<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="553" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/07/GettyImages-1472975746-820x553.jpg" alt="" class="wp-image-426466" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/07/GettyImages-1472975746-820x553.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/07/GettyImages-1472975746-300x202.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/07/GettyImages-1472975746-134x90.jpg 134w, https://cms.cnbcafrica.com/wp-content/uploads/2023/07/GettyImages-1472975746-768x518.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/07/GettyImages-1472975746-1536x1035.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/07/GettyImages-1472975746-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">NAIROBI, KENYA &#8211; MARCH 12: The Prime Cabinet Secretary, Hon Musalia Mudavadi after the final round of the Magical Kenya Open Presented by Absa at Muthaiga Golf Club on March 12, 2023 in Kenya. (Photo by Stuart Franklin/Getty Images)</figcaption></figure>



The Ministry of Environment and Forestry has been directed to intensify protection and rehabilitation of the country’s water towers.



Prime Cabinet Secretary, Musalia Mudavadi said serious intermediate remedial action should be directed to protect the increasingly vulnerable Government’s gazetted forests.



He also said the Kenya Water Towers policy and bill are being drafted to protect among other issues, protect forests.



“We have to align our policies to ensure that we consistently conserve, protect and sustainably manage our environment. Making investments today that will protect us and the generations to come in the future.” he stated.



“I impress on you to hasten and intensify protection, reforestation and rehabilitation of Kenya’s water towers. Sometimes, we mistake tree cover where we have achieved 12.1 per cent of the 30 per cent target with forest cover,” Mudavadi said on Thursday when he launched the Ministry’s Strategic Plan 2023-27 in Nairobi.



Statistics that show Kenya&#8217;s forests are fragmented across the country and combined, forests cover over 37 million hectares.



Out of those 37 million hectares, 2.1 million are woodlands, 24.8 million are bush lands and 10.7 million are wooded grasslands.



“We are at a meager 9 per cent forest cover, purely out of neglect and destruction. It is commendable what we have done to protect the Mt Kenya Water Towers. The annual community rehabilitation of Kaptagat Forest also requires emulating,” he said.



“The Kenya Kwanza directive on achieving at least 15 billion trees to have been planted by the year 2032 should remind us of an obligation that we have to undertake seriously as a country to ensure we are key players in the fight against climate change.” he added.



Similarly, he pointed out the need to accelerate the protection of the Mau Water Tower.



In Kakamega, the only existing tropical rainforest is under encroachment threat, the Tsave Tsavo Ecosystem Restoration Initiative in Taita/Taveta County needs support and the Maragoli Hills Forest now stripped bare of tree cover, requires urgent reforestation.



Mudavadi said these areas require fencing and security by enough wardens to protect these forest areas against human activity.



“I have been approached by these counties to patronize these mitigation activities through planned Marathons to fund afforestation. I ask for your support,” he said.



According to Mudavadi, Kenya is buffeted by climate change and has just been through a worst drought in 40 years.



As a nation highly dependent on agriculture and tourism, he noted that climate change is a priority and the country cannot turn its back on this, adding that adaptation and mitigation measures required, including early warning mechanisms are not cheap.



This, however, he said does not mean Kenyans should fold their hands and hope for the best.



“We must soil our hands today, to prevent catastrophes tomorrow. This is why I am impressed by details on intervention measures in your strategic plan, under the topic on Climate Change Adaptation and Mitigation Key Result Area,” he explained.



As he launched the Plan, Mudavadi insisted that it is not only a results-based management tool but also an instrument with which the public service will use to account for its existence.



Mudavadi warned that gone are the days when the only delivery accounting tool was to report to work and leave at own pleasure.



He said there are no longer shortcuts to efficient and effective public service delivery that Government is committed to.



“Today, as long as you remain in the public service, make strategic plans, service delivery standards, citizen service delivery charters, annual work plans, performance contracts and staff performance appraisal, part of your second nature,” he said.



As far as performance management, which falls under his office is concerned, Mudavadi said he ‘does not intend to take prisoners on this’.



He said strategic plans are not just ornamental documents, even as he warned that organizations will be judged on their suitability to remain relevant by cascading the Plans to their signed performance contract, annual work plans and to whether or not they attained individual targets set out.



“Least I am misunderstood, such an exercise will carry no favour, ill-will or vendetta. We will use your own commitments to judge your relevance because the Government has made promises to Kenyans under the Bottom-Up Economic Transformation Agenda (BeTA), that must be fulfilled. If you are not ready to better the lives of Kenyans, we will not retain you against your will,” he affirmed.



On job creation, he said the Ministry has recruited the first 2,700 forest rangers and is about to recruit a Green Army of 4000.



Under the Ministry’s stewardship, Mudavadi said the 15-billion national tree cover campaign will also directly contribute to job creation when youth and women groups grow and sell seedlings for the greening campaign; and in the long-term, provide nutrition and timber products.



“I trust that it will help us create jobs during the reduction, reuse and recycling of waste, apart from providing a clean and healthy environment as anticipated by the Constitution.”

Magical Kenya Open Presented by Absa – Day Four

We must blend and work towards bringing nature back to its course: Mudavadi

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246271238-820x547.jpg" alt="" class="wp-image-422455" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246271238-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246271238-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246271238-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246271238-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246271238-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246271238-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The logo the World Economic Forum (WEF) inside the Congress Centre in Davos, Switzerland, on Monday, Jan. 16, 2023. The annual Davos gathering of political leaders, top executives and celebrities runs from January 16 to 20. Photographer: Stefan Wermuth/Bloomberg via Getty Images</figcaption></figure>



Geneva, Switzerland, 27 July 2023 – With the world facing growing economic instability and political tensions, volatility in geoeconomic and geopolitical relations between major economies are likely to result in global upheavals over the next six months, according to a new survey of the World Economic Forum’s Chief Risks Officers (CRO) community.



The community comprises 40 risk professionals from a wide range of multinational companies, covering technology, financial services, healthcare, professional services and industrial manufacturing. Respondents to the survey identified macroeconomic indicators, pricing and supply disruptions of key raw materials, armed conflicts and regulatory changes as top concerns for organizations.



“CROs are facing a multitude of pressing concerns as they look to the remainder of 2023,” said Ellissa Cavaciuti-Wishart, Head of Global Risks Initiative, World Economic Forum. “Whilst continuing to grapple with rising costs and supply disruptions, organizations are increasingly faced with a number of ethical and societal risks, which are far more complex to navigate than regulatory compliance alone.”



More than 85% of CROs expect some level of continued volatility and economic and financial conditions within and across major economies.



Recent months have also seen a sharp increase in discussion of technology-related risks. CROs broadly agree that risk management is not keeping up with the rapid development and deployment of AI technologies, with 75% saying the use of AI technologies poses reputational risks to their organizations and 90% calling for an acceleration of regulation. Almost half of respondents agree with slowing or pausing development of these technologies until the associated risks are better understood.

Preparations Ahead of The World Economic Forum (WEF) 2023

Macroeconomic and Geopolitical Conditions Pose Severe Risks to Organizations, say Chief Risk Officers

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="555" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-820x555.jpg" alt="" class="wp-image-420644" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-820x555.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-300x203.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-133x90.jpg 133w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-768x519.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-1536x1039.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Representations of cryptocurrencies are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration</figcaption></figure>



The global push for clearer policies on crypto assets has gained momentum under the Indian G20 Presidency. As this work continues, it’s important to recognize the progress already achieved, but more is needed, especially in implementing global standards.



Last year’s failures of the FTX crypto trading platform and the&nbsp;<a href="https://www.imf.org/en/Publications/fandd/issues/2022/09/Basics-Crypto-conservative-coins-Bains-Singh?utm_medium=email&amp;utm_source=govdelivery">Terra Luna</a>&nbsp;stablecoin highlighted the urgency of establishing clear policies to protect investors and prevent abuse. Despite recent industry challenges, investor optimism continues to revive periodically, as evidenced by Bitcoin’s near doubling this year. Without robust safeguards, the increased risk of fraud and misconduct could adversely impact investors&#8217; expected returns.



While some policymakers have taken necessary steps&nbsp;to safeguard consumers and ensure financial integrity, it is equally important to consider the broader implications of crypto. Such assets, particularly stablecoins denominated in hard currencies, could potentially replace official currencies, and significantly impact countries&#8217; monetary and fiscal policies. This is especially true in emerging markets and developing economies, underscoring the need for a comprehensive, consistent, and coordinated policy approach to crypto.



That’s why we presented an assessment of the&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?data=05%7C01%7CSALAVI%40imf.org%7C280a4b32bfa040303e9808db86d98d2c%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C638252041153362210%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;reserved=0&amp;sdata=tGUUGf9u7GSsfFnk9IbHoS1HL916kAYhXB29AWl%2BsPs%3D&amp;url=https%3A%2F%2Fwww.google.com%2Furl%3Fcd%3D%26esrc%3Ds%26q%3D%26rct%3Dj%26sa%3Dt%26source%3Dweb%26url%3Dhttps%253A%252F%252Fwww.imf.org%252F-%252Fmedia%252FFiles%252FResearch%252Fimf-and-g20%252F2023%252Fg20-report-macrofinancial-implications-crypto-assets-february23.ashx%253Futm_medium%253Demail%2526utm_source%253Dgovdelivery%26usg%3DAOvVaw2CK2pwmO2KOh17beiiZ9f2%26utm_medium%3Demail%26utm_source%3Dgovdelivery%26ved%3D2ahUKEwjBv5_689v-AhWsFlkFHUc-BkUQFnoECB0QAQ&amp;utm_medium=email&amp;utm_source=govdelivery">macro implications</a>&nbsp;of crypto assets to the G20 presidency earlier this year, building on recommendations outlined in the&nbsp;<a href="https://www.imf.org/en/Publications/Policy-Papers/Issues/2023/02/23/Elements-of-Effective-Policies-for-Crypto-Assets-530092?utm_medium=email&amp;utm_source=govdelivery">Elements of Effective Policies for Crypto Assets</a>&nbsp;endorsed by the IMF Executive Board in February.



Our approach features three key pillars: a sound macro-policy foundation, clear legal treatment and granular rules, and effective implementation.



