li>Lawrence Haddad | Executive Director, Global Alliance for Improved Nutrition; 2018 Laureate</li>



<li>Hans R. Herren | President, Millennium Institute &amp; Biovision Foundation; 1995 Laureate</li>



<li>Gurdev S. Khush | Professor Emeritus, University of California, Davis; 1996 Laureate</li>



<li>John Agyekum Kufuor | President of Ghana 2001-2009; 2011 Laureate</li>



<li>Heidi Kühn | Founder and CEO, Roots of Peace; 2023 Laureate</li>



<li>Rattan Lal | Director, CFAES Rattan Lal Center for Carbon Management and Sequestration; 2020 Laureate</li>



<li>Jan W. Low | Managing Director, JWLOW Limited; 2016 Laureate</li>



<li>Jo Luck | Former President, Heifer International; 2010 Laureate</li>



<li>Robert Mwanga | Former Sweet Potato Breeder, International Potato Center; 2016 Laureate</li>



<li>David Nabarro | Co-lead, UN Global Crisis Response Group; 2018 Laureate</li>



<li>Philip E. Nelson | Professor Emeritus, Purdue University; 2007 Laureate</li>



<li>Per Pinstrup-Andersen | Professor Emeritus, Cornell University; 2001 Laureate</li>



<li>Cynthia Rosenzweig | Senior Research Scientist, NASA Goddard Institute for Space Studies; 2022 Laureate</li>



<li>Pedro Sanchez | Professor, Tropical Soils, University of Florida; 2002 Laureate</li>



<li>Shakuntala Haraksingh Thilsted | Global Lead for Nutrition and Public Health, WorldFish; 2021 Laureate</li>



<li>Marc Van Montagu | Chairman, VIB &#8211; International Plant Biotechnology Outreach, Belgium; 2013 Laureate</li>



<li>Surinder Vasal | Former Maize Breeder, CIMMYT; 2000 Laureate</li>



<li>Muhammad Yunus | Founder, Grameen Bank; Chairman, Yunus Centre; 1994 Laureate</li>
</ol>

G20 finance chiefs meeting in Brazil

World Food Prize Laureates Urge G20 To Back Brazil’s Effort To End Global Hunger As Famine Warnings Rise

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="546" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/cf2b1dfc-f8bf-91e3-f686-0a2d107f4a0c-820x546.jpg" alt="" class="wp-image-470452" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/cf2b1dfc-f8bf-91e3-f686-0a2d107f4a0c-820x546.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/cf2b1dfc-f8bf-91e3-f686-0a2d107f4a0c-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/cf2b1dfc-f8bf-91e3-f686-0a2d107f4a0c-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/cf2b1dfc-f8bf-91e3-f686-0a2d107f4a0c-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/cf2b1dfc-f8bf-91e3-f686-0a2d107f4a0c-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/cf2b1dfc-f8bf-91e3-f686-0a2d107f4a0c-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Dondo Mogajane, CEO of Moti Group</figcaption></figure>



From navigating complex regulatory landscapes to addressing stakeholder demands for greater transparency, and holding organisations to account for diversity and sustainability, the role of board members has never been more crucial. The benefits of effective governance that board members can bring to the table is truly transformative, both in terms of strengthening strategic planning and risk management, but even in accelerating growth through attracting investments. Likewise, individual board members can make invaluable contributions to organisations of all sizes and across all sectors. They can lend their experience and expertise in key areas such as finance, strategy, and organisational culture, and emphasise fundamental environmental, social, and governance concerns (ESG) throughout company operations. By doing so, board members can play a guiding role in enhancing triple bottom lines and developing the market leaders of tomorrow. In fact, a 2023 survey of nearly 600 company directors conducted by KPMG highlighted the significant value that independent or non-executive directors (NEDs) bring to businesses. The respondents emphasised that NEDs perform a vital role in businesses by serving as objective and trusted advisors to CEOs and executives, providing strategic guidance, and advocating for balanced decision-making among managers and owners.&nbsp; In South Africa, where corporate governance standards are closely scrutinised, boards have a number of critical, mandatory statutory and fiduciary duties. These extend beyond ensuring sound financial management to monitoring organisational activities and outputs in areas such as environmental stewardship, community development, and corporate conduct.&nbsp; In fulfilling their duties, board members must successfully pilot complex governance frameworks, uphold ethical standards, and drive organisational performance while balancing the interests of various stakeholders. So, why should professionals aspire to serve on boards? There are numerous reasons, but here follows four of the most important:



<ol class="wp-block-list">
<li>Leaving a legacy: Board membership offers a unique opportunity to shape organisational outcomes and drive positive change in society. Whether its through championing sustainability initiatives and promoting diversity and inclusion, or influencing strategic decision-making to grow organisations for the benefit of economies and jobs, board members wield considerable influence in shaping the future trajectories of organisations.</li>



<li>Building an elite network: Serving on a board exposes individuals to a diverse range of well-connected and often influential experts and industry leaders from a variety of backgrounds and skillsets. These connections can lead to new opportunities for collaboration and partnerships, expanding one’s professional horizons in sometimes surprising ways.</li>



<li>Professional development:&nbsp;Board service offers an important platform for executives to hone critical skills such as analysing reports, active listening, strategic thinking, effective communication, and sound decision-making, which are all vital in senior leadership roles. Likewise, through exposure to high-level discussions and building relationships with other seasoned professionals, board members are exposed to a wealth of knowledge and insights, fostering continuous learning and an appreciation for different perspectives.</li>



<li>Strengthening your professional reputation:&nbsp;Board membership is a high-impact role that enhances professional credibility and visibility, signalling leadership competence and a commitment to governance excellence. It strengthens the board member’s reputation and marketability as a business influencer in their own right.</li>
</ol>



In conclusion, board membership offers a unique pathway to professional growth, personal fulfilment, and organisational impact. By embracing this responsibility, board members can contribute to a more equitable, sustainable, and resilient future for businesses and communities globally. Aspiring leaders should therefore seize the opportunity to develop their boardroom capital and become catalysts for positive change in the organisations where they serve.

cf2b1dfc-f8bf-91e3-f686-0a2d107f4a0c

Choosing to serve at boardroom frontiers

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="539" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Businesswoman-Copyright-Shutterstock-820x539.jpg" alt="" class="wp-image-470434" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Businesswoman-Copyright-Shutterstock-820x539.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Businesswoman-Copyright-Shutterstock-300x197.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Businesswoman-Copyright-Shutterstock-137x90.jpg 137w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Businesswoman-Copyright-Shutterstock-768x505.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Businesswoman-Copyright-Shutterstock-1536x1010.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Businesswoman-Copyright-Shutterstock-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



As we celebrate Women’s History Month, it is worth asking how we can best support and accelerate gender equality and access to opportunity in Africa’s private sector.



First, make no mistake: gender inequality remains a serious global issue, persistent in even the world’s richest and most developed countries. But women in Africa face a unique set of challenges that are holding them back and limiting their progress—and, in turn, delaying the progress of the whole continent.



African women entrepreneurs routinely lament the lack of access to networks, to markets and to finance. The latter, access to finance, also affects men, of course, yet women’s share of Africa’s funding pool is much smaller. Several sources estimate the financing gap for Africa’s women entrepreneurs at about $40 billion, roughly twice the size of Mozambique’s annual GDP.



Women leading African start-ups also face formidable financing barriers—and are largely crowded out by men. Only 7 percent of ventures raising more than $10 million in Africa in 2023 were led by women, according to <a href="https://www.linkedin.com/company/africa-the-big-deal/">Africa: The Big Deal</a>, a database and newsletter providing insights into start-up funding in Africa. The same source notes that start-ups with a solo female founder, or an all-female founding team, raised a mere 2.3 percent of all the funding in Africa last year.



But there is better news too. Many governments across sub-Saharan Africa are helping level this historically tilted playing field by enacting policies that support gender equality—and eliminating policy challenges.&nbsp;



According to the World Bank Group’s <a href="https://openknowledge.worldbank.org/server/api/core/bitstreams/d891abb1-ca9c-42cd-989f-32d3885189a2/content">Women, Business and the Law</a>reports, several African countries have recently implemented the bulk of global, gender-related legal reforms, including those focused on increasing paid leave for parents, removing restrictions on women’s work, and mandating equal pay.



This is progress. However, the same reports note that equality of economic opportunity for women remains the lowest globally in North Africa. In many countries in Africa, women still need a man’s signature to obtain a bank loan, for example.



But what about digital technology? A game changer? Maybe. Digital tech is certainly broadening financial inclusion and access to financial services. However, because men are more likely than women to own a smart phone or be connected to the Internet in Africa, there exists a stubborn ‘digital divide’, according to a <a href="https://www.itu.int/hub/2020/10/equals-and-power-join-forces-to-close-the-digital-gender-divide-by-2030/">UN report</a>, among other research.



There’s more. Women in Africa also face heightened levels of gender-based violence, especially in the continent’s many fragile and conflict-affected countries, and few options for childcare or child support, which dissuades many from launching businesses or taking on full-time employment.



With all this in mind, ambitious women in Africa might be too discouraged to start businesses. They shouldn’t be.&nbsp; &nbsp;&nbsp;



IFC, the World Bank, and many other development and financial institutions are ramping up their work supporting women in Africa, better grasping the complexity—and tenacity—of the gender gap and designing programs to tackle it from all sides.



In other words, we are integrating a focus on gender across more and more of our work, from investments to advisory services programs, approaching the challenges more strategically and deliberately, listening to women and learning what support they need most.



This means understanding and acting on those three big gaps: access to networks, access to markets, and access to finance.



We are certainly increasing our financing to women-led businesses, but more funding alone isn’t the solution. A bigger pie means nothing to someone without a seat at the table. What African women need – and what we are delivering – are programs that provide that seat.



For example, IFC’s Sourcing2Equal is a global program designed to increase procurement from women-owned and -led small businesses. Launched in partnership with the Women Entrepreneurs Finance Initiative (We-Fi) and the Government of Norway, the program has trained 800 women on procurement and facilitated the signing of 100 new contracts for women-owned or run businesses. This is only a start.



