<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="755" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Amina-Mohamed-1-820x755.jpeg" alt="" class="wp-image-621463" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Amina-Mohamed-1-820x755.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Amina-Mohamed-1-300x276.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Amina-Mohamed-1-98x90.jpeg 98w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Amina-Mohamed-1-768x707.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Amina-Mohamed-1.jpeg 960w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Amina Mohamed is former foreign minister of Kenya</figcaption></figure>



The bank’s shareholders should back the only female candidate for bank president, to send a message to women across Africa and boost returns for its investors,&nbsp;say Amina Mohamed and&nbsp;Susana Malcorra



As the African Development Bank (AfDB) prepares to elect its 10th president this month,&nbsp;its shareholders&nbsp;should seize the strategic opportunity of naming a woman to fill this critical post.



The AfDB plays an important role in support of economic and social development in 54 African countries, with a combined population of nearly 1.5 billion people.&nbsp;But, just as important in today’s geopolitical landscape, the AfDB is no aid agency: it is a development bank, and its shareholders – all 54 Africa nations and non-African countries, including the United States, Britain, and France – receive a return on their investment. It proffers a rare example of how Africa’s crucial development initiatives including infrastructure, agriculture, and manufacturing, can be funded.&nbsp;



So, as an important institution it matters both to Africa and its shareholders on that continent and across the world who will take up the helm. All five candidates for the bank’s presidency have impressive credentials,&nbsp;and they have each offered compelling visions for leading this vital institution.&nbsp;However, when only&nbsp;one of the candidates &#8211; Swazi Tshabalala &#8211; is a woman, it is also worth asking what additional impact her election could have.&nbsp;



Since its founding in 1964, the AfDB has been led exclusively by men. This pattern reflects the persistent underrepresentation of women in the top leadership roles of international institutions around the world. We are members of GWL Voices, an advocacy group that studies the leadership of 54 of these organizations.



In our latest annual report,&nbsp;<a href="https://www.google.com/url?q=https://www.google.com/url?q%3Dhttp://www.gwlvoices.org/data%26amp;sa%3DD%26amp;source%3Deditors%26amp;ust%3D1746612833926485%26amp;usg%3DAOvVaw2D2Tjh-diVWYYyduzZfKps&amp;sa=D&amp;source=docs&amp;ust=1746612833937357&amp;usg=AOvVaw3vD3z3-u2IlT_cBrDHt3a8">“Women In Multilateralism 2025”</a>,&nbsp;we note that the AfDB is one of 19 international organizations that has never been led by a woman. This group has been steadily shrinking in recent years, as institutions such as the International Monetary Fund, the World Trade Organization, the European Investment Bank, and the World Meteorological Organization have elected women to the top job for the first time. These elections reflect a global consensus that the leadership of these institutions should mirror the gender composition of the societies that serve.



Africa needs smart, determined, and visionary leadership to tackle its pressing challenges, from climate change to unemployment to infrastructure deficits. Fortunately, there is no shortage of African women who fit that bill. Across the continent, we have distinguished ourselves as ministers of finance, central bank governors, CEOs, economists, and development experts. Many of us have risen through the ranks in multilateral institutions, combining local knowledge with global experience. It is not a question of whether African women are qualified—it is a question of whether we will be given the platform to lead.



Unfortunately, women across Africa continue to face systemic barriers to accessing power and influence. While progress has been made in some countries, gender inequality remains entrenched in many spheres of public and economic life. Women are often sidelined from the highest echelons of political and financial decision-making, even when they demonstrate exceptional competence and leadership.



Given this context, electing a woman to lead the African Development Bank would send a powerful signal. The AfDB is a pillar of development on the continent, responsible for financing critical infrastructure, promoting economic integration, and shaping the future of Africa’s economy. It is also at the forefront of efforts to combat the disproportionate impact of poverty on women, and to expand their access to education, jobs and digital connectivity.



Were girls and young women to see someone who looks like them leading the AfDB, it would expand their vision of what is possible. It would shift mindsets—not just among women, but also among men—about who belongs in leadership roles.



The symbolic power of a woman president at the AfDB would ripple far beyond the bank’s headquarters in Abidjan. It would reach rural schools in Malawi, startup hubs in Nairobi, and parliamentary chambers in Abuja. For the millions of African girls growing up in societies where their ambitions are often curtailed by social expectations, this could offer thrilling evidence that change is possible.



Choosing a woman could also benefit the AfDB’s performance, because research consistently shows that diverse leadership leads to better outcomes, greater innovation, and more inclusive decision-making.