These are our key policy recommendations:



<ul class="wp-block-list">
<li>The defense against the substitution of sovereign currencies is the maintenance of robust, trusted, and credible domestic institutions. Transparent, consistent, and coherent monetary policy frameworks are crucial for an effective response to the challenges posed by crypto assets.</li>



<li>To protect national sovereignty, it is important not to grant crypto assets official currency or&nbsp;<a href="https://www.imf.org/en/Blogs/Articles/2021/07/26/blog-cryptoassets-as-national-currency-a-step-too-far?utm_medium=email&amp;utm_source=govdelivery">legal tender status</a>. Doing so would require accepting them in many jurisdictions for tax payments, fines, and debt settlements, and could generate fiscal risks for government finances, and could threaten financial stability or rapid inflation.</li>



<li>To address the&nbsp;<a href="https://www.imf.org/en/Publications/fintech-notes/Issues/2022/05/09/Capital-Flow-Management-Measures-in-the-Digital-Age-516671?utm_medium=email&amp;utm_source=govdelivery">volatility of capital flows</a>&nbsp;associated with crypto, policymakers should integrate them within existing regimes and rules that manage capital flows. This will help ensure stability and minimize potential disruptions.</li>



<li>Finally,&nbsp;<a href="https://www.imf.org/en/Blogs/Articles/2023/07/05/crypto-poses-significant-tax-problems-and-they-could-get-worse?utm_medium=email&amp;utm_source=govdelivery">tax policies</a>&nbsp;should ensure unambiguous treatment of crypto assets, and administrators should strengthen compliance efforts. Specific regulations are needed to clarify the tax treatment of crypto, including value-added taxes or levies on income or wealth.</li>
</ul>


<div class="wp-block-image">
<figure class="aligncenter"><a href="https://www.imf.org/en/Blogs/Articles/2023/07/18/crypto-needs-comprehensive-policies-to-protect-economies-and-investors?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2023/07/7923436/4861112/crypto-collapse-chart_crop.jpg" alt="crypto collapse chart"/></a></figure></div>


Clear legal treatment



Building on a sound macro-policy foundation, clear legal treatment and granular rules are crucial. The principle of &#8220;same activity, same risk, same regulations&#8221; should guide regulatory efforts.



Consistent with the&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?data=05%7C01%7CSALAVI%40imf.org%7C280a4b32bfa040303e9808db86d98d2c%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C638252041153362210%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;reserved=0&amp;sdata=OnwDzum2kUR9nKk6fgx4OL2sEHl1n1zIfHsh7uFWZ48%3D&amp;url=https%3A%2F%2Fwww.fsb.org%2F2022%2F10%2Fregulation-supervision-and-oversight-of-crypto-asset-activities-and-markets-consultative-report%2F%3Futm_medium%3Demail%26utm_source%3Dgovdelivery&amp;utm_medium=email&amp;utm_source=govdelivery">recommendations</a>&nbsp;by standard setters such as the&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?data=05%7C01%7CSALAVI%40imf.org%7C280a4b32bfa040303e9808db86d98d2c%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C638252041153362210%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;reserved=0&amp;sdata=nzZgEbrf0UmRQb8moCJ8dEqPyh3AXACzcPXkxI1AThU%3D&amp;url=https%3A%2F%2Fwww.bis.org%2Fbcbs%2Fpubl%2Fd545.pdf%3Futm_medium%3Demail%26utm_source%3Dgovdelivery&amp;utm_medium=email&amp;utm_source=govdelivery">Basel Committee on Banking Supervision</a>,&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?data=05%7C01%7CSALAVI%40imf.org%7C280a4b32bfa040303e9808db86d98d2c%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C638252041153362210%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;reserved=0&amp;sdata=1Zqb0si3cJWwiWhtcFUrKQW6CrbEulHk5VPGTlgDNl4%3D&amp;url=https%3A%2F%2Fwww.fatf-gafi.org%2Fen%2Fpublications%2FFatfrecommendations%2FGuidance-rba-virtual-assets-2021.html%3Futm_medium%3Demail%26utm_source%3Dgovdelivery&amp;utm_medium=email&amp;utm_source=govdelivery">Financial Action Task Force</a>,&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?data=05%7C01%7CSALAVI%40imf.org%7C280a4b32bfa040303e9808db86d98d2c%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C638252041153362210%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;reserved=0&amp;sdata=2Rhiz6opEc2KYXst4EonroXwKF6CE34HhaVoSJaGw8g%3D&amp;url=https%3A%2F%2Fwww.fsb.org%2Fwork-of-the-fsb%2Ffinancial-innovation-and-structural-change%2Fcrypto-assets-and-global-stablecoins%2F%3Futm_medium%3Demail%26utm_source%3Dgovdelivery&amp;utm_medium=email&amp;utm_source=govdelivery">Financial Stability Board</a>, and the&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?data=05%7C01%7CSALAVI%40imf.org%7C280a4b32bfa040303e9808db86d98d2c%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C638252041153362210%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;reserved=0&amp;sdata=l0Mqawu9UQcQCSsq%2BAxAW38d04z7tjqpLQFVD7VTuRg%3D&amp;url=https%3A%2F%2Fwww.iosco.org%2Flibrary%2Fpubdocs%2Fpdf%2FIOSCOPD734.pdf%3Futm_medium%3Demail%26utm_source%3Dgovdelivery&amp;utm_medium=email&amp;utm_source=govdelivery">International Organization of Securities Commissions</a>, our recommendations are:



<ul class="wp-block-list">
<li>A comprehensive legal foundation is essential to effectively regulate crypto, addressing both private law and financial law aspects. This includes ensuring predictability and enforceability of rights while appropriately classifying crypto.</li>



<li>Strong anti-money laundering and combating the financing of terrorism (<a href="https://www.imf.org/en/Publications/fintech-notes/Issues/2021/10/14/Virtual-Assets-and-Anti-Money-Laundering-and-Combating-the-Financing-of-Terrorism-1-463654?utm_medium=email&amp;utm_source=govdelivery">AML/CFT</a>),&nbsp;<a href="https://www.imf.org/en/Publications/fintech-notes/Issues/2022/09/26/Regulating-the-Crypto-Ecosystem-The-Case-of-Stablecoins-and-Arrangements-523724?utm_medium=email&amp;utm_source=govdelivery">prudential</a>&nbsp;and&nbsp;<a href="https://www.imf.org/en/Publications/fintech-notes/Issues/2022/09/26/Regulating-the-Crypto-Ecosystem-The-Case-of-Unbacked-Crypto-Assets-523715?utm_medium=email&amp;utm_source=govdelivery">conduct rules</a>&nbsp;should be implemented to cover all entities and activities related to the issuance, trading, custody, or transfer of crypto.</li>



<li>For systemic stablecoin arrangements, additional requirements such as the&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?data=05%7C01%7CSALAVI%40imf.org%7C280a4b32bfa040303e9808db86d98d2c%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C638252041153362210%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;reserved=0&amp;sdata=UHof4GwT6IwwTklRRlcQBhITPfXe39s%2B3FESX9y7FrI%3D&amp;url=https%3A%2F%2Fwww.bis.org%2Fcpmi%2Fpubl%2Fd101.htm%3Futm_medium%3Demail%26utm_source%3Dgovdelivery&amp;utm_medium=email&amp;utm_source=govdelivery">Principles for Financial Market Infrastructures</a>—standards that aim to ensure the safety, efficiency, and resilience of FMIs—should be applied.</li>
</ul>



Significantly, the FSB in July established a set of high-level&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?data=05%7C01%7CSALAVI%40imf.org%7C280a4b32bfa040303e9808db86d98d2c%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C638252041153362210%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;reserved=0&amp;sdata=gHJjc6QtTMs2A6Z8AXr0Rq4pEJpkNr2woqzf%2BhmZILg%3D&amp;url=https%3A%2F%2Fwww.fsb.org%2F2023%2F07%2Ffsb-chair-outlines-work-on-recent-banking-turmoil-and-to-finalise-crypto-asset-recommendations%2F%3Futm_medium%3Demail%26utm_source%3Dgovdelivery&amp;utm_medium=email&amp;utm_source=govdelivery">recommendations</a>&nbsp;for crypto regulation, focusing on financial stability. They include ensuring authorities’ regulatory powers and sound governance and risk management practices by providers. It also features revised high-level recommendations for effectively addressing financial stability risks associated with &#8220;global stablecoin&#8221; arrangements.



Overall, the recommendations promote the consistency and comprehensiveness of regulatory, supervisory and oversight approaches to crypto.



Effective implementation



Finally, ensuring effective policies requires several measures including strong coordination, at the domestic and international level:



<ul class="wp-block-list">
<li>National authorities must align their frameworks to the emerging guidelines, and standards being developed by standard setting bodies. This alignment is critical to achieve consistent treatment of crypto assets and may require legislative changes.</li>



<li>Developing strong supervisory capacity is vital for monitoring and enforcing rules effectively. Authorities must have the necessary skills and resources to oversee the evolving crypto asset landscape.</li>



<li>Given the borderless nature of the crypto-assets ecosystem, international collaboration and information sharing are crucial. Cooperation among supervisors and competent authorities will enable the monitoring of crypto asset service providers and maintain the efficacy of regulatory policies.</li>



<li>Going beyond crypto polices,&nbsp;public authorities should take advantage in the progress in digital technology to enhance public policy objectives and must actively collaborate to address ongoing cost, trust, and speed issues, particularly for cross-border payments. New multilateral platforms could&nbsp;<a href="https://www.imf.org/en/Publications/fintech-notes/Issues/2023/03/03/Trust-Bridges-and-Money-Flows-A-Digital-Marketplace-to-Improve-Cross-Border-Payments-528038?utm_medium=email&amp;utm_source=govdelivery">improve&nbsp;</a>the efficiency of transactions.</li>
</ul>



The IMF will continue to support the G20 by delivering to the Leaders’ Summit in September a joint IMF-FSB synthesis paper highlighting the building blocks for effective crypto policies. In addition, we are committed to providing tailored capacity building to our 190 members based on the above recommendations and emerging guidelines from standard setters. Our surveillance program will also assess the effectiveness of policy frameworks including crypto.



By embracing a comprehensive approach and implementing these recommendations, policymakers can safeguard monetary sovereignty, protect investor interests, and promote financial stability in the digital age.

107105674-1660812664654-gettyimages-1292707878-yn_crypto_ethereum_002

Crypto Needs Comprehensive Policies to Protect Economies and Investors

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="513" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/DSC08941-1-820x513.jpg" alt="" class="wp-image-425845" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/DSC08941-1-820x513.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/DSC08941-1-300x188.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/DSC08941-1-144x90.jpg 144w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/DSC08941-1-768x480.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/DSC08941-1.jpg 1000w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



The past six years as Director of the Royal African Society have been fascinating and richly rewarding, not just in terms of Britain’s relations with Africa, but in the relations of Africans – and all people of African heritage – with Britain. Britain itself has changed, and they are central to that change.



It has not been an easy time: Brexit, Black Lives Matter, Covid, and the Ukraine war have all impacted on our work, as has the real and accelerating impact of climate change in Africa.&nbsp; As a Society, we have addressed and adapted to these changes, both in policy and personal ways.&nbsp; We work more flexibly; we’ve devoted more time and effort to fund-raising to ensure we can continue to pursue our objective of making African voices heard; we’ve held conferences and debates on the major issues, and we’ve mobilised Parliament to ensure Africa is not neglected by government, is more accurately portrayed to children in school, and to ensure Africans have fairer access through visas to visit this country.



Africa itself is changing, faster than any other continent on the planet.&nbsp; Its astonishing demographic growth – one of the fastest and most sustained in human history, by almost 10 times since 1900 (from 140 million to nearly 1.3 billion) – has been accompanied by economic growth that has significantly reduced poverty, but not yet brought the affluence to which many Africans aspire – at least, not for most.&nbsp; The combined impacts of Covid, climate and conflict are now driving the process into reverse in some places, increasing poverty and depopulating areas as people flee for their lives from flood, famine or fighting.