IFC’s She Wins Africa program offers training, mentorship and networking opportunities to women across Africa, while IFC’s <a href="https://www.linkedin.com/posts/ifc-africa_agribusiness-gear-gender-activity-7150438980205920257-DJal/">Gender Equality and Returns (GEAR) program</a> provides leadership development and management training for lower-income women. GEAR has been active in Asia and South Africa and plans to expand to other African countries.



At the World Bank, we are increasingly focused&nbsp;on preparing the success of women by investing in <a href="https://blogs.worldbank.org/nasikiliza/empowering-adolescent-girls-boost-economic-growth-africa-afe-0324">empowering adolescent girls</a>. After all, choices made in the critical 15–19-year-old period have major repercussions on a women’s economic trajectory. Keeping girls in school and boosting their completion rates is key to increasing women’s economic participation. Continuing education for grown women entrepreneurs can also be life changing, as shown by the success stories of <a href="https://www.worldbank.org/en/news/feature/2023/03/23/ethiopia-helping-women-entrepreneurs-succeed-one-challenge-at-a-time">32,000 women entrepreneurs in Ethiopia</a> who have benefited from business training through a Bank-financed program that has helped many of them increase their incomes and expand their firms.



But the question of progress remains.



At IFC and the World Bank, we are seeing more and more private businesses in Africa wanting to support women, whether through focused financial products, training, procurement, or by increasing women’s participation in their workforces. Many banks are also dedicating a portion of their MSME financing to women and providing them with dedicated financial training. &nbsp;



As importantly—most importantly, perhaps—by supporting women today, we are helping build the networks and markets, and establish the leaders and role models, that will drive gender equality and opportunity for women in the coming years and decades in Africa.



One final statistic is worth mentioning. African women have the highest rate of entrepreneurial activity in the world at an estimated 24 percent—and are more likely to start businesses than their counterparts in other regions in the world.



The percentage is high, at least in part, because formal (or even informal) employment opportunities are limited. But instead of idling, millions of African women are rising to shape their own economic futures. We need to do all we can to support them.



<figure class="wp-block-image size-full is-style-default"><img loading="lazy" decoding="async" width="768" height="768" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/OFFICIAL-BIO-PHOTO-VK-2022-768x768-003.jpg" alt="" class="wp-image-470435" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/OFFICIAL-BIO-PHOTO-VK-2022-768x768-003.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/OFFICIAL-BIO-PHOTO-VK-2022-768x768-003-300x300.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/OFFICIAL-BIO-PHOTO-VK-2022-768x768-003-90x90.jpg 90w" sizes="auto, (max-width: 768px) 100vw, 768px" /><figcaption class="wp-element-caption">Victoria Kwakwa is Vice President for Eastern and Southern Africa at the World Bank</figcaption></figure>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="800" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Sergio-Pimenta-Photoshoot-CIV-1-820x800.jpg" alt="" class="wp-image-470436" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Sergio-Pimenta-Photoshoot-CIV-1-820x800.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Sergio-Pimenta-Photoshoot-CIV-1-300x293.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Sergio-Pimenta-Photoshoot-CIV-1-92x90.jpg 92w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Sergio-Pimenta-Photoshoot-CIV-1-768x750.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Sergio-Pimenta-Photoshoot-CIV-1-1536x1500.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Sergio-Pimenta-Photoshoot-CIV-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Sérgio Pimenta is IFC Vice President for Africa </figcaption></figure>



Together, they co-chair the World Bank Group’s Diversity, Equity and Inclusion General Counsel.

OFFICIAL-BIO-PHOTO-VK-2022-768×768-003

March Is Women’s History Month; How Can We do More to Support Africa’s Women in Business?

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="394" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/USFed-820x394.jpg" alt="" class="wp-image-470131" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/USFed-820x394.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/USFed-300x144.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/USFed-160x77.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/USFed-768x369.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/USFed.jpg 970w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



The release of the latest trove of data on the US economy provided plenty of good news: the country’s growth forecast is resilient; the labor market is buoyant, and inflation remains on its downward trajectory. The personal consumption expenditure (PCE) price index—the Federal Reserve’s preferred inflation measure—<a href="https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20240131.pdf">rose</a>&nbsp;2.6% over the 12 months ending in December, well below the 5.4% recorded at end-2022. (Remove volatile food and energy costs, and core PCE prices have been&nbsp;<a href="https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20240131.pdf">running</a>&nbsp;at just 1.9%).



Momentum is thus building in favor of adjusting the central bank’s monetary policy stance to focus more on growth objectives and sustain the post-pandemic economic expansion. As tempting as such a policy move may be, hastily cutting interest rates is not a risk-free proposition even in the best of times. The risks are especially acute today given the state of our highly-geopoliticized, polycrisis world, in which supply-chain disruption has become a permanent feature of the global economy.



Though the US economy&nbsp;<a href="https://www.imf.org/en/Publications/WEO/Issues/2024/01/30/world-economic-outlook-update-january-2024">defied</a>&nbsp;most economists’ expectations for a recession, recording growth of 2.5% in 2023 – the highest among advanced economies – the risk has not abated entirely, with sharp monetary tightening emerging as the major threat to a positive outlook.



Bringing inflation to heel without causing a recession was&nbsp;<a href="https://www.project-syndicate.org/commentary/central-banks-combat-inflation-economic-cost-by-hippolyte-fofack-2022-05?barrier=accesspaylog">always</a>&nbsp;a tall order, managing the tradeoff between price stability and financial stability. The previous year therefore represents a remarkable pendulum swing for the US economy, in stark contrast to the euro area, where the European Central Bank aggressively tightened monetary policy to combat inflation and growth was anemic at just 0.5%, weighed down by Germany which saw its economy&nbsp;<a href="https://www.reuters.com/markets/europe/german-economy-contracted-03-2023-stats-office-2024-01-15/#:~:text=BERLIN%2C%20Jan%2015%20(Reuters),Statistics%20Office%20said%20on%20Monday.">contract</a>&nbsp;by 0.3% in 2023.



Several factors helped keep the US economy on an expansionary track. First, and perhaps the most important, is the&nbsp;<a href="https://home.treasury.gov/news/press-releases/jy1693">scale</a>&nbsp;(more than 25% of GDP) of pandemic relief, infrastructure spending, and investment incentives.



Unlike during previous economic recoveries, US business investment has been particularly strong post-pandemic. Expressed as a percentage of GDP, business fixed investment has&nbsp;<a href="https://home.treasury.gov/news/featured-stories/the-inflation-reduction-act-and-us-business-investment">remained</a>&nbsp;steady, at about the same level as in the pre-Covid years, a better outcome than any post-recession period since 1980.



Second, the ancillary benefits of increased government spending have also been keenly felt at the household and state levels. Preliminary analysis shows that state and local government spending has&nbsp;<a href="https://www.wsj.com/articles/gdp-report-consumer-spending-economy-price-index-425deb40">contributed</a>&nbsp;more than twice as much to GDP over the last two years than over the preceding five years ending in 2021.&nbsp;And with the tight labor market sustaining wage growth, consumption spending has remained strong as well,&nbsp;<a href="https://www.wsj.com/articles/gdp-report-consumer-spending-economy-price-index-425deb40">contributing</a>&nbsp;over 1.9 percentage points to the 3.3% expansion recorded in Q4 2023.



Having evaded a major economic downturn the new consensus among market analysts and some political leaders is an aggressive&nbsp;<a href="https://www.wsj.com/finance/banking/regional-banks-had-another-ugly-quarter-db141a0e">pivot</a>&nbsp;toward rate cuts to provide further relief to businesses and sustain the growth momentum. Senator Sherrod Brown, the Chairman of the Senate Banking Committee, has urged Fed Chair Jerome Powell to dial back rate hikes,&nbsp;<a href="https://www.brown.senate.gov/newsroom/press/release/brown-to-fed-cutting-rates-will-cut-housing-costs">writing</a>&nbsp;“restrictive monetary policy is no longer the right tool for combatting inflation.”



But despite the expected growth deceleration, the US economy is still expanding at a solid pace. Corporate earnings are expected to rise by more than 12% this year, and the latest survey from the University of Michigan shows that consumer confidence in the US economy has&nbsp;<a href="https://www.businessinsider.com/consumer-confidence-economy-stock-market-gas-prices-eggs-vibes-recession-2024-1#:~:text=Since%20November%2C%20the%20University%20of,personal%20finances%20has%20also%20improved.">jumped</a>&nbsp;by 29% since November, the greatest two-month surge since 1991.&nbsp;At the same time, impressive jobs growth in January 2024 has&nbsp;<a href="https://www.bls.gov/news.release/pdf/empsit.pdf">kept</a>&nbsp;the US unemployment rate at a remarkably low level.



More ominous, however, is the threat of supply-chain bottlenecks, one of the main drivers of transitory inflation. These bottlenecks have created so much inflationary havoc over the last few years that they may not be transitory after all. Geopolitical shocks have dramatically&nbsp;<a href="https://www.imf.org/en/Publications/WEO/Issues/2024/01/30/world-economic-outlook-update-january-2024">increased</a>&nbsp;commodity prices, which were the major drivers of inflationary pressures as illustrated by the dynamics of core inflation in recent months.



Already, Houthi attacks in the Red Sea are&nbsp;<a href="https://www.bloomberg.com/news/articles/2024-01-24/red-sea-crisis-how-houthi-attacks-raise-inflation-supply-chain-worries">taking a toll</a>&nbsp;on trade and have dramatically increased the average costs of transporting goods across the globe. As this latest episode illustrates, the world is always just one crisis away from further disruption to international supply chains.



Internal dynamics are also pointing to other sources of inflationary risk. Further price pressure cannot be ruled out in a strong economy&nbsp;<a href="https://www.project-syndicate.org/commentary/supply-side-constraints-mean-excessively-low-fed-real-interest-rates-would-unleash-inflation-by-michael-spence-2024-02?barrier=accesspaylog">contending</a>&nbsp;with myriad structural supply constraints, such as labor shortages and declining productivity. These unknowns compound uncertainty about current inflation dynamics, necessitating a more cautious approach in the management of the growth-inflation tradeoff. Interestingly, investors in interest-rates futures markets were divided on whether the Fed should cut rates at its March meeting, and market-based probability of a March cut has&nbsp;<a href="https://www.wsj.com/economy/central-banking/fed-leaves-rates-steady-and-opens-door-wider-to-cuts-d10a107d">fallen</a>&nbsp;to around 35% since the Fed’s first FOMC meeting of the year last January.