At a time when Africa’s people are clamouring for bold, inclusive, and transformative leadership, the shareholding nations of AfDB have a clear opportunity to answer that call with a historic election.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="782" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Susana-Malcorra-1-820x782.jpeg" alt="" class="wp-image-621462" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Susana-Malcorra-1-820x782.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Susana-Malcorra-1-300x286.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Susana-Malcorra-1-94x90.jpeg 94w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Susana-Malcorra-1-768x732.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Susana-Malcorra-1.jpeg 1024w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Susana Malcorra is former foreign minister of Argentina and chief-of-staff to former UN Secretary General Ban ki-Moon</figcaption></figure>



Amina Mohamed is former foreign minister of Kenya; Susana Malcorra is former foreign minister of Argentina and chief-of-staff to former UN Secretary General Ban ki-Moon. Together they are a board member and co-founder of&nbsp;<a href="https://www.gwlvoices.org/">GWL Voices</a>, a global advocacy group of&nbsp;76 women leaders from around the world who have held high-level positions in governments and international organizations.&nbsp;&nbsp;

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A woman should lead the African Development Bank

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<figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="616" height="497" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Dorothy-1.jpg" alt="" class="wp-image-620992" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Dorothy-1.jpg 616w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Dorothy-1-300x242.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Dorothy-1-112x90.jpg 112w" sizes="auto, (max-width: 616px) 100vw, 616px" /><figcaption class="wp-element-caption">Dr. Dorothy Nyambi, President and CEO of MEDA (Mennonite Economic Development Associates)</figcaption></figure></div>


2025 will be a pivotal year for investment. A quarter way into the 21st Century and global markets are being rocked by shifting economic policies, geopolitical realignments, growing protectionist trade, and new national industrial strategies. As investors ponder what&#8217;s next, Africa should be top-of-mind.



The African Development Bank projects the continent&#8217;s economy will expand by 4.3 per cent in 2025, up from 3.7 per cent in 2024. It will offer compelling opportunities across equities, venture capital, and infrastructure. The IMF predicts nine of the world’s fastest growing economies will be in Africa. They include: South Sudan, Libya, Senegal, Sudan, Uganda, Niger, Zambia, Benin Republic and Rwanda.



In Rwanda, Ethiopia, Ivory Coast, and Tanzania growth is projected to exceed six per cent, due to agriculture, manufacturing, services, and technology sector expansion. Public markets are confirming it. The Bourse Regionale des Valeurs Mobileres, Nairobi Securities Exchange, and Johannesburg Stock Exchange are seeing heightened activity, with increased foreign investor inflows and a resurgence of local participation.



With these trends, the Mennonite Economic Development Associates (MEDA), co-created the impact investment fund-of-funds, the Mastercard Foundation Africa Growth Fund, to invest in youth and to empower women entrepreneurs to lead innovation, growth and job creation. Women are Africa’s economic backbone. Sub-Saharan women have amongst the highest rates of entrepreneurship at 26 percent. Globally, one in six women intend to start a business, in Africa, it’s one in three. Women reinvest up to 90 percent of their incomes in education, health, and nutrition, compared to 40 percent by their male counterparts, transforming their societies.



As leading Global North economies descend into trade spats driven by the Trump Administration’s protectionist, and arguably imperialist, overtures. Canada launched its first-ever Africa Strategy for mutual prosperity and security. Africa can offer new markets, investment and trade opportunities for the North to pivot to, as the established norms fall.



Africa is the world’s youngest continent, more than 60 per cent of its people are under the age of 25. A promising future is evident. Today’s population is 1.4 billion and projected to reach 2.5 billion by 2050. Africa&#8217;s youth population, already the largest in the world, is projected to double to more than 830 million by then. That’s where business needs to be.



And women are essential to Africa’s economic renaissance. The Mastercard Index of Women Entrepreneurs 2023 ranked Uganda, Botswana, and Ghana among the top countries with high rates of female entrepreneurship. Many young women in West, East, and Central Africa are in informal employment, often in agriculture. This sector provides low wages and job insecurity, limiting economic advancement. Access to finance remains a barrier, with African women receiving only seven per cent of total private equity and venture capital funding. Microfinance institutions and fintech innovations, such as M-Pesa in Kenya, have improved financial inclusion for women, but the opportunities for real returns and growth are being missed.