This increased competition for scarce resources – fertile land, forests, minerals and money – exacerbates the unequal distribution of resources resulting from the imbalance of political power, often in the form of corruption. &nbsp;People take the money because they can, because political accountability and the rule of law are weak. This itself then further undermines the political processes and governance structures needed to ensure that&nbsp;all&nbsp;citizens, not just a few, benefit from a state’s revenues and assets.



Since independence, nationalism and development have been the twin ideological pillars of most African governments. Both are eroding. Jihadism and ethnic fragmentation give the disadvantaged a dream of better, easier access to the resources they lack, while in reality undermining the stability and transnational cooperation needed to accelerate investment and growth to the benefit of all.&nbsp; Yet, as&nbsp;<a href="chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https:/www.afrobarometer.org/wp-content/uploads/migrated/files/publications/Policy%20papers/ab_r7_policypaperno54_africans_views_of_democracy1.pdf">Afrobarometer</a>&nbsp;has shown, African citizens are looking for more accountability from their governments, for more democracy, not less.&nbsp; This can have a good outcome if governments listen.&nbsp; But if they turn a deaf ear, grievances mount and can turn into outright conflict, compounding the cycle of inequality and suffering – exactly as we have seen in Sudan.



At the same time, I have never seen such a flowering of creativity out of Africa as in the past decade, at least not since the 1960s.&nbsp; In the creative arts, in the creative economy and in high tech, fintech and low-cost, high-impact people-tech, Africa is leading the world, with a growing influence across the globe.&nbsp; This is why we focussed the Society’s 120th&nbsp;anniversary last year on ‘Creative Africa’. &nbsp;There is therefore still hope in Africa, amongst its youth and its growing diaspora, that things can and will get better.



And what about Britain?



In many ways it’s been a bad time.&nbsp; Brexit and the savage cuts to the aid programme – presented by now-disgraced Prime Minister Johnson in a way that added insult to injury – severely diminished Britain’s standing in Africa. Britain has been fading from view, supplanted by the US, EU, China, the Gulf states, even by Russia as an influence on the continent.&nbsp; It alienated those who still wanted to visit Britain through its vicious and arbitrary visa policy.&nbsp; This is the government’s fault.&nbsp; They have neglected Africa, and Africans have noticed.



This is serious strategic mistake.&nbsp; If the global weight of Africa’s economy remains small, its influence, through its diaspora, and its importance in a world of geostrategic competition between China and the US-Europe, has grown. The most recent iteration of Conservative government under Rishi Sunak, with James Cleverly the first foreign secretary of African heritage, seems to recognise this and has started to remedy past neglect.



But it needs a change of mindset not just of action.&nbsp; The planned ‘UK-Africa Investment Summit’ in April 2024 is old-style diplomacy: ‘come to us and we’ll both make money’.&nbsp; President Macron (despite, or perhaps because of, France’s current unpopularity in Africa) and the Biden Administration in the US have both moved beyond this, Macron hosting the climate finance summit in Paris this month which directly addresses Africa’s own priorities, and opening up, rather than trying to shut down, the debate about restitution of cultural property.&nbsp; The US’s new&nbsp;<a href="chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https:/www.whitehouse.gov/wp-content/uploads/2022/08/U.S.-Strategy-Toward-Sub-Saharan-Africa-FINAL.pdf">Africa Strategy</a>&nbsp;is a model the UK could sensibly follow.



Nevertheless, at the level of ordinary people, UK-Africa links are growing ever stronger.&nbsp; People of African heritage in Britain, now numbering nearly three million, are a growing influence – socially, culturally, economically and, gradually, politically.&nbsp; Through the impact of Windrush, the Black Lives Matter movement, the demands for restitution and reparations, the reality is beginning to sink in that people of African heritage are now an integral part of what Britain itself is, and their views count. Like the south Asian community, they have changed Britain, through their culture, their cooking, their talents and their contribution to health, society and economy.&nbsp; That needs to be recognised.



Interestingly, the monarchy seems to understand this better than the government. In launching a study of the Royal role in British colonialism, and in reaching out proactively to African communities, they are seeking to listen and learn, understand, not gloss over, the mistakes of the past and chart a better way forward.



The Royal African Society has an important role to play in that journey. The Society has always been a meeting place, where all can engage, listen and understand, speak and be heard.&nbsp; Its origins as a learned society, as a place of debate, as a platform for African voices, is more important than ever – because Africa is no longer just ‘over there’ but right here, right now, a central part of the Britain we all live in.



I am sad to leave, even if not leaving very far (to SOAS University of London).&nbsp;&nbsp; But the RAS will go on, building on the foundations we have laid, so that African voices are heard louder and clearer than ever, in Britain and across the world.



Nick Westcott is the (outgoing) director of the Royal African Society.

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Africa: Six years of change

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Mirek-Dusek-820x547.jpg" alt="" class="wp-image-425782" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Mirek-Dusek-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Mirek-Dusek-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Mirek-Dusek-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Mirek-Dusek-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Mirek-Dusek-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Mirek-Dusek-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Mirek Dušek, Managing Director, World Economic Forum</figcaption></figure>



The world is currently mired in a low growth environment, with the latest IMF forecasts projecting 2.8% global growth in 2023 and 3.0% in 2024 – rates which are well below the average experienced over the past decade. This is in the context of other ongoing fragilities including stubborn inflation, a global debt crisis, geo-economic rivalry, geopolitical conflict and vulnerabilities in the financial sector, among others.



Despite this sobering outlook, or perhaps because of it, it is so crucial not to lose sight of avenues to relaunch growth and put us on a firm trajectory to new competitiveness and resilience. In this respect, there are three horizons of growth, for short-, medium- and long-term revitalization of the global economy.



Reopened Asian Economies



Among the regions hardest-hit by the COVID-19 pandemic, Asia is emerging from a protracted period of muted economic activity and looks set to resume its role as the world’s growth engine. China’s economic opening up earlier this year has provided a much-needed boost to both the regional and global economy. The reopening of crucial Asian economies at large provides us with immediate growth markets which can serve to spur growth in the short-term, while also establishing a base from which to overcome the low growth environment moving forward.



In comparison with other regions, Asia-Pacific is by far the brightest spot for economic growth at present, with the IMF’s latest estimates projecting the region to contribute 67.4% of all global growth in 2023, and with China alone contributing 34.9% of that total. The annual growth rate for the region is projected at 4.6% for 2023, representing a significant increase from the 3.8% growth posted last year and especially strong when considering that global growth projections overall are stagnant, if not slowing, hampered by an especially pronounced slowdown in advanced economies. Of particular importance is the region’s manufacturing sector, which plays a crucial role in its economic activity and will have to adapt to the changing investment and consumption appetites affected by this period of transition to ensure its continued growth.



A New Generation of Entrepreneurship and Innovation



Despite global economic fragilities, new ideas, approaches and mindsets inherent to entrepreneurship and innovation can spur the momentum needed to create more equitable, sustainable and resilient growth models. We should also remember that many successful companies were born out of adversity and at times of crisis.



It is thus important that even in the current challenging economic context, continuous funding has been flowing to digital and green industries, which are two essential components to successfully bringing innovation to market. At a macroeconomic level, it is estimated that 70% of all new value created in the global economy over the next decade will be based on digitally enabled platform business models, while the rapid development and adoption of frontier technologies including artificial intelligence and quantum computing will have significant impacts across all sectors of the economy. As an example, despite a slowdown in global venture capital funding overall, funding for companies engaged with artificial intelligence has expanded significantly and represented about 13% of total new funding in May 2023.



Trade in green goods, meanwhile, reached a record $1.9 trillion in 2022 and will continue to drive growth and new jobs. Activity based around the green economy must continue to accelerate over the medium-term as much work remains to be done. According to the International Energy Agency (IEA), over 40% of the emissions that will need to be cut to reach net zero between 2050 and 2070 must be addressed with technologies that are not currently being implemented at scale and are in the early adoption phase. This presents a significant opportunity for both business activity and public policy to be re-oriented around sustainability, creating positive growth trajectories out of crisis.



Rewired Cooperation



Over the longer term, the only way for the world to propel itself out of the low growth environment is through cooperation. The global geopolitical environment is experiencing strong headwinds and demonstrating a tendency towards increased fragmentation and polarization. Ultimately, though, the world needs productive and effective cooperation to allow for the trade, investment and exchange of ideas needed to achieve and sustain growth.



The costs of rejecting cooperation are too high. Recent analysis by the IMF puts the long-term costs of severe fragmentation at almost 7% of global output, and highlights disruption in trade as having the potential to negatively impact global living standards as severely as the Covid-19 pandemic. While we will certainly continue to have our differences, persisting with cooperation despite them will secure our future.



All of these topics and more will be at the core of the agenda for the 14th <a href="https://www.weforum.org/events/annual-meeting-of-the-new-champions-2023/">Annual Meeting of the New Champions</a> in Tianjin, People’s Republic of China, 27-29 June 2023.

Mirek-Dusek

3 Horizons of Growth in a Challenging World

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="712" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Adam-Elhiraika-photo-2023-1-820x712.jpg" alt="" class="wp-image-425760" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Adam-Elhiraika-photo-2023-1-820x712.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Adam-Elhiraika-photo-2023-1-300x260.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Adam-Elhiraika-photo-2023-1-104x90.jpg 104w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Adam-Elhiraika-photo-2023-1-768x666.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Adam-Elhiraika-photo-2023-1.jpg 1044w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Adam Elhiraika is the Director of the Macroeconomic and Governance Division of the United Nations Economic Commission for Africa </figcaption></figure>



The Summit for a New Global Financial Pact in Paris on 22-23 June 2023 was billed as an opportunity to solve the debt crisis and unlock trillions in low-cost financing needed to respond to the debt and climate crisis in the global South. While Zambia saw a welcome&nbsp;breakthrough in its restructuring process,&nbsp;the summit failed to deliver any structural reforms for&nbsp;the other African&nbsp;countries&nbsp;facing debt distress or in need of enhanced access to concessional external finance.&nbsp;&nbsp;



The COVID-19 pandemic, the war in Ukraine and tightening global financial conditions are stifling growth and undoing decades of development gains in Africa.&nbsp;Of the nine countries that are currently in debt distress, eight are in Africa.&nbsp;Many more are resisting default by reducing funding for schools, clinics and critical infrastructure. In 2023,&nbsp;African countries will pay US$68.9 billion in debt service, more than the US$58.4 billion they will likely receive in aid.&nbsp;



Some relief has been offered.&nbsp;During the peak of the pandemic, the Debt Service Suspension Initiative offered 48 countries a suspension from their bilateral payments. However, this expired in 2021, and the G20’s Common Framework for Debt Treatments, designed to coordinate and cooperate on debt restructuring, has largely failed.&nbsp;



Countries that applied were downgraded by credit rating agencies and have had to wait months, if not years, for any progress. To date, Chad is the only country that has finalized a debt agreement through the Common Framework. Recent developments in Ghana and Zambia show progress, as creditors have assured that they will participate in restructurings in good faith, which has unlocked IMF support.&nbsp;&nbsp;



As the creditor landscape &#8211; which includes multilateral, bilateral and private creditors &#8211; is hindered by geopolitical tensions between the Paris Club and China &#8211; the largest bilateral creditor &#8211; a comprehensive solution is required.&nbsp;The Paris Summit offered none of this.&nbsp;&nbsp;



An announcement that the World Bank will suspend debt service payments for countries hit by future major environmental crises is welcome but offers nothing to the countries already facing debt distress.&nbsp;&nbsp;



As G20 Finance Ministers now look ahead to their meeting in July, they should take steps to ensure that all creditors are incentivised to come to the table.&nbsp;&nbsp;



The Common Framework should be opened to middle income countries.&nbsp;&nbsp;



The IMF should amend its lending into arrears policy which would allow governments space to negotiate a restructuring.&nbsp;&nbsp;



Countries should be offered an automatic suspension throughout the process giving them fiscal space to ensure essential expenditure is maintained.&nbsp;&nbsp;



The current piecemeal approach is not working. &nbsp;



A comprehensive solution could not only avoid a ‘lost decade’ in development but could unlock potential for African countries to invest in their futures, build resilience to climate change and harness the potential of their most precious resource: their people.&nbsp;&nbsp;&nbsp;



Adam Elhiraika is the Director of the Macroeconomic and Governance Division of the United Nations Economic Commission for Africa&nbsp;

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What has the Paris Summit changed for African countries facing debt distress?  