Timing is everything when it comes to monetary policymaking, and the Fed has earned the right to make its next interest rate move at the time of its choosing as it navigates its way toward the neutral policy stance.



Dr Hippolyte Fofack, a Distinguished Fellow at the Global Federation of Competitiveness Councils (GFCC) and research associate at the Harvard University CAS, is a former chief economist and director of research at Afreximbank.

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Rate Cuts? Timing Is Everything for Fed

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="234" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/blog-2099x600-md-central-bank-ymgerman-istock-by-getty-images-820x234.jpg" alt="" class="wp-image-469808" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/blog-2099x600-md-central-bank-ymgerman-istock-by-getty-images-820x234.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/blog-2099x600-md-central-bank-ymgerman-istock-by-getty-images-300x86.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/blog-2099x600-md-central-bank-ymgerman-istock-by-getty-images-160x46.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/blog-2099x600-md-central-bank-ymgerman-istock-by-getty-images-768x220.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/blog-2099x600-md-central-bank-ymgerman-istock-by-getty-images-1536x439.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/blog-2099x600-md-central-bank-ymgerman-istock-by-getty-images-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Credit: ymgerman/iStock by Getty Images</figcaption></figure>



Central bankers today face many challenges to their independence. Calls are growing for interest-rate cuts, even if premature, and are likely to intensify as half the world’s population votes this year. Risks of political interference in banks&#8217; decision making and personnel appointments are rising. Governments and central bankers must resist these pressures.



But why does this matter? Just consider what independent central banks have achieved in recent years. Central bankers steered effectively through the pandemic, unleashing aggressive monetary easing that helped prevent a global financial meltdown and speed recovery.



As the focus shifted to restoring price stability, central bankers appropriately tightened monetary policy—albeit on different timelines. Their response helped to keep inflation expectations anchored in most countries even as price increases reached multi-decade highs. Emerging markets were leaders in tightening early and forcefully, enhancing their credibility.



These central bank actions have brought inflation down to much more manageable levels and reduced the risks of a hard landing. While the battle isn’t yet over, their success thus far has largely been because of the independence and credibility that many central banks have built up in recent decades.



The recent success in bringing down inflation contrasts sharply to the economic instability that prevailed during the high inflation period of the 1970s. Back then, central banks didn’t have clear mandates to prioritize price stability, or clear laws protecting their autonomy. As a result, they were often pressured by politicians to lower interest rates when inflation was high.



Everyone was hurt by this high inflation, boom and bust era—especially people living on fixed incomes who saw their real incomes and savings eroded. Success in reducing inflation only came in the mid-1980s when central banks were given political support to aggressively fight inflation.



Measuring impact



Extensive research, including our own, demonstrates the critical importance of central bank independence.



One&nbsp;<a href="https://data.imf.org/api/document/download?key=74044185&amp;utm_medium=email&amp;utm_source=govdelivery">IMF study</a>, looking at dozens of central banks from 2007 to 2021, shows that those with strong independence scores were more successful in keeping people’s inflation expectations in check, which helps keep inflation low. Independence is critical, and has become more predominant among countries at every income level.



Another IMF study&nbsp;<a href="https://www.imf.org/en/Publications/WP/Issues/2022/09/16/Central-Bank-Independence-and-Inflation-in-Latin-America-Through-the-Lens-of-History-523542?utm_medium=email&amp;utm_source=govdelivery">tracking</a>&nbsp;17 Latin American central banks over the past 100 years examines factors including: decision-making independence, clarity of mandate, and whether they could be forced to lend to the government. It also found that greater independence was associated with much better inflation outcomes.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2024/03/21/strengthen-central-bank-independence-to-protect-the-world-economy?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2024/03/9184675/md-blog-cbi-chart-v2-71_original.png" alt="two charts showing 100 years of central bank independence and inflation in Latin America"/></a></figure>



The bottom line is clear: central bank independence matters for price stability—and price stability matters for consistent long-term growth.



But to wield enormous power in democratic societies, trust is key. Central banks must earn that trust every day—through strong governance, transparency, and accountability, and delivering on core responsibilities.



Strong governance helps ensure that monetary policy is predictable and based on achieving mandated long-term goals, rather than short-term political gains. It starts with a clear legislative mandate that sets price stability as the main objective.



Even if employment is put on the same pedestal—as with the US Federal Reserve’s dual mandate—legislators have recognized that price stability aids macroeconomic stability, which ultimately supports employment.



Strong governance and independence mean central bankers should have control of their budgets and personnel, and not be subject to easy dismissal based on their policy views or actions taken within the legal mandate.



In exchange, they must be accountable, and they should be transparent.



They should regularly explain how their actions seek to advance their legislatively mandated goals, both in detailed reports and through testimony before lawmakers. Because central bank decisions profoundly affect everyone, central banks and governments should continue working to raise economic literacy so the people can be part of the policy conversation.



And trust ultimately depends on their success in delivering price stability, and ensuring the financial system remains stable.&nbsp;



Respecting independence



Other branches of government have clear responsibilities in helping central bankers achieve their mandated objectives and navigate hazards ahead. This includes not only laws proclaiming independence, but also following the letter and spirit of such laws.



It also means taking into account how other policy actions impact the job of central bankers.



Enacting prudent fiscal policies that keep debt sustainable helps to reduce the risk of “fiscal dominance”—pressure on the central bank to provide low-cost financing to the government, which ultimately stokes inflation. Fiscal prudence also provides more budget space to support the economy when needed, bolstering economic stability.



Another government responsibility that is often shared with central banks: maintaining a strong and well-regulated financial system.



Financial stability benefits the whole economy and reduces the risk that the central bank becomes reluctant to raise interest rates for fear of causing a financial meltdown. Actions to strengthen financial institutions since the global financial crisis, including in emerging markets, allowed central banks to raise rates sharply without undermining the financial system. This major achievement must be preserved.



When central banks and governments each play their roles, we have seen better control of inflation, better outcomes in growth and employment, and lower financial stability risks.



The IMF is here to help policymakers face these challenges. We strongly support central bank independence, providing tailored technical assistance to members working to improve governance and legal frameworks. We make independence an explicit pillar in some Fund-supported financing programs, agreeing with members on actions to measure and achieve it.



To strengthen this work, we introduced a new way to&nbsp;<a href="https://www.imf.org/en/Publications/WP/Issues/2024/02/23/A-New-Measure-of-Central-Bank-Independence-545270?utm_medium=email&amp;utm_source=govdelivery">measure independence</a>&nbsp;based on which aspects of it matter most, according to our recent survey of central banks.



And to increase accountability, we have developed a&nbsp;<a href="https://www.imf.org/external/datamapper/CBT/?utm_medium=email&amp;utm_source=govdelivery#:~:text=The%20CBT%20is%20an%20international,and%20contribute%20to%20policy%20effectiveness.#:~:text=The%20CBT%20is%20an%20international,and%20contribute%20to%20policy%20effectiveness.#">transparency&nbsp;code</a>&nbsp;that helps central banks assess and improve their practices.



By working together—central bankers and government leaders, legislatures, and the people—we can preserve and strengthen central banks to win the fight against inflation today and foster economic stability and growth for years to come.



This will benefit everyone—the retiree living on a fixed income; the small entrepreneur trying to build her business; and every society that could face unrest when inflation gets out of control.



With such high stakes, we must preserve and strengthen central bank independence.

blog-2099×600-md-central-bank-ymgerman-istock-by-getty-images

Strengthen Central Bank Independence to Protect the World Economy

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="771" height="746" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/image001-3.jpg" alt="" class="wp-image-469794" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/image001-3.jpg 771w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/image001-3-300x290.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/image001-3-93x90.jpg 93w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/image001-3-768x743.jpg 768w" sizes="auto, (max-width: 771px) 100vw, 771px" /><figcaption class="wp-element-caption">Elais Monage, President of the Black Business Council</figcaption></figure>



Reflecting on the Black Industrialists and Exporters Conference hosted by the Department of Trade Industry and Competition (DTIC) this week one is left with mixed feelings that while the aspirations of the program are noble, not enough is being done to push the boundaries and realise the full potential of the Black Industrialists program. One of the fundamental flaws limiting this programs success is the lack of a clear and well-articulated description coupled with a broader vision of what the notion of a black industrialist actually entails.



Lewis Carroll’s age-old adage, that if you don’t know where you are going, any road will take you there, rings true here. There is a growing sense of the term “black industrialist” beginning to take on a “catch-all” phrase to blanket everyone, from those who have built empires from the ground up, hold controlling equity stakes and demonstrate deep operational expertise in their respective businesses, to anyone with a loan or grant from the Industrial Development Corporation (IDC), National Empowerment Fund (NEF) or the DTIC and holding notional equity stakes in companies.



This is not to suggest that that notion of a black industrialist should be used as a gate-keeper with regards to who can and who can’t be referred to by the term. However, there are some obvious risks to the approach that is currently being adopted, hence some perceived limitations of the program. The first, and perhaps a subordinate issue, is that blanketing all and sundry as black industrialists does not give the emerging and upstart entrants something to aspire to, simply because the concept is neither understood nor properly defined. At the same time flippant use of the term dilutes the weight of the notion of a black industrialist for those who have a proven track record and have created and developed multi-generational assets of significant scale.&nbsp;



The second, and more prevalent matter, is that it becomes increasingly elusive to tangibly measure where progress and success of black industrialists is happening. One is led to make this second conclusion based on the assessment of the last 30 years of democracy, 20 years since the implementation of the Broad Based Black Economic Empowerment (BBBEE) legislation and 9 years since the launch of the Black Industrialists Policy, that the country cannot attest to having a black owned commercial bank, telecommunications company or oil major. There are a handful of law firms, consulting houses and auditing firms that are black owned and controlled, however these are far and few apart while the mainstream firms in these respective areas cannot be attributed as being in the hands of black people.&nbsp;&nbsp;



While it is the stated intention of the government to develop a class of black industrialists, who will diversify the historic pattens of ownership of industries making the industries representative of the country’s broader demographic, and to create the fertile ground for these industrialists to build something of generational value, a few areas can be highlighted where the state is missing a fundamental opportunity to purposefully attain this aspiration.