The demographics mean a burgeoning labor force and increased consumer base. Investors that fuel this growth can ensure the region skips youth unemployment and promotes training and education to prepare workers for the future. Sub-Saharan Africa&#8217;s working-age population will surpass that of developed countries. This shift compels substantial investments, estimated at $400 billion annually by the African Development Bank, to harness growth potential.



Priority sectors include Agriculture &amp; Agri-tech, Renewable Energy, Digital and Fintech,andInfrastructure Development. Africa’s agriculture sector is critical, employing over 60 per cent of the workforce. Investment in agribusiness and climate-smart techniques will deliver food security. Africa also has massive untapped potential in solar, wind, and hydropower, making clean energy investment a necessity. Its mobile phone penetration and financial inclusion efforts are driving innovation, particularly in markets like Kenya and Nigeria. And rapid urbanization calls for funding transport, housing, water, and sanitation systems.



Economist Rita Babihuga-Nsanze estimates there is $2-$4 trillion in excess African savings, in pension funds, insurance funds, sovereign wealth funds and central bank reserves. Much of this capital, however, is currently invested outside Africa, often in low-yielding assets.



This is why we are promoting greater Domiciliation of investment vehicles (IVs) in Africa. Eighty percent of African IVs domicile outside Africa. A change is vital to improving Africa&#8217;s competitiveness and ensuring inclusive growth, especially support for micro, small, and medium enterprises (MSMEs).



We conducted a study of factors and opportunities in Cabo Verde, Côte d’Ivoire, Ethiopia, Ghana, Kenya, Mauritius, Morocco, Nigeria, Rwanda, Senegal, South Africa, Togo and Uganda. A stronger investment ecosystem will a deliver more global and domestic capital. IVs can pool capital across financial instruments, a diversity of business models, and different capital allocators, directing private capital, venture capital and pension funds to invest in MSMEs. But, the countries studied must engage policymakers, regulatory bodies, and advocacy groups to build and strengthen more robust markets. Clear and supportive policy will unlock pension fund investments. And facilitating seamless Domiciliation, while ensuring regulatory clarity, will ensure investor confidence.



The investment conditions are ripe in Africa. By seizing on high growth, scaling enterprises with innovative finance by domestic IVs, encouraging capital inflows from domestic and global sources, promoting investment-friendly capital ecosystems with Domiciliation, and encouraging new financiers to develop African IVs will enable both domestic and global investment at the most critical time in history. It’s time for Africa to become the pivot point for investors everywhere.

Dorothy 1

Africa can be the pivot point for investors hedging their bets from US policy shifts

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="410" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/2a6d027b1b076ced518820eae3105321.2-1-super.1-820x410.jpg" alt="" class="wp-image-616265" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/2a6d027b1b076ced518820eae3105321.2-1-super.1-820x410.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/2a6d027b1b076ced518820eae3105321.2-1-super.1-300x150.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/2a6d027b1b076ced518820eae3105321.2-1-super.1-160x80.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/2a6d027b1b076ced518820eae3105321.2-1-super.1-768x384.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/2a6d027b1b076ced518820eae3105321.2-1-super.1.jpg 1360w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Fred Dufour/Getty Images</figcaption></figure>



US President Donald Trump’s dismantling of America’s foreign-aid program may be the wake-up call African leaders need. If necessity is the mother of invention, the end of USAID could galvanize African governments to confront their countries’ challenges head-on.



WASHINGTON, DC – Back in 2015, then-Kenyan President&nbsp;Uhuru Kenyatta&nbsp;warned&nbsp;the Pan-African Parliament about the dangers of development assistance. “The future of our continent cannot be left to the good graces of outside interests,” he said. “Foreign aid, which often comes with terms and conditions that preclude progress, is not an acceptable basis for prosperity and freedom. It is time to give it up.”



Kenyatta’s call for self-reliance seems prescient in light of US President Donald Trump’s dismantling of the United States Agency for International Development (USAID) and&nbsp;recent cuts&nbsp;to already-diminished foreign-aid budgets in France, Germany, and the United Kingdom. He had a point: as aid dependence became more entrenched over the decades, Africa’s share of global trade steadily fell, and now stands at&nbsp;less than 3%. National ambitions to build productive industries that can meet domestic demand have atrophied, and continent-wide efforts to strengthen regional integration have waned.



That is why, despite the disproportionate impact of these cuts on the continent, some Africans see the demise of foreign aid as an opportunity. An Afrobarometer survey of 34 African countries&nbsp;found&nbsp;that 65% of respondents wanted their governments to finance development with their own resources, rather than with external loans.