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="800" height="533" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/download-57.jpg" alt="" class="wp-image-422380" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/download-57.jpg 800w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/download-57-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/download-57-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/download-57-768x512.jpg 768w" sizes="auto, (max-width: 800px) 100vw, 800px" /><figcaption class="wp-element-caption">FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva attends a news conference following a meeting at the Federal Chancellery in Berlin, Germany November 29, 2022. REUTERS/Michele Tantussi/File Photo</figcaption></figure>



At this Summit, we had a very engaged and frank discussion. And it is so very important that we did.



Our world is changing rapidly. It is affected by more frequent and severe shocks, and it is a world with more tensions than we need at this time.



We need each other the most today.



Our economy has proven resilient in spite of the shocks we experienced: COVID, war. But it hasn&#8217;t been without a cost. Interest rates are up. Debt burdens are rising. The cost of living is high. Poverty and Inequality are increasing.



And the consequences of the climate crisis are upon us. And they hit hardest poor people in poor and vulnerable countries that have done the least to cause this problem.



So, it is time to step up.



It is time to step up, it is time for leadership and – President Macron, President Ruto, Secretary Yellen, and Ajay – we have to live up to the expectations that are put on us.



I want to talk about three topics that are directly relevant to our work in the IMF, that have been high on the agenda over these two days.



First, debt. I completely agree with President Ruto, that it is a top priority to ease the debt burden on countries, especially those who have been hit by exogenous shocks. Countries with good governance but suffering from these shocks terribly.



We have made progress.



We do have now the G20 Common Framework delivering for Chad, for Zambia, and also for countries outside of the Common Framework such as Sri Lanka and Suriname. They are benefiting from bringing creditors – both public and private &#8211; together.



We recognize we have to accelerate debt restructuring. Make it predictable, timely and provide breathing space to debtor countries through debt suspension during negotiations.



This is what we have been advocating for.



We now have the Global Sovereign Debt Roundtable that brings together, for the first time in the last decades, traditional Paris Club creditors, non-Paris Club creditors – such as China, India, Saudi Arabia, Brazil – and the private sector together with the debtor countries.



I heard this call yesterday. So, President Ruto, you&#8217;re here representing these countries, I can say to you &#8211; yes, this is being done.



But we have to go beyond that. We have to recognize that debt and climate are correlated and will become even more so.



And therefore, we need to work on debt for climate swaps.



The World Bank has shown leadership on debt suspension clauses in their programs.



At the IMF, we have an instrument called the&nbsp;Catastrophe Containment and Relief Trust&nbsp;that allows us to directly provide debt relief to poorer countries when they&#8217;re hit by shocks.



We have used it in the past – we used it mostly for COVID – and we are determined to use it for climate shocks as well.



Talking about&nbsp;climate, let me turn to the second area directly relevant for our work.



The IMF has over the last years, integrated climate considerations into everything we do, because climate is macro-critical.



We have integrated it in fiscal policy, in monetary policy, in data and of course we also have a financial instrument.



Let me stress one area where the IMF has been tirelessly promoting action &#8211; and it is on carbon pricing.



Our analysis shows that without a carbon price, there is no chance that we will meet the 1.5 degrees Celsius target by 2030. We will miss it.



So, we need to get this incentive in place.



We advocate for an inclusive approach that includes taxes but also trade, as well as regulatory actions, as long as they deliver the right trajectory: upwards on the carbon price.



We have proposed a carbon price floor that is fair: poorer countries pay less, middle-income countries more, and rich countries, of course, have the highest price. And I agree there is space to think of international deployment of some of these resources.



We are not there yet but there is movement.



Just five years ago, carbon pricing covered 17 percent of global emissions. Now it covers around 25 percent.



There is only 75 percent more to go, but when there is a will there is a way.



Talking about&nbsp;financing&nbsp;– this is the third area that is very relevant for the IMF.



We have created a new instrument: the Resilience and Sustainability Trust. It lends – for first time in the history of the IMF – long-term affordable financing with a 20-year repayment period and 10-and-a-half year grace period.



How did we fund it? We funded it with the good will of countries like France &#8211; and we look forward to the U.S. contributing – that have taken part of their new SDR allocation and, per the promise made, they have made this available to the IMF to enable us to provide this long-term, affordable lending.



We have reached the commitment pledged in 2021 –the pledge of US$100 billion in SDR channeling. Around US$60 billion of this pledge is already working at the IMF in the Poverty Reduction and Growth Trust and in the Resilience and Sustainability Trust.



And I can tell you it makes a difference &#8211; we made two announcements here for Barbados and for Rwanda.



How this money &#8211; in partnership with the World Bank Group, in partnership with the Inter-American Development Bank, with national development banks, and based on analysis provided by our sister institution &#8211; how it makes a difference in accelerating the green transition. Bringing more ability for countries to face the challenge and to adapt to the challenge of climate change.



We have seven countries that have benefited, and we have 40 countries expressing interest. And because of that I want to announce today we are lifting our ambition to increase by 50 percent the size of the Resilience and Sustainability Trust, so we can respond to needs.



I want to finish with the following.



When I started in my job, the first thing that I did was to go to the hotel in Bretton Woods and to sit in the room, a very small room where it all happened. Only 44 countries at that time. By the way, all the delegations were led by men. Most of them came by boat.



Since then, the number of countries in the world has more than doubled. The number of people more than tripled. And global GDP increased more than 10 times.



It is a different world.



And obviously, we have to change.



We have been changing as the world changes and I completely and totally commit to changing for the future with you, our members.



And today, and yesterday, we got impetus for what it means to change. To be more inclusive, more representative, well-resourced, and serving our members with professionalism and empathy.

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Paris Summit Closing Press Conference Remarks

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/H.E.-Ellen-Johnson-Sireleaf-820x461.jpg" alt="" class="wp-image-425580" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/H.E.-Ellen-Johnson-Sireleaf-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/H.E.-Ellen-Johnson-Sireleaf-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/H.E.-Ellen-Johnson-Sireleaf-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/H.E.-Ellen-Johnson-Sireleaf-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/H.E.-Ellen-Johnson-Sireleaf.jpg 976w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">H.E Ellen Sirleaf Johnson, Former President of Liberia</figcaption></figure>



Africa as a continent has made significant advancements over the years yet, it is no secret that women in Africa continue to face significant barriers and inequalities across multiple sectors. This Saturday was World Day to Combat Desertification and Drought, and with the theme of achieving gender equality and land degradation neutrality, it is imperative that we not only appreciate the critical role of African women in driving sustainable development and environmental conservation but also map out key entry points that could hasten the pace at which we move away from these gender issues.



Throughout my career, both as the first female President of Liberia and in my current role at the Ellen Johnson Sirleaf Presidential Center, I have witnessed firsthand the incredible resilience, strength, and determination of African women. However, despite their invaluable contributions, women remain disproportionately affected by poverty, climate change, and land degradation. The time to harness their potential and empower them as catalysts for change is now and we must hold ourselves accountable to stop singing the same song and move into actionable and measurable tactics to achieve this goal.



The linkages between gender equality, land degradation, and sustainable development are undeniable. Numerous studies have shown that when women have secure land rights, they play a vital role in natural resource management, ecosystem restoration, and the preservation of biodiversity. Furthermore, empowering women economically and socially not only improves their own well-being but also leads to positive outcomes for their families, communities, and the environment. Women are the key to accelerating the pace towards reversing biodiversity loss and land degradation.&nbsp;



To achieve gender equality and land degradation neutrality, we must address the systemic barriers that hinder women&#8217;s full participation and empowerment. These barriers include unequal access to land, limited representation in decision-making bodies, gender-based violence, and discriminatory cultural norms. It is incumbent upon African leaders, governments, and civil society to break down these barriers and create an enabling environment for women to thrive.



One of the key initiatives of the Ellen Johnson Sirleaf Presidential Center is the promotion of women&#8217;s leadership and economic empowerment. Through our programs, we equip women with the skills, knowledge, and resources necessary to become effective leaders in their communities and advocates for sustainable development. Good and thoughtful leadership is what will catapult Africa ahead. We recognize that empowering women is not just a matter of justice but also a prerequisite for achieving a holistic sustainable ecosystem. This speaks to the need to continue investing in quality education and capacity-building for women.&nbsp; It is imperative that governments provide a space where targeted initiatives are implemented to address the unique challenges faced by rural women, including providing them with access to credit, technology, and markets to enhance their agricultural productivity and income-generating opportunities.



Moreover, it is essential to ensure that policies and legislation are gender-responsive, protecting women&#8217;s land rights and guaranteeing their inclusion in all levels of governance. This requires strengthening legal frameworks, promoting awareness of women&#8217;s rights, and providing legal support to women who face land-related disputes and injustices. Recognizing and valuing the traditional knowledge and practices of women in natural resource management is also critical.



Last year, in my role as the Africa Protected Areas Congress (APAC) Patron, I was privileged to witness the commitment of African nations to create the synergies between conserving nature and ensuring people are at the heart of conservation issues and solutions.&nbsp; Being a part of a huge movement that elevates the role of traditionally ignored groups that primarily consist of women, is awe spiring. The APAC Kigali Call to Action for example, emphasizes the need for gender equality and the inclusion of women in decision-making processes related to protected areas and natural resource management. It is encouraging to see the recognition of the crucial role that women play in conserving nature.&nbsp; It is clear that, in Africa, the role of women needs to be front and centre to the delivery and implementation of the just adapted Kunming &#8211; Montreal global biodiversity framework.&nbsp;&nbsp; &nbsp;&nbsp;



Achieving gender equality and land degradation neutrality in Africa is not only a moral imperative but a strategic decision for sustainable development. As we celebrate the World Day to Combat Desertification and Drought, let us commit to empowering African women, unleashing their potential as agents of change. By doing so, we can create a more just, prosperous, and environmentally sustainable future for all Africans. Together, we can turn the tide and build a continent where women thrive and our land flourishes.