The spectrum auction and licencing round of 2022, with the next phase set for 2024, is one such area where the state missed an opportunity to sow the seeds for the development of the black-owned telecommunications company of formidable statue, however, much of this capacity was taken up, and likely to happen again in the next round, by the established telecommunication companies, entrenching their dominance. The Public Procurement Bill is another such area that could be leveraged by the state, given its R1 trillion annual spend, to run a massive scale industrialisation program targeted at setting up and developing black industrialists. However, not only has the process of legislating the bill taken an inordinate amount of time, prior versions of the bill did not explicitly take this as an opportune moment to drive the black industrialist’s agenda. Common to both of these examples is that these are public instruments, or areas in which the government has considerable influence, but are seemingly unable to match up the stated black industrialists’ aspiration with the very tools in the government’s tool kit.



It is my assessment that the factors contributing to limiting the impact of the governments own stated intension to develop this class of black industrialists is firstly a lack of a clear and well-articulated vision of what the black industrialists program seeks to achieve. And secondly, an ancillary but fundamental factor is what a black industrialist actually is. This is where the government needs to go back to the drawing board, because articulating these aspects will guide which direction policy will go and by extension resources that need to be mobilised to achieve the goal.&nbsp;



As a start, my submission is that the definition of a black industrialist should entail two critical aspects. Firstly, a company that is both majority black owned with effective beneficial value accruing to the owners. Secondly, there must be demonstrable operational involvement by the industrialists in all aspects of the business, and not limited to boardroom positions.



On the part of the government defining its vision for black industrialists, it is important to note that many instruments are in the direct control of the state to achieve the aspiration of developing a black industrialist class of noteworthy scale, however, political will to achieve this is the ultimate overlay if any such program is going to enjoy success.

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The notion of a black industrialist requires a complete review if the program is going to have the desired transformational impact

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="463" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Dr-Ngwenya_2-002-1-820x463.jpg" alt="" class="wp-image-467655" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Dr-Ngwenya_2-002-1-820x463.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Dr-Ngwenya_2-002-1-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Dr-Ngwenya_2-002-1-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Dr-Ngwenya_2-002-1-768x434.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Dr-Ngwenya_2-002-1-1536x868.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Dr-Ngwenya_2-002-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Dr. Mthandazo Ngwenya</figcaption></figure>



The rise in inflation, energy costs, high unemployment, and skyrocketing food prices in recent years have placed severe pressures on the consumer and created what is commonly called a ‘cost of living crisis.’



An article published by BusinessTech in September last year titled ‘The Cost of Being Middle Class in South Africa’ noted that it takes on average just 5 days for middle-income South Africans to spend about 80% of their monthly income. Meaning they only have about 20% on average of their income to survive on for the remaining 20 days each month.



Of the 80% of their income spent within the first week of receiving their salaries, 73% out of the 80% is estimated to be spent on servicing debts and other fixed cost elements. This means on average the consumer is left with slightly above 20% of their disposable income to purchase food, medicines, petrol, and transport costs along with other daily necessities for survival for the remaining three weeks of the month before the next payday. The middle-class lives pay cheque to pay cheque with limited accumulated savings, limited fixed capital formation, and rising debt service obligations with associated marked increases in consumer debt defaults – hence the coinage of ‘crisis’ in defining the true status of the middle class today.



A pervasive phenomenon that has added to the woes of the middle class impacting their grocery bills and yet being less frequently talked about relates to the economic concepts of Shrinkflation and Skimpflation.



<h1 class="wp-block-heading" id="h-so-what-is-shrinkflation">So, what is Shrinkflation?</h1>



In simple terms, many consumers feel like the quantity of some food products in the shops has decreased, and yet the price of those products has stayed the same or increased. Many consumers are left confused, upset, or simple exacerbated by the situation. Many consumers ask themselves ‘is this real or am I just imagining this reduction in quantity.’ It turns out that many consumers are right about this reduction in the quantity of some of their favourite foods. Shrinkflation is the real process where manufacturers reduce the quantity of their products for example a 500 ml Coke buddy is now reduced to 440ml and yet the price stays the same or increases slightly. This is done by manufacturers to preserve or increase profit margins in the face of rising input costs of production – for example rising energy prices. Instead of passing the increased input cost to the consumer, the manufacturer simply reduces the size of the product and keeps its prices constant or slightly raises them.



The impact of shrinkflation is that the consumer gets less product in their monthly shopping basket for the same level of expenditure. They are left scratching their heads, puzzled as to why the grocery bags are getting lighter and lighter with each visit to the supermarket.



In some product ranges and categories, the poor middle class has been hit by shrinkflation and its equally nefarious cousin Skimpflation!



<h1 class="wp-block-heading" id="h-and-what-is-skimpflation">And what is Skimpflation?</h1>



Skimpflation refers to when manufacturers continue to release the same food products but start making them with cheaper ingredients than before in a bid to cut costs. It may equally apply to services that a hotel offers – less frequent change of bedding, towels, or longer waiting times in restaurants due to a reduction in service staff. In skimpflation, you are getting less value for your money as a result of the reduction in the quality of inputs or services. Most common consumer sentiments range from ‘this ice cream just does not taste the same as it used to or why are my jeans less durable than before as examples.’ In cases of skimpflation, the product may weigh the same, but the manufacturers have reconfigured the composition of the ingredients of the product and reconstituted the product using cheaper alternatives for the more expensive ingredients, for example, adding more raisins and fewer cashews nuts in a mixed nuts bag.



<h1 class="wp-block-heading" id="h-is-this-a-south-african-problem">Is this a South African problem?</h1>



A University of Birmingham Business School blog titled ‘Shrinkffation and skimpffation, a permanent loss in what your money can buy’, published in October 2023, cited research undertaken by Barclays Banks in June 2023 where 70% of the British public had noticed examples of shrinkflation in the products they bought, particularly in goods such as chocolate (46%), crisps (42%), packs of biscuits (37%), and snack bars (32%). The changes in the quantity or quality of products and services have a direct and serve impact on consumer wallets.



So concerned by the impacts of shrinkflation on United States of America consumers, President Joe Biden took to social media in February this year, on the eve of the Super Bowl to lament its impacts and called for an immediate stop of the practice by major USA producers. The USA is heading to an election in November and without a doubt, the rising cost of living is top of mind for many middle class Americans.



Far from being limited to South Africa, the phenomena of shrinkflation and skimpflation have taken on rising significance even in developed markets. Producers face risks of consumers who are cash-strapped buying less of the product or opting for other cheaper alternatives altogether. In an economy faced with a prohibitive cost of living due to rising prices, consumer brand loyalty becomes less guaranteed, and premium brands may risk losing market share should they employ such tactics.



One takeaway for the South African middle class facing a cost-of-living crisis – your perceived reduction in quantity or quality of products and services may very well be real and not imaged! Compare prices, read the ingredient compositions, and make smart choices to conserve your disposable income.

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The crisis of Shrinkflation and Skimpflation on Middle-Class Disposable Incomes

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="687" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/OLUMIDE-OLATUNJI-1-820x687.jpg" alt="" class="wp-image-465749" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/OLUMIDE-OLATUNJI-1-820x687.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/OLUMIDE-OLATUNJI-1-300x252.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/OLUMIDE-OLATUNJI-1-107x90.jpg 107w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/OLUMIDE-OLATUNJI-1-768x644.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/OLUMIDE-OLATUNJI-1-1536x1288.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/OLUMIDE-OLATUNJI-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Olumide Olatunji, the Managing Director of Access Bank Ghana</figcaption></figure>



The expansion of African countries&#8217; involvement in international trade and global value chains holds the promise of triggering a profound ripple effect, transforming economies, and alleviating poverty across the continent.



But our prosperity isn’t solely reliant on international value chains. In West Africa, our rapid population growth, rising incomes, and a burgeoning middle class makes us a dynamic consumer market. Our region is home to a wealth of natural resources, from fertile agricultural land to abundant mineral deposits and a diverse range of industries, from manufacturing and technology to creative arts and tourism.



Now is the time to harness this potential and unleash the power of intra-African trade. By strengthening our economic ties and exchanging goods and services within our own region, we can create jobs, boost economic growth, and improve the lives of millions of people.



Enhancing intra-African trade presents a multitude of benefits for our region. By reducing our reliance on external markets, we fortify our resilience against global economic upheavals. It fosters the evolution of regional value chains, catalyzing heightened productivity and innovation. This, in turn, fuels economic growth, and bolsters regional integration, nurturing a shared sense of unity and cooperation.



The African Continental Free Trade Agreement (AfCFTA), operational since January 2021, offers a glimpse into the potential transformational impact of a single continental market. The <a href="https://www.brookings.edu/articles/figure-of-the-week-the-african-continental-free-trade-areas-impact-on-income-and-wages/">United Nations Economic Commission for Africa</a> estimates that the AfCFTA could raise intra-Africa trade to as much as $50bn to $70bn by 2040 while the <a href="https://www.worldbank.org/en/topic/trade/publication/free-trade-deal-boosts-africa-economic-development">World Bank</a> predicts that it could increase real income as much as 9% by 2035, lifting 50 million people out of extreme poverty.



This is where Access Bank emerges as a pivotal player having grown from a small presence in Nigeria to becoming Africa’s largest banks by customer numbers. The Bank has been on a journey, to strategically establish presence across Africa, expanding to high-potential markets and leveraging the benefits of the (AfCFTA). In West Africa alone, outside of Nigeria, we have expanded into five other countries and the latest acquisition of Standard Chartered Bank’s shareholding in Cameroon, The Gambia and Sierra Leone will further enhance the bank’s presence in the region.



We are establishing a strong presence in all the major trade centers on the continent, enabling us to make our trade finance expertise available to West African multinational corporations as well as small and medium-sized enterprises (SMEs). As we consolidate our Wholesale business, supporting intra-African trade across the continent, our international subsidiaries will continue to play a critical role in anchoring trade across key global markets.