Self-reliance was an aspiration of independence leaders such as Kwame Nkrumah, Ghana’s first president and a co-founder of the Organization of African Unity (a forerunner of the African Union) – who viewed the foreign-aid system as a&nbsp;form of neocolonialism. Current Ghanaian President&nbsp;John Dramani Mahama&nbsp;has taken up the cause,&nbsp;calling&nbsp;the destruction of USAID “a signal to Africa that the time has come for us to be more self-reliant.”



Africa’s muted response contrasts sharply with the dire predictions of development professionals in Western capitals, who are warning that a humanitarian catastrophe will soon unfold on the continent. According to Nicholas Enrich, formerly USAID’s acting assistant administrator for global health, gutting the agency would&nbsp;result&nbsp;in an additional 71,000-166,000 deaths per year from malaria and one million children annually with untreated severe acute malnutrition, among other harmful consequences.



True, Africa has long depended on foreign aid not just for short-term emergency relief but also for critical health funding. The President’s Emergency Plan for AIDS Relief (PEPFAR) and&nbsp;the President’s Malaria Initiative (PMI), decades-old programs created by US President George W. Bush, have been&nbsp;instrumental&nbsp;in combating HIV/AIDS and malaria, which are disproportionately prevalent in Africa. Around&nbsp;67%&nbsp;of people living with HIV worldwide reside in Sub-Saharan Africa and the continent accounts for&nbsp;more than 90%&nbsp;of malaria cases and deaths.



Africa’s muted response contrasts sharply with the dire predictions of development professionals in Western capitals, who are warning that a humanitarian catastrophe will soon unfold on the continent. According to Nicholas Enrich, formerly USAID’s acting assistant administrator for global health, gutting the agency would&nbsp;result&nbsp;in an additional 71,000-166,000 deaths per year from malaria and one million children annually with untreated severe acute malnutrition, among other harmful consequences.



True, Africa has long depended on foreign aid not just for short-term emergency relief but also for critical health funding. The President’s Emergency Plan for AIDS Relief (PEPFAR) and&nbsp;the President’s Malaria Initiative (PMI), decades-old programs created by US President George W. Bush, have been&nbsp;instrumental&nbsp;in combating HIV/AIDS and malaria, which are disproportionately prevalent in Africa. Around&nbsp;67%&nbsp;of people living with HIV worldwide reside in Sub-Saharan Africa and the continent accounts for&nbsp;more than 90%&nbsp;of malaria cases and deaths.



This aid is not confined to Africa’s neediest and most vulnerable countries, such as the Central African Republic, Somalia, and South Sudan, where official development assistance accounts for&nbsp;more than 20%&nbsp;of gross national income. Even Nigeria and South Africa, two of the continent’s largest economies, rely heavily on USAID programs. PEPFAR&nbsp;funds&nbsp;nearly 20% of South Africa’s $2.3 billion annual HIV/AIDS program, providing life-saving antiretroviral treatments to 5.5 million people every day. PMI support comprises around&nbsp;21%&nbsp;of the national health budget in Nigeria, which has the world’s&nbsp;highest burden of malaria.



African countries’ dependence on the US for public-health expenditure poses a national-security risk, as vaccine nationalism during the COVID-19 pandemic made clear. It also implies massive governance costs. A 2023 study has&nbsp;shown&nbsp;that foreign aid tends to weaken fiscal capacity in African democracies. These governments may become less accountable to their citizens and more autocratic, propped up by official development assistance.



Foreign aid precludes economic progress precisely because of its “terms and conditions,” as Kenyatta put it. The aid industry in Africa runs largely on foreign contractors, limiting opportunities for African entrepreneurs and undercutting local growth. This constrains the expansion of governments’ very narrow fiscal space, sustains persistently high unemployment rates, and fuels migration pressures. Even South Africa, the continent’s most advanced economy, has an unemployment rate&nbsp;exceeding 30%.



In the wake of Trump’s assault on USAID, Africa should put itself on a path toward health self-sufficiency. That means taking more control over the response to HIV/AIDS and malaria, from research and development to manufacturing diagnostics and treatments, rather than relying on extra-regional solutions and imports. To mitigate the risks of aid dependence and bolster economic growth, African countries must take advantage of the opportunities inherent in health crises and unleash the animal spirits of local entrepreneurs. The Nigerian government has already approved an additional&nbsp;$200 million&nbsp;in health spending as part of its 2025 budget, and other countries are contemplating similar increases.