H.E.-Ellen-Johnson-Sireleaf

Empowering African Women will Accelerate our Efforts to Reverse Land Degradation

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="656" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/48782783158_07f05fac49_o-820x656.jpg" alt="" class="wp-image-425557" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/48782783158_07f05fac49_o-820x656.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/48782783158_07f05fac49_o-300x240.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/48782783158_07f05fac49_o-113x90.jpg 113w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/48782783158_07f05fac49_o-768x614.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/48782783158_07f05fac49_o-1536x1229.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/48782783158_07f05fac49_o-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Dr Precious Moloi-Motsepe, Co-Founder and CEO: The Motsepe Foundation</figcaption></figure>



Africa has the largest youth population of any continent in the world. It is projected that by 2050 African youth in sub-Saharan Africa will make up almost all of the added global working-age population.



Developing a deep, sustainable social economy on the continent is a key means of ensuring the hopes and the energy of this youthful generation is realised.



Social economy organizations are often labour intensive, rather than capital intensive. As such, they offer job creation potential that capital intensive industries do not, and social entrepreneurship, with its twin focus on making a successful business and changing the world for the better, resonates very strongly with our youth.



With effective access to 4IR (Fourth Industrial Revolution) technology and supported by a global entrepreneurial and investment community, Africa’s young people hold immense business and social entrepreneurial potential that can drive inclusive growth across the continent.



The best ways to grow an ecosystem that supports African entrepreneurs varies by country, but there are some lessons and experiences that apply in most cases and that need to be the focus of our efforts over the next decades.



We need to ensure, firstly, that we get the basics right: investment and value for money are needed in health and education to ensure foundational capabilities are developed.



Young people in Africa rarely know any entrepreneurs, let alone social entrepreneurs, so they don’t consider this as a path for themselves; this is unfortunate because research emphasizes the important catalytic effect of knowing local entrepreneurial success stories. This lack of role models is doubly the case for women and girls.



We need to make entrepreneurship and social entrepreneurship attractive for young, ambitious, driven people on the continent. This should start at school with courses that focus on innovation, technology and entrepreneurship where we nurture values such as creativity, problem-solving and perseverance.



Technology is providing Africa with the opportunity to leapfrog its lack of traditional infrastructure — it must play a part. Technology provides information and capacity-building opportunities. It has become and will become even more of a tool for learning and education. Technology, used right, can offer commercially viable solutions to social challenges and allow up-scaling and global exposure through tech platforms.



However, digital access remains unequal in Africa and globally, and digital exclusion could be a key driver of inequality over the next decade: in the global South, for example, women are 50% less likely than men to be online.



African digital convergence will require active support for girls and women in STEM (Science, Technology, Engineering and Mathematics) fields. It will also require community networks and other methods of providing rural internet access, as well as policy and partnership measures that make data broadly affordable, compacts around affordability and use of data for education and health and context-specific technological innovation, incentivised through public and philanthropic support for young people with the appropriate skills and expertise in those industries that are growing and creating jobs.



Philanthropic support might best focus on addressing digital divides which exclude parts of a society or entire societies from effectively accessing the digital economy in most African countries. This could include inequality in access to digital infrastructure, inequitable data pricing and education systems where boys and young men are far more likely than girls and women to study in tech-related fields.



Thanks to organizations like the Schwab Foundation, the concept and potential of the social economy is increasingly being recognised in global and national conversations.



However, our societies continue to lack deep resilience and exclusion has increased in many countries over the Covid-19 years.



Reversals in the journey to gender equality have occurred, and many of those most impacted are the most vulnerable women in societies globally.&nbsp;



Effective measures to empower African women and girls remains a developmental win-win: there is no better value for money for our efforts. &nbsp;



Inclusion, quite simply, promotes innovation and cohesion. These, in turn, can drive growth and create jobs; this sort of virtuous circle is critical if Africa is to step onto a sustainable altered trajectory.



Supporting the social economy matters is essential from a gender equality perspective: many women are employed in it, for example in the care economy, and the shift in values it represents resonates with many women.



Mentoring and effective networks for young African businesswomen is essential: even favourable policy tools, such as preferential public procurement for women-owned social enterprises, can fail if the process of qualifying is too onerous, and if the information available about the opportunities does not reach the intended groups.



One of the main things the Motsepe Foundation has learned is the value of partnership and collaboration. That’s why organizations like the Schwab Foundation — which has been harnessing the power of partnership and knowledge sharing for 25 years — are so important.



Through meaningful collaboration, we can unlock Africa’s social economy potential. Doing so wouldn’t just be good for Africans — it would be good for the whole world.

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Africa’s potential lies in its social entrepreneurs — here’s how we nurture them

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="566" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Min.-Paula-HR-Picture-820x566.jpeg" alt="" class="wp-image-425545" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Min.-Paula-HR-Picture-820x566.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Min.-Paula-HR-Picture-300x207.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Min.-Paula-HR-Picture-130x90.jpeg 130w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Min.-Paula-HR-Picture-768x530.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/Min.-Paula-HR-Picture.jpeg 1280w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Hon. Paula Ingabire, Minister of ICT and Innovation, Rwanda</figcaption></figure>



The Covid-19 pandemic, and the sharp spike in energy costs… are the latest in the series of global shocks which have contributed to the disruption of global supply chains and triggered inflation on the African continent. These crises have come at a time when the Global South is already dealing with the existential threats of extreme poverty, political instability, and the climate crisis.



The rapid advancement of digital technologies and industries present a unique opportunity for African economies to mitigate these challenges and accelerate progress towards achieving universal and sustainable development. An example can be seen with the growth of the fintech industry. Fintechs offer financial inclusion for both MSMEs (micro, small and medium-sized enterprises) and private citizens in developing economies who have been previously excluded and have been driving the move from cash-based to digital financial transactions. Through the simple act of democratising finance, fintechs are supporting African countries especially the citizens to build their resilience to withstand global shocks.



<h2 class="wp-block-heading"><a></a>The Fintech Industry&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</h2>



Universal financial inclusion is a key driver of sustainable development, contributing to access to credit, savings and asset accumulation for the general population, government efficiency and transparency, supporting inclusion for vulnerable and disadvantaged groups in society and enabling the growth of businesses. Fintechs have emerged alongside traditional players such as banks, insurance firms and microfinances as key contributors to financial inclusion in the developing world.



One of the advantages of fintechs is their ability to bridge the financial inclusion gap. In many developing countries, including Rwanda, large segments of the population (particularly women, youth, refugees, and disabled persons) remain unbanked or underbanked, lacking access to basic financial services such as savings accounts, loans, and insurance. Fintech solutions, such as mobile banking and digital wallets, have made it possible for these individuals to access these services through their mobile phones, bypassing the need for traditional financial institutions.



To better illustrate, during COVID-19 – women savings’ groups started using a fintech solution to transition their saving schemes and lending capabilities through digital tools and enabling them to continue digitally save and lend to each other throughout the pandemic.



By Mid 2022, the value of e-payment to GDP increased from 95% to 111.9% significantly showing the acceptance of digital financial services amongst Rwandans. This is following significant awareness campaigns as well as key regulatory interventions that enabled ease of transition for new users of digital financial services especially with merchants.



This increased accessibility empowers individuals by providing them with a secure means to save money, access credit, and manage their finances. Recent decades have taught us that few factors work better as incentive for the adoption of new technologies than convenience. The ease with which digital wallets can be set up has led to a wave of digital financial services adopters among young people, rural areas and users who would otherwise not bother with the bureaucratic process of opening an account with a traditional financial institution.



Greater financial inclusion can also unlock additional benefits to the economy. In the case of farming communities, the ability of small agricultural producers to freely send and receive money can reduce their reliance on middlemen or large distribution chains when bringing their products to market. This, in turn, should have the effect of lowering food prices and maintaining the financial sustainability of small producers.



Fintechs have been front and centre when it comes to the digital revolution and driving the move from cash to cashless transactions. In many parts of the world, but particularly in Africa, the informal sector represents a significant size of our economy. The dominance of the informal sector has long challenged the ability of governments to regulate and conduct oversight on economic activities and limits the ability of governments to raise resources to support essential public services. The move from traditional to digital payments has supported the formalization of economic activities, resulting in improved fiscal transparency and reduced leakages. Less directly, formal financial inclusion and the growth of the taxpayer population foster a deeper feeling of civic duty and kindle the drive for democracy and justice in places where they are lacking.



In Rwanda, we continue to position ourselves as a “proof of concept country” and are willing to continue enabling innovators to bring forth solutions that promote financial inclusion in Africa. Through sandboxes both within the Rwanda Central Bank and the Capital Market Authority of Rwanda, innovation is provided an agile regulatory environment to test and expand.



<h2 class="wp-block-heading" id="h-looking-towards-the-future">Looking Towards the Future</h2>



The world of technology is no stranger to rapid changes, but unlike many other technologies which are yet to prove their social worth, fintech is already making an important difference to millions of people accelerating inclusivity and social change.



You need only look at the farmers of Africa, who in many places adopted fintech and mobile money solutions en masse, flipping decades of banking exclusion in mere years or the MSMEs of India who have taken up new<a href="https://www.entrepreneur.com/en-in/news-and-trends/5-ways-how-fintech-is-revolutionizing-msmes/443779"> </a>opportunities with neo-banking after struggling to obtain funding from traditional banks.



Of course, fintech is no miracle cure for all of the world’s ailments and the viability and growth of fintech solutions particularly in the African context continue to be limited by infrastructure gaps, low digital literacy and a lack of regulatory harmonization. As the number of mobile phone and internet users rapidly grows, robust investment in digital infrastructure and literacy will continue, and we will continue working towards promoting digital financial services in collaboration with other African governments to adopt and harmonize regulations that support the rapid scale up of fintech companies as well as interoperability for fintech systems.<a></a><a></a><a></a>



Rwanda will be hosting, from 20 to 22 June 2023 in Kigali, the Inclusive FinTech Forum, an initiative looking at addressing financial inclusion, not just in Africa, but across the Global South.

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Fintech and the Global South: the social impact of financial inclusion

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1242244235-820x547.jpeg" alt="" class="wp-image-397888" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1242244235-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1242244235-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1242244235-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1242244235-1536x1025.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1242244235-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">scuba diver floating near to corals on ocean floor.</figcaption></figure>



The world’s oceans are key to sustaining life of Earth and are the backbone of the global economy.



More than <a href="https://www.un.org/en/conf/ocean/background.shtml">3 billion people</a> rely on the ocean for food, jobs and livelihoods. And it’s estimated that every $1 invested in the ocean generates <a href="https://oceanpanel.org/wp-content/uploads/2022/05/Ocean-Panel_Economic-Analysis_FINAL.pdf">a return of $5</a> to the blue and wider economy.



Not only do the oceans provide an estimated <a href="https://wwf.panda.org/discover/our_focus/oceans_practice/reviving_the_ocean_economy/">US$2.5 trillion</a> worth of ecosystem services annually but they also help to mitigate some of the severe impacts of climate change.