It would, however, be remiss of me not to highlight that, to fully realize the potential of intra-African trade, we must address the challenges that hinder its growth. These include inadequate infrastructure, such as roads, railways, and ports, which makes transportation of goods costly and inefficient; non-tariff barriers, such as complex customs procedures and regulatory hurdles which discourage trade; and limited access to finance, particularly for SMEs, which while being the backbone of our economies,<a href="https://www.afdb.org/en/documents/smes-demand-trade-finance-africa-case-kenya-and-tanzania-volume-14-issue-6"> face an annual trade finance gap of approximately $81 billion</a>.



Overcoming these challenges requires concerted action at both private and public sectors. While governments must invest in infrastructure development, streamline trade procedures, and harmonise regional regulations to facilitating cross-border trade, and promote regional value chains, the private sector also has a key role to play in driving intra-African trade.



As African businesses continue to expand their reach across the continent, the role of trade finance is expected to grow even more significant. By providing the right funding at fair costs, trade finance empowers businesses to optimize their bottom line, contributing to the sustainable development of Africa&#8217;s burgeoning economies.



The benefits of trade finance extend beyond access to capital. Access Bank&#8217;s trade finance solutions also help businesses manage payment and supply risks, ensuring seamless transactions and protecting against potential disruptions. This reduces the burden on businesses and allows them to focus on their core operations.



As we move forward, it is essential to foster a spirit of regional cooperation and collaboration. We must recognize that our destinies are intertwined, and that our success is linked to the success of our neighbors. By working together, we can create a prosperous and interconnected West Africa, where trade serves as a catalyst for economic growth, social development, and shared prosperity.



Access Bank stands ready to support the region in seizing this opportunity and building a future where West Africa stands tall, not just as a region of immense potential, but as a region that has harnessed its strengths to create a brighter future for all its citizens.

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Unleashing the Power of Intra-African Trade: A Path to Prosperity for West Africa

In sub-Saharan Africa, more women start businesses than anywhere else globally, a testament to their entrepreneurial spirit. However, despite this drive, persistent barriers restrict their economic potential – including financial barriers. As we celebrate International Women’s Day, we want to reiterate that prioritizing investments in women’s financial inclusion is crucial to rectifying these imbalances and to fostering inclusive, equitable economic growth &#8211; ensuring that millions of women can reach their full potential.



Women entrepreneurs and access to finance



Over 74% of women in sub-Saharan Africa are employed in the informal sector, and only 33% hold a formal bank account. While informal employment can offer flexibility and options when finding a formal job is difficult, informal employment can lead to significant vulnerabilities: workers do not benefit from public social protection schemes for health, unemployment, and pensions, heightening their risk of poverty and reducing their resilience to crises like the COVID-19 pandemic. The additional domestic duties also sometimes hinder the pursue of economic opportunities, hence creating a vicious circle.



For Africa’s female entrepreneurs looking to start or expand their business, access to capital, like loans or through credit, is a major hurdle. Only 15% of loans to small and medium-sized businesses in the region go to women-owned ventures. Cultural barriers, such as lack of property or land ownership, often prevent women from meeting loan requirements because they don&#8217;t have the collateral banks believe they need to give them a loan. Ironically, despite demonstrating higher loan repayment rates than men, women-led businesses are often perceived as riskier by financial institutions. This has created a staggering $42 billion finance gap for women entrepreneurs on the continent, demanding immediate action. 



Closing this gap will benefit not just women entrepreneurs, but their families, communities, and our economies. Female-led startups and businesses are key drivers of socio-economic development, creating a foundation of prosperity across the continent. In Mauritania, the West Africa Coastal Areas (WACA) has contributed funding for the establishment of a sardine canning facility for the Mauritanian Women&#8217;s Business Council (CMFA), enhancing their capacity to manufacture high-quality canned products, penetrate global markets, and boost their income. Because money in women’s hands matters: When women control household incomes, their children’s health improves, and malnutrition is reduced by 43%. African governments and policymakers can unlock this potential by implementing gender – focused policies and budgeting, which are fundamental in creating an enabling environment that uplifts women.



Empowering women through digital financial inclusion



Innovative digital financial services and tools are empowering millions of African women to access startup capital, conduct business efficiently, and save and invest their money. In Kenya, the mobile money platform M-Pesa has been phenomenally successful in promoting financial inclusion, particularly benefiting young women with limited education and income. Women can use mobile money as the main financial channel for saving, helping them independently access financial services and transition from subsistence agricultural work into formal and self-owned business opportunities. Mobile money, and other digital financial tools, have emerged as an equalizing force, providing women with a critical link to the formal economy and a gateway to economic security.



In Mauritania, one of the leading banks Banque Populaire de Mauritanie (BPM) pioneered efforts in mobile banking through its mobile banking service called Bankily leading to a surge in mobile banking usage, which will significantly boost female entrepreneurship. Furthermore, the Investment Promotion Agency of Mauritania, along with the Ministry of Economy and Ministry of Digitalization, are collectively pushing to improve the economic landscape to expand access for women entrepreneurs.



However, despite double-digit growth in mobile phone ownership across Africa, only 12% of women possess digital finance knowledge and communications technology skills. Additionally, less than 30% of women have access to the internet. In Nigeria, for instance, socio-economic conditions and cultural norms limit women’s digital opportunities, with 77% of rural Nigerians lacking access to the internet and women potentially being prevented from accessing internet services by male family members. Addressing this digital divide is essential to ensuring all women have the power to save and invest for the future, proactively managing their finances.



Building digital inclusion requires equipping women with the skills and resources necessary to fully participate in the digital economy. Investing in initiatives like the Africa Digital Financial Inclusion Facility (ADFI), which empowers women farmers in Kenya, Nigeria and Zambia through affordable digital microinsurance, will catalyze change by building resilience and maximizing the socio-economic returns from digital technologies. Clearly, financial digitalization provides the backbone for socio-economic transformation and must be a priority on Africa’s development agenda. 



Closing the gender gap in finance is not just an economic imperative; it’s a social one. African women are entrepreneurial trailblazers, and when women achieve their economic potential, whole societies benefit. This International Women’s Day, we urge African governments, organizations, and communities to not only recognize but actively harness women’s economic potential and power. By leveraging the power of digital solutions to support African women entrepreneurs, we initiate a virtuous cycle of empowerment and prosperity that uplifts all. Embracing collective action and continuous investment in gender-inclusive digital platforms, we can amplify women’s economic influence, propelling Africa toward its overarching development objectives.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="800" height="800" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Aissata-2024-03-05-at-16.34.32-002-800x800.jpeg" alt="" class="wp-image-464022" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Aissata-2024-03-05-at-16.34.32-002-800x800.jpeg 800w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Aissata-2024-03-05-at-16.34.32-002-300x300.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Aissata-2024-03-05-at-16.34.32-002-90x90.jpeg 90w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Aissata-2024-03-05-at-16.34.32-002-768x768.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Aissata-2024-03-05-at-16.34.32-002.jpeg 1280w" sizes="auto, (max-width: 800px) 100vw, 800px" /><figcaption class="wp-element-caption">Aïssata Lam is the Director General of the Investment Promotion Agency of Mauritania</figcaption></figure>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="656" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GA16441180_Rachel_Toku-Appiah_20220318_0001-2-820x656.jpg" alt="" class="wp-image-464023" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GA16441180_Rachel_Toku-Appiah_20220318_0001-2-820x656.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GA16441180_Rachel_Toku-Appiah_20220318_0001-2-300x240.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GA16441180_Rachel_Toku-Appiah_20220318_0001-2-113x90.jpg 113w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GA16441180_Rachel_Toku-Appiah_20220318_0001-2-768x614.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GA16441180_Rachel_Toku-Appiah_20220318_0001-2-1536x1229.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GA16441180_Rachel_Toku-Appiah_20220318_0001-2-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Rachel Toku-Appiah &#8211; Director &#8211; Policy, Advocacy and Communications for Africa, Bill and Melinda Gates Foundation, Johannesburg, South Africa.</figcaption></figure>

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Advancing Women’s Economic Power through Financial Access and Digital Technologies

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Making Bretton Woods Work for Africa

<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="706" height="703" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/Africa-in-the-Global-Village-Burna-Boy.jpg" alt="" class="wp-image-460345" style="width:840px;height:auto" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/Africa-in-the-Global-Village-Burna-Boy.jpg 706w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/Africa-in-the-Global-Village-Burna-Boy-300x300.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/Africa-in-the-Global-Village-Burna-Boy-90x90.jpg 90w" sizes="auto, (max-width: 706px) 100vw, 706px" /></figure>



Hidden in plain sight, Africans are in the thick of the kind of history-making that will define the 21st century.



In 2024, Africa presents a paradox.&nbsp; Its population is growing fast, but its&nbsp;<a href="https://www.ft.com/content/178bdc1c-256b-475b-b7c1-a9f68df9f933?segmentId=3f81fe28-ba5d-8a93-616e-4859191fabd8">economy</a>&nbsp;is growing slow.&nbsp; Conflicts are expanding not contracting.&nbsp; And yet its influence in the world is growing faster than ever.&nbsp; How come?



This is a result of two global trends that will help shape the world in the 21st&nbsp;century.



One is familiar to everyone and much discussed by analysts and the media: the geopolitical shift to a multipolar world.&nbsp; This gives African nations greater agency in the world, if they choose and are able to use it.&nbsp; Many African governments rightly say they want to pick and choose their own international partners, maintain good relations with all corners of the world; and the powers, old and new, great and middling, are beating a path to their door, keen to get their votes in the UN and their support for various international causes, from climate change to ‘civilizational values’, from human rights to national rights.



But it is the second trend that is equally significant and largely happening under the radar: the spread of Africans across the globe in the 21st&nbsp;century, the ever-growing African diaspora that is beginning to make its presence and influence felt in a growing number of places. When we look back in 50 or 100 years people will say: yes, that made a major difference to the world.



It is, of course, scarcely a new trend. &nbsp;From the beginning of humanity, it was the migration of homo sapiens out of Africa that began the human trajectory on which we are still engaged.&nbsp; In ancient and classical times, African influences can be found in Greece, Rome, the Arab world and beyond. The biggest migration was not voluntary but forced, through the trans-Atlantic slave trade, which took millions of Africans by brute force to the Caribbean and Americas, in a wholly subordinate role from which it took them over a hundred years to recover equal rights.