African countries must take the same approach to other strategic sectors, especially nutrition security, because overreliance on foreign-aid-funded food imports&nbsp;harms African farmers&nbsp;by distorting markets and depressing local prices. The continent needs fair trade, not aid. With an&nbsp;estimated 60%&nbsp;of the world’s uncultivated arable land, Africa should not be dependent on external suppliers to feed itself.



To be sure, African governments with limited fiscal space and poor access to international markets may not be able to build the infrastructure required to drive domestic production. This problem can be solved by pooling resources with other countries to develop productive infrastructure and resilient regional supply chains, thus boosting intra-African trade and deepening regional integration. India is an example of what can be achieved. After all, its world-beating and uber price competitive generic-drug industry began to take off long before India’s national economy did.



Achieving economies of scale through the African Continental Free Trade Area could help crowd in private capital to build up critical industries. This would enable Africa to expand aggregate output and increase trade levels, both of which have remained dismally low.



Trump’s attack on development assistance can be the wake-up call African leaders need. After decades of lowering ambitions and outsourcing development, it is time for the continent to take full advantage of the growth opportunities associated with domestic crises, rather than ceding control to the aid system and the foreign contractors that fill its ranks. Necessity is the mother of invention, as the cliché goes, which means that the end of USAID could galvanize African governments to confront their countries’ challenges head-on.

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Dismantling USAID Could Boost African Self-Reliance

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Straight talk on African elites’ complacency: the case of Kenya

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="498" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/sidi-ould-tah-820x498.png" alt="" class="wp-image-613679" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/sidi-ould-tah-820x498.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/sidi-ould-tah-300x182.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/sidi-ould-tah-148x90.png 148w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/sidi-ould-tah-768x466.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/sidi-ould-tah-1536x932.png 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/sidi-ould-tah.png 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



South Africa has entered a new era—politically recalibrated, economically pressured, yet fundamentally poised. The 2024 general election, resulting in the country’s first national coalition Government of National Unity (GNU) under President Cyril Ramaphosa, was not just a political outcome—it was a societal reset. South Africans demanded a new social contract: delivery over rhetoric, partnership over posturing, credibility over complexity. In his campaign and subsequent inaugural commitments, President Ramaphosa emphasized infrastructure renewal, energy security, youth employment, and national coherence as pillars of renewal. The task now is not to define direction—but to deliver at scale.



The economic headwinds remain sobering. In 2024, GDP growth hovered at 1.1%, well below the levels needed to address poverty and exclusion. Unemployment stood at 31.9%, with youth unemployment exceeding 44%. Public infrastructure continued to underperform, with deteriorating logistics capacity and ongoing energy insecurity compounding economic constraints. The 2024 Electricity Regulation Amendment Act marked a major policy shift, opening the generation and transmission sectors to competition and seeking to reduce dependence on Eskom. However, implementation bottlenecks persist, and the gap between legislative intent and lived experience remains wide.



Amid this environment, infrastructure is not just a sector—it is the backbone of recovery. The government’s Economic Reconstruction and Recovery Plan (ERRP) rightly centers infrastructure-led growth, but delivery capacity and funding constraints have limited momentum. South Africa’s capital expenditure as a percentage of GDP remains below 6%, far from the National Development Plan’s 10% target. Logistics inefficiencies alone are estimated to cost the economy billions of rands annually. Transnet’s operational and governance challenges have undercut freight reliability, while delays at major ports continue to undermine trade competitiveness.



This is why the updated National Infrastructure Plan 2050, Phase 2 (released in 2024), declared: “A fit-for-purpose infrastructure delivery system is a precondition for inclusive economic participation, regional trade, and long-term fiscal resilience.” That framing reflects the reality: South Africa’s infrastructure challenge is not only national—it is continental. As the anchor of the North–South Corridor and a key node in the Maputo Development Corridor, South Africa’s success in unlocking logistics performance has direct implications for SADC trade volumes, intra-African commerce, and AfCFTA implementation.



In this landscape, South Africa needs a multilateral development partner that not only shares its sense of urgency, but also matches its institutional sophistication. The African Development Bank has shown glimpses of this. In 2024, the AfDB approved a $1 billion sovereign facility to support Transnet’s recovery—one of the clearest signals of confidence in the state’s commitment to reform. The Bank has also contributed to Just Energy Transition efforts, from concessional project preparation to financing renewable energy pilots and public–private structuring. But the scale of South Africa’s infrastructure imperative—and the shifting global landscape—demand a more decisive, fit-for-purpose partnership.