In recent years, policymakers in Africa have recognized the importance of the blue economy and have launched a number of strategies and initiatives to support it. However, in order to unlock the potential of the blue economy, the financial system needs to play a key role.



Tapping into innovative financing such as blue finance, offers the continent an opportunity to boost the blue economy and safeguard oceans.



<h2 class="wp-block-heading" id="h-what-is-blue-finance">What is blue finance?</h2>



Of the 17 UN Sustainable Development Goals, SDG 14 “life below water” has seen the least investment to date and the World Economic Forum estimates that <a href="https://www.weforum.org/whitepapers/sdg14-financing-landscape-scan-tracking-funds-to-realize-sustainable-outcomes-for-the-ocean/">US$175 billion</a> of blue finance will be needed to achieve SDG 14 by 2030.



Blue finance refers to financial mechanisms or investments that ensure the conservation of the ocean and ocean-related resources in order to boost the blue economy. A number of blue financing instruments have emerged over the past couple of years that have driven much-needed investment into the blue economy.



For example, The Republic of Seychelles issued the world’s first <a href="https://www.worldbank.org/en/news/press-release/2018/10/29/seychelles-launches-worlds-first-sovereign-blue-bond">sovereign blue bond</a> in 2018 using <a href="https://www.nature.org/en-us/newsroom/tnc-announces-barbados-blue-bonds-debt-conversion/">debt for nature swaps</a> – a blue financing mechanism. Since then, a number of other similar sovereign blue bonds have been launched in countries such as Belize and Barbados using a similar innovative financial approach.



Last year, a new blue finance programme called <a href="https://www.conservation.org/press-releases/2022/11/14/ocean20-a-new-self-funded-marine-resource-management-framework">Blue Halo</a> was launched at the G20 in Indonesia that aims to use a blended finance approach to combine public and philanthropic capital with private sector investment to generate positive outcomes for the oceans.



Tools for financial innovation using nature-based solutions have also been developed.



The world’s first coral reef insurance policy was <a href="https://www.preventionweb.net/news/nature-conservancy-and-government-quintana-roo-announce-innovative-financial-mechanism">launched in Mexico</a> using an innovative financial approach to ensure that coral reefs can be restored if damaged by extreme weather events such as storms or hurricanes. The aim of insurance mechanism was to help enhance coastal resilience by conserving and protecting biodiversity such as coral reefs to help reduce disaster risk which in turn positively impacts the blue economy.



And building on that insurance model last year, a similar insurance mechanism was launched in the US <a href="https://www.nature.org/en-us/newsroom/first-ever-us-coral-reef-insurance-policy/">state of Hawai’i</a> to fund the restoration of coral reef after a hurricane or tropical storm damage.&nbsp;



More than one billion people depend on coral reefs for their livelihoods and food. They provide protection to over <a href="https://irff.undp.org/blog/coral-reef-insurance-protection-necessary-and-possible">600 million people</a> against coastal flooding and coral reefs support at least <a href="https://irff.undp.org/blog/coral-reef-insurance-protection-necessary-and-possible">25 percent</a> of all marine species. However, scientist predict that we could lose over <a href="https://www.wwf.org.uk/coral-reefs-and-climate-change">90 percent</a> of coral reefs by 2050 if drastic action isn’t taken.



<h2 class="wp-block-heading">Making financing a sustainable blue economy a priority for COP 28 and beyond</h2>



The blue economy presents a number of opportunities for the continent however, in order to unlock its potential, financing is a key factor.



Tapping into blue finance can be transformational to the continents blue economy and can help governments fund the protection of important natural ecosystems and most importantly, safeguard the health of oceans and local economies.



There’s a need to increase awareness of existing blue financing tools and emerging ones that can support Africa’s blue economy. COP28 offers a great platform to do so.

Corals underwater

Boosting Africa’s blue economy by tapping into blue finance

<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/IMG-20230608-WA0003-820x615.jpg" alt="" class="wp-image-425329" width="819" height="614" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/IMG-20230608-WA0003-820x615.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/IMG-20230608-WA0003-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/IMG-20230608-WA0003-120x90.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/IMG-20230608-WA0003-768x576.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/IMG-20230608-WA0003-1536x1152.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/IMG-20230608-WA0003.jpg 1890w" sizes="auto, (max-width: 819px) 100vw, 819px" /><figcaption class="wp-element-caption">Mark Malloch-Brown and Mo Ibrahim</figcaption></figure>



Momentum is now building behind the case for permanent G20 seat for the African Union. The grouping’s fundamental virtue is its ability to be representative: broader than the G7, but still small enough to fit around one table. It comprises twenty governments—19 major states plus the European Union—defined by their “systemic importance to the global economy”. Quite what “systemic” means is open to interpretation. That ambiguity helps to explain why Africa is home to almost one in five people in the world (and rising) but is represented in just one of the G20 seats: that of South Africa. By comparison Europe, home to under one in ten people, holds six of them: Germany, France, the UK, Italy, Russia, and the EU.



Proposed by Senegal last year, the idea of an AU seat was promptly endorsed by the US and French governments and Charles Michel, the President of the European Council. Its summit in February appointed Macky Sall, Senegal’s President, to negotiate it. On May 4th Germany’s Chancellor Olaf Scholz added his backing. The G7 summit declaration later last month also echoed the sentiment, albeit in more guarded language, and Brazil, China, and Indonesia are supportive too. Now the question is whether a consensus can emerge in time for the G20 Leaders’ summit hosted by India in September. The clock is ticking. &nbsp;



One player that could make a difference is the EU, if it speaks with one voice. It is the only existing G20 member that, like the AU, is an intergovernmental organization rather than a national government. And its backing would show that Europe as a whole supports the bid. The European Council summit on June 29th-30th would be the ideal moment for the EU to agree that united backing and, moreover, helpfully commit to supporting the AU consensus on how it should represent itself on the G20.



Some Europeans still have reservations. Would AU membership open a Pandora’s box of new membership bids, risking the G20 ballooning to an unwieldy size? And many African governments have taken an ambivalent stance on Russia’s invasion of Ukraine. Should Europe admit the AU without at least making that conditional on the bloc condemning this aggression?



These concerns are understandable but misplaced. Admitting the AU would be different from admitting a new country, as there are no other close international counterparts to the AU other than the EU itself. And although Russia’s war in Ukraine is of vast significance, it should not hinder equitable global representation for Africa. Trust in the West has been severely damaged across the low- and middle-income world by the perception of double standards over Covid-19 vaccines, the war, and accelerating debt crises in lower-income states. Europe must start by restoring it.



It must also keep sight of the bigger picture. Ours is a world of multiple inter-locking crises; of escalating economic, geopolitical, climate, and humanitarian emergencies reinforcing each other. Tensions between the US and China threaten at best a merely more fragmented global order, and at worst catastrophic conflict. Multilateralism is on the back foot and the Bretton Woods architecture looks ever-more outdated. &nbsp;How can we expect to tackle these crises without African voices at the table? The AU states easily qualify as systemically important. If they were a single country they would be the world’s ninth largest economy, and they play a decisive role in industries like critical raw materials. By the mid-century the continent will be home to one quarter of the world’s population, two-fifths of its newborn children, and fully half of its workforce. Nigeria alone will be on the cusp of overtaking the United States in size. &nbsp;



Europeans will feel the demographic boom and industrialization of the continent more immediately than most. Their own continent is aging, shrinking in relative global terms, and risks being squeezed by an all-consuming US-China contest. It will suffer if what remains of the multilateral order proves incapable of renewal, or if only groupings beyond it – like the BRICS – are involved in that order’s restoration.



These structural conditions all militate for Europe supporting an AU seat on the G20. The support itself would help build a trusting partnership of equals between Europe and Africa, and reset the stalled partnership between the EU and AU. The very fact of the seat would help Europeans and Africans forge a “third way” on global order, as Theodore Murphy of the European Council on Foreign Relations has argued, that rejects the duopolistic logic of that US-China contest and seeks a middle path. Amid growing competition for influence in the international system it would help Europe establish an enduring place for itself.



And it would aid the wider multilateralist cause; a modest step helping to build resolve for wider efforts. Other such examples include the Bridgetown Initiative to create new fiscal room for development and green investment, and the V20 grouping of finance ministers of especially climate-vulnerable economies. Think of these exercises in the art of the possible as a series of gears: smaller cogs that need to start turning for the larger wheels of multilateralist reform to creak into life. The campaign to bring the AU into the G20 is one of those cogs. At this month’s European Council summit, EU leaders have a chance to get it turning. &nbsp;

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An African Union seat at the G20 would be in Europe’s interests too

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="523" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/south-africa-russia-e1685444414271-820x523.jpg" alt="" class="wp-image-425171" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/south-africa-russia-e1685444414271-820x523.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/south-africa-russia-e1685444414271-300x192.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/south-africa-russia-e1685444414271-141x90.jpg 141w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/south-africa-russia-e1685444414271-768x490.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/south-africa-russia-e1685444414271.jpg 860w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">President Cyril Ramaphosa of South Africa meets President Vladimir Putin of Russia at the Russia-Africa Summit in Sochi in 2019. Credit: GovernmentZA.</figcaption></figure>



Stagnation at home and fence-sitting abroad are costing the country dearly, and the costs are only rising.



<a href="https://africanarguments.org/category/african-arguments/country/southern/south-africa/">South Africa</a> is facing two fundamental challenges, one internal, the other external. Its response to both – or failure to respond to either – will define its future prosperity and position in the world. A policy of indecisive drift will not resolve either.



Internally, the government must tackle the incompetence and graft that have undermined the delivery of vital services – above all, energy and transport – and that are doing serious damage to the prospects for economic growth.



Externally, South Africa’s efforts to sit on the fence between East and West – as it sees them – is being made increasingly uncomfortable by the war in Ukraine. Economically, its fortunes lie overwhelmingly with the liberal world economy. Politically, the old alliances with Russia and China still carry weight. The recent row with the US, threatening trade, and the invitation to&nbsp; President Vladimir Putin for the BRICS Summit suggest a crunch is coming.



It is the internal challenges that preoccupy most South Africans most of the time. “Load-shedding”, the euphemism for power cuts, is getting heavier, more costly, and more disruptive. As South Africa heads into winter, there is even talk of a potentially catastrophic grid loss. The government has resorted to hiring Karpower generator ships (at great expense), and the private sector is increasingly taking its own steps to reinforce generation capacity, including through growing investment in renewable power generation. Sales of solar panels are reportedly going through the roof. But they would rather have a grid that worked.



Former CEO André de Ruyter’s&nbsp;<a href="https://businesstech.co.za/news/energy/687775/de-ruyter-goes-for-round-2-on-eskom-corruption-in-explosive-tell-all-book/">exposé</a>&nbsp;of the incompetence and corruption at state energy supplier ESKOM has made it harder for the government to shuffle off responsibility for the woeful collapse in generation. State capture may have been exposed and contained, but it is still far from being rolled back. So hopeless has the government been that&nbsp;<a href="https://www.afrobarometer.org/articles/majority-of-south-africans-say-eskom-should-be-privatised-new-afrobarometer-study-shows/">Afrobarometer</a>&nbsp;reports nearly 60% of South Africans would prefer ESKOM to be privatised as the only way to get a reliable power supply.