In the 19th&nbsp;and 20th&nbsp;centuries, migration flowed the other way, from Europe to Africa, but not as workers – as colonists, settlers, merchants and administrators.&nbsp; With independence in the second half of the 20th&nbsp;century, that flow reversed.&nbsp; Many Europeans returned home, and a growing number of Africans followed them.&nbsp; The 20th&nbsp;century also saw the most remarkable growth in Africa’s population, from around 140 million in 1900 to over 1.4 billion today (according to&nbsp;<a href="https://www.worldometers.info/world-population/africa-population/">latest estimates</a>), made possible by the transformation of economic and health conditions on the continent.



All such bursts in population growth elsewhere have given rise to outward migration.&nbsp; Since the 19th&nbsp;century, major migrations from Ireland, China, India, Armenia, Lebanon, Palestine, and of Jewish people from many countries have all had significant economic and sometimes political effects, both on the countries of origin and the countries of destination.&nbsp; People are like water: they will go wherever they need to; and if they cannot make a living in one place, they will move to another where they can.



The great African migration that is gathering impetus will have a similarly profound impact.&nbsp;&nbsp; Like previous migrants, Africans bring with them their own particular skills and characteristics.&nbsp; They are enormously enterprising, creative and connected – to each other and to the continent.&nbsp; Most visible to the rest of the world up to now has been African creativity, in music, the arts, film and literature, and achievement in the realm of sport.&nbsp; Africa is already a global force in the world of music, its beats setting a new standard for music elsewhere.&nbsp; This impact feeds back to the countries of origin, not just as remittances, but as economic and cultural influence.&nbsp; The rapidly expanding Nigerian diaspora is especially influential in business and culture, veritably a force to be reckoned with – as Nigeria’s presidential candidates recognised in the run-up to the last election.&nbsp; If Bola Tinubu’s new government can create a country and an economy that people are willing to invest in, Nigeria could begin to realise its potential as one of the world’s new ‘middle powers.’&nbsp; But for now it remains a big ‘if’.



The opportunities for them certainly exist overseas.&nbsp; The Old World is&nbsp;<a href="https://www.oecd.org/economy/ageing-inclusive-growth/">ageing</a>.&nbsp; The demand for labour in Europe, North America and Japan – and soon in China – is growing, a demand that young people from Africa (and Latin America) would be happy to meet.



But the obstacles to them doing so are severe.&nbsp; On top of the residue of racism left by the slave trade and European colonisation, voters in many prosperous countries are becoming less secure and more insular, reflected in the rise of nativist right-wing movements that seek to exclude foreigners and reduce or even stop immigration altogether, despite the shortage of workers.&nbsp; Unlike the European colonists of the 19th&nbsp;century, African migrants cannot force their way in.&nbsp; &nbsp;&nbsp;But they will prove hard to stop if the employment opportunities exist.



What does this mean for Africa?&nbsp; It means that at the level of people, even if not in trade or finance, Africa’s weight and influence in the world is rising.&nbsp; Many of the migrants seek to assimilate.&nbsp; Some – in the US and UK certainly – go into politics and make their voice heard.&nbsp; But most also retain close links with their families and countries of origin.



What is striking is how widespread African communities have become.&nbsp; In Jonny Pitts’ phrase, there is a whole culture of&nbsp;<a href="https://afropean.com/">Afropean</a>&nbsp;communities across Europe and into Russia.&nbsp; Who knew there were 16,000 Africans studying in&nbsp;<a href="https://www.globalcitizen.org/en/content/africans-in-ukraine-does-the-world-still-care/">Ukraine</a>&nbsp;until they fled with the outbreak of war in 2022?&nbsp; As Chimamanda Ngozi Adichie describes, there is a big community in&nbsp;<a href="https://www.theguardian.com/books/2013/apr/15/americanah-chimamanda-ngozi-adichie-review">America</a>.&nbsp; And in&nbsp;<a href="https://blogs.lse.ac.uk/africaatlse/2022/05/23/africans-in-china-see-the-country-as-a-dreamland-accidental-destination-migration%20/">China</a>, an African community of several hundred thousand persists despite the hostility Africans faced during Covid.



Everywhere, these communities will leave an indelible mark on the world and carry a lasting significance at home and overseas.

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Africa in the global village: Notes on some epochal trends

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-820x547.jpg" alt="" class="wp-image-459065" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Mthuli Ncube, Zimbabwe&#8217;s finance minister, sits in the audience during a plenary session on day two of the 28th World Economic Forum (WEF) on Africa in Cape Town, South Africa, on Thursday, Sept. 5, 2019. The World Economic Forum on Africa meeting runs from 4-6 September. Photographer: Waldo Swiegers/Bloomberg via Getty Images</figcaption></figure>



Paradoxically, climate change impacts are more pronounced in the low-carbon emitting countries, with events beyond the capacity of communities and countries to adapt. For instance, Africa’s carbon footprint is relatively small compared to other regions. In 2020, Africa’s total greenhouse gas emissions (GHGs) stood around 1.5 billion metric tonnes of carbon dioxide (CO2) equivalent, which represents about 3% of global emissions (<a href="http://www.unfccc.int">www.unfccc.int</a>).



<h2 class="wp-block-heading" id="h-climate-change-mitigation-and-adaptation">Climate Change Mitigation and Adaptation</h2>



Globally, there is consensus that upscaling the climate action agenda requires that the means of the implementation (MoI), namely finance, technology transfer, and capacity building be given utmost priority hence, the amplified calls for Parties to the United Nations Framework Convention on Climate Change (UNFCCC) to accelerate ambition through their Nationally Determined Contributions (NDCs) (<a href="http://www.unfccc.int">www.unfccc.int</a>). 



Following increased scientific evidence pointing to fossil fuels as the major driver of climate change, there were increased calls for a global-phase out thereof at the just ended Twenty-Eighth Conference of Parties to the UNFCCC (COP28) held in Dubai, United Arab Emirates. However, most Global South Parties advocate for a gradual ‘phasing down’ (just transition as opposed to an outright ‘phase out’) through the deployment of renewables to replace traditional fossil fuels. 



Developing country Parties argue that the envisaged transition requires decision makers to be mindful of historical disparities, suffered impacts, and varying responsibilities, and to ensure a fair distribution of the efforts and benefits of this transition.



Inevitably, given the complexity of the climate crisis and energy transition nexus, it is necessary to work towards building a shared vision of renewable energy deployment that builds upon exemplary cases, standardizes processes, improves legislation, and proposes instruments that support and ensure local development. Africa and other developing countries dependent on the exploitation of fossil fuels, should therefore:



<ul class="wp-block-list">
<li>Continue to call for the use of these resources using cleaner technologies and for a ‘gradual phase out’ to allow adequate time to adjust social and economic systems and raise concern on double standards by some developed countries that are reverting to fossil fuels in wake of the persisting crisis in Eastern Europe.</li>



<li>Amplify calls for availing of more funding to Global South countries for renewable energy and energy efficiency, as well as for the development of sustainable technologies and sustainable food systems.</li>
</ul>



Evidence shows that Africa has enormous potential for development of renewable energy sources, particularly solar and wind. The continent is endowed with some of the best solar resources in the world, with parts of North Africa receiving an average of over 2 000 hours of sunshine per year. Africa also has excellent wind resources, particularly along its long coastline. In essence, developing renewable energy sources in Africa could help to reduce the continent’s reliance on fossil fuels and reduce GHG emissions as well as creating new opportunities for economic development, job creation and poverty reduction (<a href="http://www.climatechampions.unfccc.int">www.climatechampions.unfccc.int</a>).



Forests of Africa such as the Congo Basin rainforest, the Guinea-Congo forest, the East African Coastal Forest, the Miombo woodlands and the Sudanian Savanna have a significant role in the global carbon cycle (carbon sinks) hence, have potential to play a major role in carbon trading. Despite this huge potential, the current value of carbon trading in Africa is relatively low, contributing a paltry 2% on the global carbon markets of trading taking place mostly in the voluntary carbon market (VCM). 



The African continent is estimated to have potential to reduce emissions by over 2 billion tonnes of carbon dioxide equivalent (CO2e) per year by 2030. By reducing deforestation and forest degradation as well as upscaling sustainable forest management, Africa could generate carbon credits that could be sold on the carbon market. However, the realisation of this potential hinges on a number of factors, including the development of a formal carbon market, enforcement of regulations and the availability of funding as well as the development of renewable energy and other low-carbon technologies (<a href="http://www.carboncredits.com">www.carboncredits.com</a>; <a href="http://www.climatechampions.unfccc.int">www.climatechampions.unfccc.int</a>).



<h2 class="wp-block-heading" id="h-climate-financing-landscape">Climate Financing Landscape</h2>



Global landscape for climate finance estimated that 2021 climate finance flows amounted to US$850-940 billion, while Global Carbon Credit market was valued at US$760 billion (and is expected to grow by over 21% during the period 2023-2028) (Climate Policy Initiative, 2022). The global green bond market issuance reached US$1.2 trillion in the first half of 2023, up from US$1 trillion in the same period in 2022, signifying growing awareness of the need to address climate change (Climate Bonds Initiative, 2023). By implication, the growth in the climate finance landscape, represents a significant increase in the amount of capital raised for green initiatives, which include renewable energy, energy efficiency, sustainable transport, and sustainable water and wastewater management.



Article 2.1 (c) and Article 9 of the Paris Agreement highlight the need for “finance flows consistent with a pathway toward low GHG emissions and climate-resilient development” (<a href="http://www.unfccc.int">www.unfccc.int</a>). At least US$4.35 trillion is required annually by 2030 to meet global climate objectives (Climate Policy Initiative, 2022). Mobilisation of adequate and predictable financial flows persistently presents a major impediment towards attainment of the Paris Agreement targets across most Global South countries; Zimbabwe included. 