Global economic realities are evolving fast. Fiscal tightening, geopolitical fragmentation, and climate financing imbalances are reshaping the development finance ecosystem. South Africa’s own geopolitical stature—as a G20 member, BRICS founder, and climate diplomacy broker—positions it as both a contributor to and a demander of coherent multilateral reform. As debates intensify around SDR rechanneling, MDB reform, and global infrastructure liquidity, the AfDB must become more than Africa’s lender. It must become its bridge. And that includes being a credible internal steward—governed with the transparency, institutional discipline, and accountability that member states like South Africa have long championed.



This is where the AfDB’s upcoming leadership transition matters—not as a continental ritual, but as a strategic inflection point. Dr. Sidi Ould Tah, a seasoned multilateralist and candidate for the AfDB presidency, offers a vision that aligns with South Africa’s expectations: credible delivery, innovative capital mobilization, and institutional relevance. As President of BADEA, Dr. Tah helped reposition the institution from a quiet partner to an influential force—mobilizing Africa–Gulf co-financing, targeting SMEs, and supporting infrastructure corridors with agility and accountability. [Under his leadership, BADEA attained prestigious AA+/AAA credit ratings, quadrupled project approvals, modernized its digital systems, and expanded total assets from $4 billion to nearly $7 billion—all while maintaining one of the lowest non-performing loan ratios (0.4%) among African DFIs.]



His platform for the AfDB speaks directly to South Africa’s core priorities. He proposes the creation of a Private Capital for Africa platform—housed in Johannesburg—to crowd in institutional investors, deploy blended finance tools, and de-risk large-scale regional infrastructure. This responds directly to South Africa’s call for the AfDB to partner more strategically with its own development finance institutions such as the PIC, DBSA, and IDC—pools of capital that remain under-leveraged for African integration. Dr. Tah’s proposal to scale AfDB’s annual capital mobilization to $50–60 billion through hybrid instruments, sovereign wealth partnerships, and diaspora finance aligns with South Africa’s preference for innovative, non-distortionary financing that does not increase debt distress.



Beyond capital, his focus on institutional integrity—through a proposed Pan-African Results &amp; Governance Lab embedded in the Bank—reflects South Africa’s long-standing emphasis on fiduciary control, transparency, and performance culture. [This commitment builds on Dr. Tah’s introduction of ESG-aligned sustainable financing frameworks and ISO-certified governance systems during his tenure at BADEA—credentials that mirror South Africa’s own calls for accountable multilateralism.] The need for institutional discipline, not just policy ambition, has never been clearer. With a reformist state, deep financial markets, and advanced project planning systems, South Africa is not short on technical capacity—it needs a partner that can co-implement.



And that co-implementation must be based on trust and shared vision. In South Africa’s case, the most impactful development partnerships are those that work horizontally—not just from capital provider to state, but across institutions, development banks, private capital pools, and regional alliances. This is where the AfDB, under the right leadership, can amplify what South Africa already possesses: a sophisticated institutional base and a continental integration agenda that is both credible and executable.



South Africa’s credibility on the world stage—particularly on matters of climate finance, regional stability, and multilateral equity—is not accidental. It is the product of decades of institution-building, diplomacy, and democratic resilience. The next AfDB leadership must recognize that countries like South Africa are not merely recipients of development finance—they are architects of its future. A strong, responsive, and politically attuned AfDB can amplify that influence, not compete with it.



Dr. Tah’s platform is not a promise—it is a blueprint. It is not only about who leads the AfDB, but how it is led. For South Africa, the choice must be strategic, not sentimental. The development bank it helped to build must now evolve in tandem with its own transformation.



The moment demands alignment between national ambition and continental delivery. South Africa has done the political heavy lifting. It is now time for the institutions around it to match that seriousness—with resources, with reform, with partnerships, and with results. The AfDB, under the right leadership, can be the partner that powers this next chapter.

sidi-ould-tah

Powering Progress in South Africa and The AfDB Infrastructure Imperative

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="234" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600fm-ch1-rising-global-debt-requires-countries-to-put-their-fiscal-house-in-ordercimf-phot-820x234.jpg" alt="" class="wp-image-612798" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600fm-ch1-rising-global-debt-requires-countries-to-put-their-fiscal-house-in-ordercimf-phot-820x234.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600fm-ch1-rising-global-debt-requires-countries-to-put-their-fiscal-house-in-ordercimf-phot-300x86.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600fm-ch1-rising-global-debt-requires-countries-to-put-their-fiscal-house-in-ordercimf-phot-160x46.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600fm-ch1-rising-global-debt-requires-countries-to-put-their-fiscal-house-in-ordercimf-phot-768x220.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600fm-ch1-rising-global-debt-requires-countries-to-put-their-fiscal-house-in-ordercimf-phot-1536x439.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600fm-ch1-rising-global-debt-requires-countries-to-put-their-fiscal-house-in-ordercimf-phot-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">(Credit: IMF Photo/Tuane Fernandes)</figcaption></figure>