This crisis illustrates that the ruling African National Congress (ANC) has become less a coalition of constituencies and more a patchwork of self-interested cliques who are reaping benefits from the state and passing them on exclusively to their loyal clients. Rent-seeking rather than service delivery has become the order of the day, and a reason to hang on to power. Buying off those cliques to keep himself in the presidency seems to be all Cyril Ramaphosa can manage. The ANC has rusted in power: the façade of the state remains, but behind it is decay that will bring the façade down if left unaddressed.



The last serious plan to reform the economy was Trevor Manuel’s&nbsp;<a href="https://www.gov.za/issues/national-development-plan-2030">National Development Plan</a>, launched in 2012. More than half-way to its 2030 target, little has been achieved. Of course, Covid and the Ukraine war interrupted all plans; but they have equally underlined the urgency of reform. South Africa ought to be bouncing back, with mineral prices high, surplus labour and – at least once upon a time – the best infrastructure in Africa. Instead, it is bumping along the bottom.



There is plenty of entrepreneurial and economic potential in the country. In the recent Financial Times survey of the&nbsp;<a href="https://www.ft.com/reports/africas-fastest-growing-companies">Fastest Growing Companies in Africa</a>, one third of the top 100 companies were based in South Africa, in sectors as diverse as fintech, IT, healthcare, energy, education, and agriculture as well as mining. But many of these companies lack access to the right kind of funding and feel that government is more an obstacle than a support to their efforts. Yet it is still the private sector that is going to create the jobs needed to employ the 50-70% of young people currently unemployed.



The lack of international investment and governmental reform will cost the economy dear in a few years’ time. Sweating assets will keep production up for a while, but a future decline in output is unavoidable unless investment increases now.



And that is where the second challenge becomes relevant domestically as well as globally.



Since 1994, the ANC has tried to balance South Africa’s economic engagement with Western markets – in 2022, 36% of its&nbsp;<a href="https://www.sars.gov.za/customs-and-excise/trade-statistics/">exports</a>&nbsp;went to the EU, US and UK, against 25% to Africa and 10% to China – with a political commitment to non-alignment and close party contacts with Russia, China, and liberation movements across the world. The Ukraine war and now the BRICS Summit in August are testing that balance.



Though initially quick to condemn the invasion, the South African government subsequently rowed back. And, in March this year, President Ramaphosa blamed&nbsp;<a href="https://www.aljazeera.com/news/2022/3/18/update-1-s-africas-ramaphosa-blames-nato-for-russias-war-in-ukraine">NATO expansion</a>&nbsp;for the outbreak of hostilities, echoing Russia’s own justification for the war. That, together with the alleged loading of weapons onto a Russian vessel in South Africa last December, provoked a rare public criticism from&nbsp;<a href="https://www.reuters.com/world/us-unlikely-sanction-south-africa-russia-weapons-dispute-bloomberg-news-2023-05-14/">US Ambassador Reuben Brigety</a>. Though the row has been defused, the implication that South Africa’s privileged access to US markets under the AGOA trade deal (worth&nbsp;<a href="https://www.tralac.org/blog/article/15522-update-on-the-african-growth-and-opportunity-act-agoa-and-related-developments.html#:~:text=South%20Africa%20continues%20to%20be,the%20most%20diversified%20export%20range.">$2.7 billion in 2021</a>) might not survive Congressional scrutiny when renewed in 2024, has been firmly registered. No Russian, Chinese, or African markets could compensate for that.



Putin’s indictment by the International Criminal Court (ICC) for child abduction poses a particular challenge for South Africa as host of the 2023 BRICS Summit. ICC indictments of incumbent heads of state are particularly problematic. In the case of both Presidents Uhuru Kenyatta of Kenya and Omar al-Bashir of Sudan, the indictments drew attention to their crimes but also inhibited diplomatic efforts to address the underlying problems. This made it difficult for others to discuss with and pressure them.



South Africa, which still belongs to the ICC, has been here before. When al-Bashir attended the African Union Summit in Durban in 2015, civil society groups took the government to court to arrest him while he was in the country, as required for ICC members. The&nbsp;<a href="https://www.theguardian.com/world/2016/mar/16/south-african-court-rules-failure-to-detain-omar-al-bashir-was-disgraceful">courts supported the case</a>&nbsp;and the government had to swiftly and surreptitiously smuggle al-Bashir out of the country, embarrassing everyone. If Putin shows up in August, this will happen again. Some in the ANC have urged the government to withdraw from the ICC as an interfering “Western” institution (though most African states are members), but this cannot be done before August.



Sitting on the global fence is becoming increasingly uncomfortable for South Africa. It will not dismount, but the pain is now economic as well as political, and the cost is rising.



Overall, the ANC appears to have become so introspective that it is losing touch with both its own citizens and the outside world. With a fragmented opposition, its chances of retaining power in next year’s elections, even if forced into a coalition, are strong. But as one observer told me, the only political party that was growing fast was the Apathy Party – and that itself poses problems for the country as a whole. To save its skin, the ANC needs to reform itself and the country, and fast.

south-africa-russia-e1685444414271

The two defining challenges facing South Africa

London, 24th&nbsp;May, 2023&nbsp;&#8211; Published by African Export-Import Bank (Afreximbank) the&nbsp;Africa’s 2023 Growth Prospects: Securing growth resilience in a ‘polycrisis’ world&nbsp;report highlights the various factors that are currently plaguing the global economy: stubbornly high inflation, U.S. and Chinese trade and tech wars, &nbsp;geopolitical tensions and supply chain problems. Following a strong economic recovery from the height of the Covid-19 pandemic, global growth of 3.4% in 2022 was far lower than the IMF forecast of 4.9%, in part reflecting the extremely difficult global economic environment and a dramatic shift towards price stability in the inflation and growth trade-off.



Efforts by key global central banks to rein in inflation must take priority but this is having a negative effect on Africa, with higher external debt servicing costs and a collapse in African sovereign debt issuance. Only three African nations, Angola, Nigeria and South Africa, successfully accessed capital markets in 2022, collectively raising US$6bn, down from the nine that raised almost US$20bn in 2021.



Inflation is proving difficult to tame, while the opening up of the Chinese economy from Covid lockdown measures could further fuel global inflation by releasing pent-up domestic demand. However, “heightened geopolitical tensions, besides preventing opportunities for international cooperation on global issues such as security, climate change and trade, have raised the risk of fragmentation”, the report says.



The Afreximbank report forecasts 4.1% GDP growth for Africa this year, above the global average, with growth shared around the continent, although power shortages and other infrastructural shortcomings will see South African growth slow. The continent has the potential to accelerate its economic prospects, including via increasing infrastructural investment; ongoing structural transformation; improving the macroeconomic environment; digitalisation; and the implementation of the African Continental Free Trade Agreement (AfCFTA).



Dr Hippolyte Fofack, Afreximbank chief economist and director of research and international cooperation, commented: “Inflation, which hit multi-decade highs and is raising the spectre of stagflation, is likely to emerge as the dominant macroeconomic story, eclipsing the short-lived globalisation of growth resilience post-pandemic&#8230;In the immediate term, restraining inflation in the most affected leading economies without provoking a hard landing or a full-blown financial crisis remains the most urgent challenge and risk to both global and African growth.” The Afreximbank Africa’s 2023 Growth Prospects: Securing growth resilience in a ‘polycrisis’ world is available at here:&nbsp;<a href="https://www.afreximbank.com/reports/africas-2023-growth-prospects-securing-growth-resilience-in-a-polycrisis-world/">https://www.afreximbank.com/reports/africas-2023-growth-prospects-securing-growth-resilience-in-a-polycrisis-world/</a>

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African growth potential in a polycrisis world

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="800" height="532" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/fl8560351828-image-ku56w7bc.jpg" alt="" class="wp-image-424911" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/fl8560351828-image-ku56w7bc.jpg 800w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/fl8560351828-image-ku56w7bc-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/fl8560351828-image-ku56w7bc-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/fl8560351828-image-ku56w7bc-768x511.jpg 768w" sizes="auto, (max-width: 800px) 100vw, 800px" /><figcaption class="wp-element-caption">Antarctica&#8217;s Ross Sea. Original public domain image from Flickr</figcaption></figure>



When it comes to the impacts of climate change, Africa is bearing the brunt. Although the continent <a href="https://www.afdb.org/en/news-and-events/climate-finance-africa-african-development-bank-spearheading-innovative-mechanisms-and-instruments-61174">contributes the least</a> to global warming, Africa is the most vulnerable to climate risks.



Climate change is also a multiplier threat in Africa exacerbating social and economic issues. From <a href="https://www.theguardian.com/environment/2023/apr/27/human-driven-climate-crisis-fuelling-horn-of-africa-drought-study">droughts</a> to storms and tropical cyclones, extreme weather-related events are increasing in Africa. And the continent is facing increased threats of more frequent and severe climate change-induced disasters.



As African nations remain vulnerable to the growing risks of climate change, building the continent’s resilience should be of top importance to policymakers across the continent. Innovative financing mechanisms can help the continent better prepare for and respond to natural disasters.



<h2 class="wp-block-heading" id="h-using-innovative-finance-to-address-climate-shocks">Using innovative finance to address climate shocks</h2>



Africa’s current climate finance levels are falling short and the climate financing gap is getting bigger. Between now and 2030, it’s estimated that Africa will need up to <a href="https://www.climatepolicyinitiative.org/publication/landscape-of-climate-finance-in-africa/#:~:text=Africa%2520requires%2520USD%25202.8%2520trillion,biggest%2520impacts%2520of%2520climate%2520change.">$2.8 trillion</a> to fulfil its National Determined Contributions under the Paris Agreement.



To close the growing climate finance gap, Africa should explore the use of innovative disaster risk financing mechanisms such as parametric insurance.



Parametric insurance, also called index-based insurance, <a href="https://corporatesolutions.swissre.com/insights/knowledge/what_is_parametric_insurance.html">differs from traditional insurance</a> as it’s based on the probability of a pre-defined event occurring rather than indemnifying for actual loss incurred. It offers pre-determined coverage for extreme weather-related events such as cyclones, droughts or floods.



A parametric insurance plan is <a href="https://scholarship.law.unc.edu/ncjolt/vol20/iss5/3/">based on two elements</a> first, a triggering event and second, a payout mechanism that’s pre-determined and custom created in order to ensure that there’s equity between the cost and payout.



In principle, parametric insurance is <a href="https://eprints.lancs.ac.uk/id/eprint/167588/">based on the analysis</a> of loss events. Insurers are able to be innovative in designing novel <a href="https://eprints.lancs.ac.uk/id/eprint/167588/">types of protections</a> against risks that wouldn’t meet the criteria for the indemnity insurance sector. And compared to traditional insurance mechanisms, parametric insurance differs as payouts are not based on an assessment ex-post instead, payouts are triggered when certain pre-defined parameters are met.