While evidence points to a significant increase in climate finance in recent years, it is still far short of the estimated needs and priorities. In 2019, the total climate finance flows to developing countries were around US$70 billion against an estimated annual requirement of US$100-300 billion. The amount of equity financing for climate change in Africa is much lower than in other regions and the International Finance Corporation (IFC, 2018) estimates that this may reach US$2.5 trillion by 2040. 



In addition, the majority of climate finance flows are in the form of loans, rather than grants, which can reinforce debt burdens for developing countries. There is also lack of transparency and accountability in the way climate finance is allocated and disbursed (Brazier, 2017). On the other hand, the current financial architecture and governance arrangements under the Paris Agreement are yet to support countries in averting, minimizing, and addressing climate related loss and damages which are predicted to become more frequent and intense in the coming decades (<a href="http://www.unfccc.int">www.unfccc.int</a>).



<h2 class="wp-block-heading" id="h-green-financing-for-africa">Green Financing for Africa</h2>



Most, if not all, developing country Parties lack adequate financial resources to accelerate their low-carbon and climate-resilient developmental actions. This is mostly due to their low per capita income, unstable economies, constrained fiscal space, lack of institutional capacity and structural weaknesses (<a href="http://www.thecommonwealth.org">www.thecommonwealth.org</a>) which militate against the desired forward thrust towards a resilient and green growth pathway, thus depriving the potential to harness the powerful synergies between adaptation, growth and development. 



The protracted debates around climate financing at the annual COP Meetings under the auspices of the UNFCCC, the non-fulfilment of pledges made by developed country Parties as well as impediments around access to the available climate finance, all point to the dire need for a paradigm shift in approach by spurring proactiveness among developing countries to combat the effects of climate change. This entails leveraging innovative financing instruments to crowd in private climate financing in Africa (blended finance).



Africa’s private investors ought to recognise that climate financing is not only an environmental issue, but is also a developmental issue that embraces economic and social transformation in the quest for sustainable development. Therefore, climate-allied financial instruments guarantee returns on the investor as well as on the continent. 



Green climate financing has been on an upward spiral in Africa in recent years, with the goal of supporting projects that help reduce emissions, increase resilience to climate change, and improve livelihoods e.g. African Development Bank’s Climate Action Plant and the Green Climate Fund (GCF) financed “Accelerating Renewable Energy Integration and Sustainable Energy (AREISE)” project in Kenya. 



The success of Africa’s Green Transition process is anchored on the combined efforts of the public and private sectors, with a strong collaboration with international development partners towards mobilizing the required climate financial resources ensuring that all investments are environmentally sustainable, whilst delivering the desired economic and social benefits for all. Africa requires at least US$52.7 billion annually to advance climate action, yet current annual spending on adaptation is just around US$11.4 billion (GCA, 2022).



An assortment of innovative mechanisms could help increase sustainable green financing in Africa and typical examples include:



<ul class="wp-block-list">
<li>Use of blended finance, which combines public and private financing to support projects that have both social and environmental benefits (GCA, 2022);</li>



<li>Climate bonds, which can be used to finance projects that reduce GHG emissions or increase resilience to climate change. Functioning bond markets, investment funds (green bond funds) can provide a good example of how to draw in institutional investors and such funds should be replicated and scaled up to incentivize issuers to generate a sufficient supply of green assets to finance green projects (<a href="http://www.investopedia.com">www.investopedia.com</a>);</li>



<li>Equity financing, which can be used to fund green initiatives such as renewable energy projects, sustainable agriculture, and energy efficiency improvements. Despite the perceived risks, equity financing has a number of advantages over other types of financing, including lower borrowing costs, more flexibility in terms of repayment and the ability to attract long-term investors.</li>



<li>Establishment of Green banks, which are financial institutions that exclusively invest in green projects; and</li>



<li>Carbon pricing mechanisms (carbon markets), such as emissions trading systems or carbon taxes, could be used to raise revenue for sustainable development. Recent efforts to develop regional carbon markets, such as the African Carbon Markets Initiative (ACMI), could help to address the current challenges bedevilling carbon trading on the African continent. In addition, Africa’s abundant renewable energy resources could make it a net exporter of carbon credits, providing a steady stream of revenue for sustainable development projects. Zimbabwe has made strides in developing a regulatory framework for carbon trading, administered through the Ministry of Environment, Climate and Wildlife, which is beginning to bear fruits as many stakeholders have expressed interest to participate in the carbon markets.</li>
</ul>



In conclusion, sustainable green financing, being a critical component of green industrialisation, therefore presents an opportunity for developing countries to leap frog to higher levels of development through transitioning to low-carbon and resource-efficient economies. By evolving to low-carbon economies, there will be a growing demand for green technologies and services, thus developing countries stand to benefit from this transition by developing new industries and creating new jobs. Green industrialisation can help reduce poverty and inequality by providing access to clean energy, clean water and other basic services in a way enhancing prospects of shaping a world that is sustainable, inclusive and prosperous for all.

Day Two Of The 28th World Economic Forum on Africa

Climate change and financing Africa

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-184386374-820x461.jpg" alt="" class="wp-image-459062" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-184386374-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-184386374-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-184386374-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-184386374-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-184386374-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-184386374-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



Trade ministers from around the world are convening at the end of February in Abu Dhabi for the 13th Ministerial Conference of the World Trade Organization. The event is a biennial opportunity for the WTO’s 164 members to meet at the highest level to review the functioning of the multilateral trading system and decide on its future.



The Ministerial Conference comes at a moment where the global economy is in a fragile state, with the World Bank projecting a decade of historically low growth ahead of just 2% annually. Trade – which has long been a driver of growth and poverty eradication, having helped 1 billion people lift themselves out of destitution in recent decades – is facing strong headwinds as protectionist forces mount. With leaders in many countries questioning the value of participating in a globalized world economy, the growth of geopolitical-driven protectionism threatens to limit the gains of globalization.



Against this backdrop, it is not an overstatement to say the conference in Abu Dhabi will be a critical moment in determining the future of global trade. As countries re-shore and friend-shore their value chains because of legitimate national security concerns, it is essential for ministers to reshape the current global trade system to prevent these trends from resulting in severe fragmentation, which could cost the global economy as much as <a href="https://www.imf.org/en/Blogs/Articles/2023/01/16/Confronting-fragmentation-where-it-matters-most-trade-debt-and-climate-action">7% of GDP</a>, according to the IMF.



WTO Director-General Ngozi Okonjo-Iweala has been acutely aware of the importance of the moment and has <a href="https://www.wto.org/english/news_e/news23_e/dgno_24aug23_e.htm">appealed</a> for the need to “be ready to roll up our sleeves and work in Abu Dhabi&#8221;.



But what would this work need to look like to make a real difference?



On the agenda will be efforts to advance international trade and reform the WTO itself, such as eliminating subsidies that encourage overfishing, extending the moratorium on duties on cross-border e-commerce, and restoring the system for settling trade disputes.



Yet, as important as these issues are, addressing them individually – with success uncertain, given the need for consensus to forge an agreement – may have at best a marginal impact on global trade. The necessary decision to admit two new members, Timor Leste and Comoros, into the WTO also cannot be considered significant progress if important topics are yet again kicked down the road.



Leaders in Abu Dhabi will need to be ambitious and focus on solving the underlying challenges ailing the trade system. They will need to address two factors that have enabled deglobalization to take hold despite the overall benefits trade has delivered over the past three decades: First, that trade is seen as being misaligned with global priorities; and second, that gains from trade have not been equitably distributed within and between countries.



Strengthening the trade system should first and foremost mean expanding the trade agenda beyond delivering efficiencies. Instead, trade needs to advance climate action and social inclusion through multilateral commitments against a “race to the bottom” on environment, labour and consumer standards. Participating in global value chains can help the diffusion of climate-friendly technologies, such as solar panels or drought-resistant seeds. The broader the benefits delivered by trade, the more firmly it will be aligned with global priorities such as the Sustainable Development Goals. This, in turn, will enable trade to engender more trust of governments and citizens as they see the real value of it. Trade can thus be “fenced off” from geopolitical rivalry rather than disrupted for near-term political wins.



Here, inspiration can be taken from the African Continental Free Trade Area Agreement (ACFTA), which aims to create a single market for goods and services on the continent and facilitate the free movement of people. Its Protocol on Investment is designed to support the continent’s green transition by promoting investment in green sectors, encouraging incentives for low-carbon investments, and developing green investment standards.



Secondly, more inclusive trade mechanisms must be developed. <a>In particular, least-developed countries </a>with structural constraints such as fragile institutions, weak markets and a limited knowledge base, face difficulties taking full advantage of the opportunities offered by globalization. Between 2011 and 2020, exports of goods and services from least-developed countries contracted, and their share in global exports <a href="https://www.wto.org/english/news_e/news21_e/ddgag_16nov21_e.htm">stagnated</a>. What little economic growth has taken place has in most cases failed to trickle down to the poor.



More public-private consultations centred on the Global South are needed to ensure that multilateral trade policies prioritize the sustainable development of countries with the least economic power.



Trade-restrictive measures based on legitimate national security concerns is likely to remain a feature of global trade. To improve transparency, certainty and mutual trust, such measures must be ring-fenced, meaning focused, proportionate and time-bound.



The aspiration of an expanded and rebalanced global trade agenda is not something that can be achieved easily in times when trust is being eroded by rising geopolitical rivalry. But if ministers leave Abu Dhabi with little more than symbolic achievements, an opportunity will have been lost to strengthen a system of economic interdependence that has delivered immense, albeit imperfect, benefits. The alternative – a more fragmented, protectionist global economy – will make everyone worse off and will be a missed opportunity to strengthen collective action on the very environmental, economic and societal issues most countries care about.



Nicolai Ruge is Lead, Geopolitics and Trade, at the World Economic Forum. This piece draws on the Forum’s report <a href="https://www.weforum.org/publications/shaping-cooperation-in-a-fragmenting-world/">Shaping Cooperation in a Fragmenting World</a>.