Major policy shifts underway have heightened global uncertainty. The series of recent tariff announcements by the United States, and countermeasures by other countries have increased financial market volatility, weakened growth prospects, and increased risks. They come in the context of rising debt levels in many countries and already strained public finances, which in many cases will also need to accommodate new and permanent increases in spending, such as defense. Rising yields in major economies and widening spreads in emerging markets further complicate the fiscal landscape.



We project global public debt to increase by 2.8 percentage points this year—more than twice the estimates for 2024—pushing debt levels above 95 percent of gross domestic product. This upward trend is likely to continue, with public debt nearing 100 percent of GDP by the end of the decade, surpassing pandemic levels. These numbers are based on the&nbsp;<a href="https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025?cid=bl-com-SM2025-WEOEA2025001&amp;utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener">World Economic Outlook</a>&nbsp;reference projections, reflecting tariff announcements made between Feb. 1 and April 4. Amid substantial policy uncertainty and a shifting economic landscape, debt levels could rise even further.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2025/04/23/rising-global-debt-requires-countries-to-put-their-fiscal-house-in-order?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2025/04/11470108/fm-chart1_original.png" alt="Chart1_v1"/></a></figure>



In this environment, fiscal policy faces critical trade-offs: balancing debt reduction, building buffers against uncertainties, and meeting urgent spending needs amid weaker growth prospects and higher financing costs. Navigating these complexities will be essential for fostering stability and growth.



Risk of higher debt



Debt risks were already elevated. According to the&nbsp;<a href="https://www.youtube.com/watch?utm_medium=email&amp;utm_source=govdelivery&amp;v=yab69j8mnOc" target="_blank" rel="noreferrer noopener">Fiscal Monitor’s debt-at-risk</a>, which&nbsp;utilizes data up to December 2024, in a severely adverse scenario global public debt could reach 117 percent of GDP by 2027. This would represent the highest level since World War II, exceeding reference projections by almost 20 percentage points.



Risks to the fiscal outlook have further intensified. Debt levels may rise even further than the debt-at-risk estimates if revenues and economic output decline more significantly than current forecasts due to increased tariffs and weakened growth prospects. Additionally, escalating geoeconomic uncertainties could heighten debt risks, driving up public debt through increased expenditures, particularly in defense. Demands for fiscal support could also rise for those vulnerable to severe disruptions from trade shocks, pushing up spending. The&nbsp;<a href="https://www.imf.org/en/Publications/FM/Issues/2025/04/23/fiscal-monitor-April-2025?cid=bl-com-SM2025-FMOEA2025001&amp;utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener">Fiscal Monitor</a>&nbsp;estimates that a significant rise in geoeconomic uncertainty could lead to a public debt increase of approximately 4.5 percent of GDP in the medium term.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2025/04/23/rising-global-debt-requires-countries-to-put-their-fiscal-house-in-order?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2025/04/11470109/fm-chart2_original.png" alt="Chart2"/></a></figure>



Tighter and more volatile financial conditions in the United States may have ripple effects on emerging markets and developing economies, leading to higher financing costs. This significantly impacts commodity prices, resulting in lower prices and heightened price volatility. Limited fiscal improvements may further heighten risks from rising interest rates, especially as many countries have substantial financing needs. High interest rates could limit essential spending on social programs and public investments. Additionally, reduced foreign aid, due to shifting priorities among advanced economies complicates financing for low-income countries.



Complex policy tradeoffs



In an uncertain and rapidly changing world,&nbsp;countries will need to first and foremost put their own fiscal house in order. This means implementing prudent policies within robust fiscal frameworks to build public confidence and help reduce uncertainty.



Fiscal policy should prioritize reducing public debt and establishing and widening buffers to address spending pressures and economic shocks. This means finding the right balance between adjustment and supporting economic growth, tailored to each country&#8217;s unique situation, available resources, and overall economic conditions.