In the event of an extreme weather-related, governments are usually forced to reallocate funds from their national budgets in order to respond to a disaster. And for most developing countries, by the time relief reaches those that are impacted by the disaster, it’s often too late.



The biggest advantage of parametric insurance is that after a natural disaster occurs, it enables a rapid payment. This in turn can help governments react to climate shocks more swiftly.



Take Madagascar. It was the first country to adopt the African Risk Capacity’s (ARC) <a href="https://www.reinsurancene.ws/arc-launches-parametric-cyclone-product-in-africa/">parametric cyclone insurance policy</a>. After the extreme weather-related event that was tropical cyclone Batsirai hit Madagascar in 2022, it triggered the country’s parametric tropical cyclone insurance policy and the ARC paid out <a href="https://www.afdb.org/en/news-and-events/press-releases/madagascar-african-risk-capacity-group-african-development-bank-partnership-issues-15-million-insurance-pay-out-tropical-cyclone-freddy-recovery-efforts-60802#:~:text=In%202022%2C%20ARC%20Grou">$10.7 million</a> to the Government of Madagascar. In turn, Madagascar was able to use the funds to direct emergency aid to the most critical areas in a quick and efficient manner.



Malawi is another case in point. When Malawi was experiencing a drought during the 2021/2022 agricultural season, the government received a payout of <a href="https://www.arc.int/news/african-risk-capacity-group-and-african-development-bank-make-142-million-drought-recovery">$14.2 million</a> to help the country recover from the impact of the drought.



<h2 class="wp-block-heading">Mitigating Africa’s climate change risks</h2>



The recent <a href="https://report.ipcc.ch/ar6syr/pdf/IPCC_AR6_SYR_LongerReport.pdf">Intergovernmental Panel on Climate Change (IPCC) report</a> has revealed a disturbing forecast for Africa in regards to the increased frequency of severe extreme weather-related events such as droughts, floods and heatwaves. The report states that “with every increment of global warming, regional changes in mean climate and extremes become more widespread and pronounced”.



Innovative disaster risk financing instruments such as parametric insurance are in no way a panacea to Africa’s climate finance woes. But they offer the continent an opportunity to help mitigate it’s growing climate change risks and can help build resilience against future climate change shocks.

Antarctica’s Ross Sea. Original public domain image from Flickr

How to tackle Africa’s growing climate change-induced risks through innovative disaster risk financing

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="234" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-820x234.jpg" alt="" class="wp-image-424829" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-820x234.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-300x86.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-160x46.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-768x220.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-1536x439.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



Weaker currencies make the fight to curb inflation harder given the region’s dependence on imports



Most sub-Saharan African currencies have weakened against the US dollar, fanning inflationary pressures across the continent as import prices surge. This, together with a&nbsp;<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2023/04/14/regional-economic-outlook-for-sub-saharan-africa-april-2023">growth slowdown</a>, leaves policymakers with difficult choices as they balance keeping inflation in check with a still-fragile recovery.



As the&nbsp;<a href="https://www.imf.org/en/Blogs/chart-of-the-week">Chart of the Week</a>&nbsp;shows, the average depreciation for the region since January 2022 is about 8 percent. The extent varies by country, however. Ghana’s cedi and Sierra Leone’s leone depreciated by more than 45 percent.



The&nbsp;<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2023/04/14/regional-economic-outlook-for-sub-saharan-africa-april-2023#Managing-Exchange-Rate-Pressures-in-Sub-Saharan-Africa%E2%80%94Adapting-to-New-Realities">depreciations</a>&nbsp;across the region were mostly driven by external factors. Lower risk appetite in global markets and interest rate hikes in the United States pushed investors away from the region towards safer and higher paying US treasury bonds.



Foreign exchange earnings took a hit in many countries as demand for the region’s exports dropped because of the economic slowdown in major economies. At the same time, high oil and food prices, partly due to Russia’s war in Ukraine, pushed up import costs in 2022.



Large budget deficits have compounded the effects of these external shocks by increasing the demand for foreign exchange. About half of the countries in the region had deficits exceeding 5 percent of gross domestic product in 2022, putting pressure on their exchange rates.



<h2 class="wp-block-heading" id="h-implications">Implications</h2>



When currencies weaken against the US dollar, local prices rise, as much of what people buy, including essential items like food, are imported. More than two-thirds of imports are priced in US dollars for most countries in the region.



A 1&nbsp;percentage point increase in the rate of depreciation against the US dollar leads, on average, to an increase in inflation of 0.22&nbsp;percentage points within the first year in the region. There is also evidence that inflationary pressures do not come down quickly when local currencies strengthen against the US dollar.



Weaker currencies also push up public debt. About 40 percent of public debt is external in sub-Saharan Africa and over 60 percent of that debt is in US dollars for most countries. Since the beginning of the pandemic, exchange rate depreciations have contributed to the region&#8217;s rise in public debt by about 10 percentage points of GDP on average by end-2022, holding all else equal. Growth and inflation (which reduces the real value of existing debts) helped to contain the public debt increase to about&nbsp;<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2023/04/14/regional-economic-outlook-for-sub-saharan-africa-april-2023#Managing-Exchange-Rate-Pressures-in-Sub-Saharan-Africa%E2%80%94Adapting-to-New-Realities">6 percent of GDP</a>&nbsp;during the same period.



Many central banks in the region have tried to prop up their currencies by supplying foreign exchange to importers from their reserves. But with reserve buffers running low in many countries, there is little room to continue intervening in foreign exchange markets.



Countries have also applied administrative measures such as foreign exchange rationing or banning foreign currency transactions. These measures can be highly distortive and create opportunities for corruption.&nbsp;



Given that the external shocks are expected to persist, countries where exchange rates are not pegged (fixed) to a currency have little choice but to let the exchange rate adjust and tighten monetary policy to fight inflation. Countries with pegged exchange rates will need to adjust monetary policy in line with the country of the peg. In both country groups, fiscal consolidation can help to rein in external imbalances and limit the increase in debt related to currency depreciation. Structural reforms can help to boost growth.



This blog is based on an analytical note from the&nbsp;<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2023/04/14/regional-economic-outlook-for-sub-saharan-africa-april-2023">IMF’s Regional Economic Outlook</a>&nbsp;for sub-Saharan Africa.

blog-2099×600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o

African Currencies Are Under Pressure Amid Higher-for-Longer US Interest Rates

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="234" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/BLOG-2099x600-Gender-blog-Sylisia-iStock-by-Getty-Images-1387456778-820x234.jpg" alt="" class="wp-image-424698" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/BLOG-2099x600-Gender-blog-Sylisia-iStock-by-Getty-Images-1387456778-820x234.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/BLOG-2099x600-Gender-blog-Sylisia-iStock-by-Getty-Images-1387456778-300x86.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/BLOG-2099x600-Gender-blog-Sylisia-iStock-by-Getty-Images-1387456778-160x46.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/BLOG-2099x600-Gender-blog-Sylisia-iStock-by-Getty-Images-1387456778-768x220.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/BLOG-2099x600-Gender-blog-Sylisia-iStock-by-Getty-Images-1387456778-1536x439.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/BLOG-2099x600-Gender-blog-Sylisia-iStock-by-Getty-Images-1387456778-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



Less than half of workers employed in advanced economy central banks are women, but on average only a third of women are economists or managers, according to an I<a href="https://www.imf.org/en/Publications/WP/Issues/2023/05/05/Who-are-Central-Banks-Gender-Human-Resources-and-Central-Banking-533096?cid=cow-com-WPIEA2023091&amp;utm_medium=email&amp;utm_source=govdelivery">MF Survey</a>. Instead, women occupy 80 percent of administrative and HR roles, which shows that occupational segregation is quite pervasive.&nbsp;&nbsp;



This is the first survey of its kind that we know of, with studies having so far focused&nbsp;<a href="https://www.aeaweb.org/articles?id=10.1257%2Fjep.33.1.3&amp;utm_medium=email&amp;utm_source=govdelivery">on academia</a>&nbsp;and the&nbsp;<a href="https://onlinelibrary.wiley.com/doi/epdf/10.1111/obes.12509?utm_medium=email&amp;utm_source=govdelivery">private</a>&nbsp;and&nbsp;<a href="https://www.brookings.edu/research/former-fed-chair-janet-yellen-on-gender-and-racial-diversity-of-the-federal-governments-economists/?utm_medium=email&amp;utm_source=govdelivery">public sectors</a>&nbsp;more broadly. Central banks can set high gender standards for other economic institutions and this work sheds light on how monetary authorities can improve their own performance.



National central banks in the Group of Seven (G7) participated, as well as the European Central Bank. The topics covered include diversity policies, employment practices, earnings, leave and work arrangements, and childcare and other benefits.



Using data from the survey, we designed a new index, the Human Resources Gender Index (HRGI), which uses a scoring from 0 to 1, with 1 being maximum equality. As our latest <a href="https://www.imf.org/en/Blogs/chart-of-the-week?utm_medium=email&amp;utm_source=govdelivery">Chart of the Week</a> shows, policies to eliminate gender gaps have been only partially successful. The ranges and wide variation in scores suggest that participating central banks could do more to reduce the gender gap.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="538" height="399" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/gender-equality-at-central-banks-static-chart_crop.png" alt="" class="wp-image-424697" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/gender-equality-at-central-banks-static-chart_crop.png 538w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/gender-equality-at-central-banks-static-chart_crop-300x222.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/gender-equality-at-central-banks-static-chart_crop-121x90.png 121w" sizes="auto, (max-width: 538px) 100vw, 538px" /></figure>



On average, central banks score highly on diversity policies, such as hiring targets or mentoring programs and guaranteed interview schemes. However, these are rarely enforced by law and are often limited to people with disabilities.



Where central banks lag is the type of employment offered and pay—65 percent of the overall number of employees on part-time contracts are women. In some central banks, this percentage rises to as much as 80 percent. While these contracts offer flexibility, they can limit women’s career progression, contributing to the small number of women in managerial positions.



The gender gap is even more staggering when it comes to pay—just 27 percent of women make the top 20 percent of annual earnings.



Childcare and related subsidies are also limited, though parental leave and flexible work arrangements are widely offered.



We plan to extend the coverage of this survey to more central banks in both advanced and developing economies, in line with the&nbsp;<a href="https://www.imf.org/en/Topics/Gender?utm_medium=email&amp;utm_source=govdelivery">IMF’s strategy on gender</a>, and numerous studies that show the economic benefits of diversity and equality.



—This blog is based on a recent IMF working paper, titled “Who are Central Banks: Gender, Human Resources and Central Banking.” The authors are Mariarosaria Comunale, Petra de Bruxelles, Kalpana Kochhar, Juliette Raskauskas, and D. Filiz Unsal. Filiz Unsal is currently with the OECD, on leave from the IMF. Kalpana Kochhar is now Development Policy and Finance Director at the Gates Foundation. The authors thank the UK’s Foreign, Commonwealth and Development Office (FCDO) for the financial support for the study.

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We must blend and work towards bringing nature back to its course: Mudavadi

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African Currencies Are Under Pressure Amid Higher-for-Longer US Interest Rates

Women Struggle for Equal Pay and Progression at Central Banks

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