Danny Quah is Dean and Li Ka Shing Professor in Economics, Lee Kuan Yew School of Public Policy, National University of Singapore

Global Connections China

Shifting the course of Global Trade at 13th Ministerial Conference

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="663" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/EM-photo1-1-820x663.jpg" alt="" class="wp-image-458475" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/EM-photo1-1-820x663.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/EM-photo1-1-300x243.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/EM-photo1-1-111x90.jpg 111w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/EM-photo1-1-768x621.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/EM-photo1-1-1536x1242.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/EM-photo1-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Elna Moolman, Head: SA macroeconomic research at Standard Bank South Africa</figcaption></figure>



The national budget indeed favoured fiscal continuity and consolidation (over any pre-election populist decisions), as anticipated, and in contrast with the consensus forecasts for sustained and significant fiscal deterioration.



Government intends to make a larger, immediate withdrawal from the gold and foreign exchange contingency reserve account (GFECRA) than generally expected. This is essentially the unrealised profits on SA’s gold and foreign exchange reserves, typically from rand depreciation over time. It plans to use R100 billion from the GFECRA in FY24/25, and R25 billion in each of FY25/26 and FY26/27.



This is reducing government’s borrowing requirement and therefore its debt burden. However, it was disappointing that only guiding principles on how the funds will be used were provided in the Budget, with (only) an undertaking that it will eventually be “formalised through legislation”. The guiding principles in the Budget are pragmatic, but we would’ve preferred the GFECRA only being used once its use is legislated, to ensure that future use will remain prudent.



Nevertheless, despite this disappointment (of using GFECRA before its longer-term use has been legislated) and persistent risks (to both the near-term and medium-term spending and revenue forecasts), the fiscal prognosis is at least somewhat better than investors expected. The Budget confirms government’s commitment to fiscal consolidation. Therefore, financial markets are likely to react positively to the Budget. While there might be a strong initial response to better-than-expected fiscal and funding metrics, this may partly unwind as investor concern about the aforementioned factors (upside spending risks and downside revenue risks) persists.

EM photo1 1

Fiscal discipline, R150bn windfall to reduce SA’s debt burden

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/NER_20190729_WFP-Simon_Pierre_Diouf_7227-820x547.jpg" alt="" class="wp-image-457759" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/NER_20190729_WFP-Simon_Pierre_Diouf_7227-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/NER_20190729_WFP-Simon_Pierre_Diouf_7227-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/NER_20190729_WFP-Simon_Pierre_Diouf_7227-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/NER_20190729_WFP-Simon_Pierre_Diouf_7227-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/NER_20190729_WFP-Simon_Pierre_Diouf_7227-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/NER_20190729_WFP-Simon_Pierre_Diouf_7227-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo credit: WFP/Simon Pierre Diouf</figcaption></figure>



Nearly ten years after Africa’s leaders&nbsp;<a href="https://au.int/sites/default/files/documents/31247-doc-malabo_declaration_2014_11_26.pdf" target="_blank" rel="noreferrer noopener">reiterated</a>&nbsp;their “resolve to ending hunger and improving nutrition,” there is still much to be done in the fight against an unprecedented continental&nbsp;<a href="https://www.redcross.org.uk/stories/disasters-and-emergencies/world/africa-hunger-crisis-100-million-struggling-to-eat" target="_blank" rel="noreferrer noopener">food crisis</a>.



The meeting of our leaders in Addis Ababa at the&nbsp;<a href="https://au.int/en/summit/37" target="_blank" rel="noreferrer noopener">African Union Summit</a>&nbsp;this month, therefore, takes place against dire, if not entirely unprecedented, circumstances.



For instance, my own country of Sierra Leone is among the most exposed to the escalating impacts of climate change. These changes in the climate – from unpredictable rainfall to rising temperatures – disrupt agricultural yields and food systems at large.



These challenges arise at a critical time when&nbsp;<a href="https://docs.wfp.org/api/documents/WFP-0000153832/download/?_ga=2.1752049.1771678112.1707288571-434489079.1701945362" target="_blank" rel="noreferrer noopener">over 50 percent of the households</a>&nbsp;in Sierra Leone are grappling with food insecurity, making them highly susceptible to any additional disturbances in food supply chains. Concurrently, the depreciation of our currency has amplified our national debt, constraining the government&#8217;s financial capacity to invest in effective solutions to address these challenges.



Despite the hurdles, and by harnessing Africa’s new membership in the G20, our leaders can turn commitments into action, by removing global structural barriers hindering the fight against hunger and by transforming food systems across the continent.



To begin with, this means delivering on existing plans drawn up by continental leaders to tackle hunger and malnutrition challenges.



Agreements such as the 2014&nbsp;<a href="https://www.resakss.org/sites/default/files/Malabo%20Declaration%20on%20Agriculture_2014_11%2026-.pdf" target="_blank" rel="noreferrer noopener">Malabo Declaration</a>&nbsp;and the Comprehensive African Agricultural Development Programme (CAADP), the&nbsp;<a href="https://www.afdb.org/sites/default/files/2023/09/08/the_african_leaders_nairobi_declaration_on_climate_change-rev-eng.pdf" target="_blank" rel="noreferrer noopener">Nairobi Declaration</a>&nbsp;proposed at the 2023 Africa Climate Summit, and the&nbsp;<a href="https://www.afdb.org/sites/default/files/2023/01/27/dakar_ii_declaration_food_sovereignty_and_resilience_.pdf" target="_blank" rel="noreferrer noopener">Dakar Declaration</a>&nbsp;agreed last year, demonstrate Africa’s strong legacy in building frameworks to address hunger and malnutrition. However, the actual implementation of these plans has frequently fallen short of expectations, highlighting a critical gap between ambitious policy formulation and effective action.



In light of this, African governments must allocate 10 percent of their budgets to agriculture and development to fulfill their commitment made under the CAADP to revive agricultural growth and address mounting food insecurity challenges, particularly amid changing climate conditions.



Africa&#8217;s small-scale farmers, despite being so vulnerable to climate-related risks, hold immense potential in feeding a growing population. Roughly 33 million smallholder farms contribute up to&nbsp;<a href="https://www.ifad.org/thefieldreport/#:~:text=In%20Africa%2C%20there%20are%20an,food%20production%20and%20reduce%20poverty" target="_blank" rel="noreferrer noopener">70 percent</a>&nbsp;of the continent’s food supply yet receive just a fraction of the finance needed to adapt to a changing climate. Hence, funding should ensure that they are not left behind in addressing the escalating issue of hunger on the continent.



And while 10 percent seems a large figure, the ripple effects of such an investment would extend far beyond merely combating hunger and malnutrition. Better nutrition is essential for improving access to and the quality of education, which is the focus of this month’s AU meetings. By addressing hunger, Africa can improve education for our next generation, while providing a viable pathway to lift communities out of poverty.



Secondly, Africa’s leaders must actively seek much-needed global collaboration to address food insecurity while securing relief from mounting debt burdens.



Having&nbsp;<a href="https://www.weforum.org/agenda/2023/09/african-union-g20-world-leaders/" target="_blank" rel="noreferrer noopener">permanently joined</a>&nbsp;the G20, the African Union must capitalize on this year’s meetings to drive concerted global efforts to address hunger, particularly by relieving the continent’s pressing debt burden to redirect funds towards urgent humanitarian needs and to make investments to boost sustainable economic growth.



President Lula of Brazil, who assumed the presidency of the G20 for this year, is a noted ally in the fight against hunger. Recognized for his efforts with the World Food Prize in&nbsp;<a href="https://www.reuters.com/article/idUSJOE75L050/" target="_blank" rel="noreferrer noopener">2011</a>,&nbsp;he has already expressed his commitment to establishing an Alliance against poverty and hunger. This is welcomed &#8211; we urgently need a consolidated global effort &#8211; a ‘plan’ to drive the fight to end hunger for good.



Africa’s hunger levels are also inextricably linked to a deteriorating fiscal landscape. In Sierra Leone, consumer inflation stands at&nbsp;<a href="https://www.imf.org/external/datamapper/PCPIEPCH@WEO/SLE?zoom=SLE&amp;highlight=SLE" target="_blank" rel="noreferrer noopener">more than 20 percent</a>, while government debt is&nbsp;<a href="https://www.imf.org/external/datamapper/GGXWDG_NGDP@WEO/SLE?zoom=SLE&amp;highlight=SLE" target="_blank" rel="noreferrer noopener">more than 80 percent</a>&nbsp;of our country’s GDP, vastly limiting the ability of citizens and the government to navigate the unprecedented food crisis.



African leaders must therefore use the AU Summit to set the tone for the rest of the year, placing the global food crisis at the top of their international agenda. This also includes this year’s COP29 climate talks, given that 17 out&nbsp;<a href="https://www.uneca.org/stories/17-out-of-the-20-countries-most-threatened-by-climate-change-are-in-africa%2C-but-there-are#:~:text=According%20to%20the%20latest%20report,health%2C%20productivity%20and%20food%20security." target="_blank" rel="noreferrer noopener">of the 20</a>&nbsp;countries most threatened by climate change are in Africa and considering the impact of climate change on food systems and nutrition.



Thirdly, in moving to tackle food insecurity across the continent, Africa’s leaders must adopt a holistic, “all of government” approach if we are to make progress by the end of the decade.



Our food systems present a complex web of challenges: in addition to being a source of nutrition and livelihoods, food production is a primary source of environmental destruction, causing up to&nbsp;<a href="https://www.fao.org/newsroom/detail/cop26-agricultural-expansion-drives-almost-90-percent-of-global-deforestation/en" target="_blank" rel="noreferrer noopener">90 percent</a>&nbsp;of deforestation and around a&nbsp;<a href="https://ourworldindata.org/food-ghg-emissions" target="_blank" rel="noreferrer noopener">quarter</a>&nbsp;of greenhouse gas (GHG) emissions globally.



To balance the trade-offs between boosting productivity and preserving the environment, governments must adopt a holistic approach, recognizing the impact of food systems transformation beyond hunger levels alone. In Sierra Leone, the Presidential Council led by H.E President Bio brings together government officials, farmers, researchers, and civil society members, and serves as a pivotal platform for navigating the complex trade-offs in the battle to end hunger.



Africa&#8217;s leaders have laid down a substantial framework over recent decades for addressing hunger and malnutrition on the continent. Now, given that a third of the world’s youth will be African by 2050, they must build on this legacy with bold action to save lives now, build resilience and secure a prosperous and sustainable future for the upcoming generations.

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