Countries with limited room in government budgets should implement gradual and credible consolidation plans and allow automatic stabilizers, like unemployment benefits, to work effectively. Any new spending needs should be offset by spending cuts elsewhere or new revenues. For countries with greater fiscal flexibility, it is important to utilize available resources judiciously within well-defined medium-term plans. Fiscal support for businesses and communities impacted by severe trade dislocations should be both temporary and targeted, with a strong emphasis on transparency and effective cost management.



More generally, advanced economies should tackle issues related to aging populations by reprioritizing spending, advancing pension and healthcare reforms, and broadening the tax base. In emerging and developing economies, enhancing the tax system is crucial due to historically low revenues. Low-income developing countries should stay the course on fiscal adjustments given financing challenges. Timely and orderly debt restructuring alongside such adjustments is essential for countries facing debt distress.



Additionally, fiscal policy, alongside other structural policies, should focus on enhancing potential growth. This can help ease challenging tradeoffs between growth and debt sustainability. For instance, well-designed&nbsp;<a href="https://www.imf.org/en/Blogs/Articles/2025/04/16/how-to-build-public-support-for-energy-subsidy-and-pension-reforms?utm_medium=email&amp;utm_source=govdelivery">pensions and energy subsidy reforms</a>&nbsp;can generate savings that can be used to support social programs and infrastructure investments.



As significant policy changes and heightened uncertainty reshape the global economic landscape, the fiscal outlook has worsened. To effectively navigate these challenges, governments should focus on building public trust, ensuring fair taxation, and managing resources wisely. By doing so, they can foster resilience and promote sustainable growth in uncertain times.



—This blog is based on Chapter 1 of the April 2025 Fiscal Monitor,&nbsp;“<a href="https://www.imf.org/en/Publications/FM/Issues/2025/04/23/fiscal-monitor-April-2025?cid=bl-com-SM2025-FMOEA2025001&amp;utm_medium=email&amp;utm_source=govdelivery">Fiscal Policy under Uncertainty.</a>”

blog2099x600fm-ch1-rising-global-debt-requires-countries-to-put-their-fiscal-house-in-ordercimf-phot

Rising Global Debt Requires Countries to Put their Fiscal House in Order

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="234" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600weo-ch1-fostering-core-government-bond-market-resiliencecimf-photopaige-taylor-white-820x234.jpg" alt="" class="wp-image-612691" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600weo-ch1-fostering-core-government-bond-market-resiliencecimf-photopaige-taylor-white-820x234.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600weo-ch1-fostering-core-government-bond-market-resiliencecimf-photopaige-taylor-white-300x86.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600weo-ch1-fostering-core-government-bond-market-resiliencecimf-photopaige-taylor-white-160x46.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600weo-ch1-fostering-core-government-bond-market-resiliencecimf-photopaige-taylor-white-768x220.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600weo-ch1-fostering-core-government-bond-market-resiliencecimf-photopaige-taylor-white-1536x439.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/blog2099x600weo-ch1-fostering-core-government-bond-market-resiliencecimf-photopaige-taylor-white-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Credit: IMF Photo/Paige Taylor White</figcaption></figure>



The global economic system under which most countries have operated for the last 80 years is being reset, ushering the world into a new era. Existing rules are challenged while new ones are yet to emerge. Since late January, a flurry of tariff announcements by the United States, which started with Canada, China, Mexico and critical sectors, culminated with near universal levies on April 2. The US effective tariff rate surged past levels reached during the Great Depression while counter-responses from major trading partners significantly pushed up the global rate.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2025/04/22/the-global-economy-enters-a-new-era?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2025/04/11459120/weo-chart-1_original.png" alt="two charts showing effective average tariff rates in the United States from 1825-2025"/></a></figure>



The resulting epistemic uncertainty and policy unpredictability is a major driver of the economic outlook. If sustained, this abrupt increase in tariffs and attendant uncertainty will significantly slow global growth. Reflecting the complexity and fluidity of the moment, our report presents a range of forecasts for the global economy.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2025/04/22/the-global-economy-enters-a-new-era?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2025/04/11459126/weo-chart-2_original.png" alt="bar chart showing real GDP growth in three different scenarios"/></a></figure>



<a href="https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025?cid=bl-com-SM2025-WEOEA2025001&amp;utm_medium=email&amp;utm_source=govdelivery">Our World Economic Outlook</a>’s&nbsp;reference forecast&nbsp;includes tariff announcements between February 1 and April 4 by the US and countermeasures by other countries. This reduces our global growth forecast to 2.8 percent and 3 percent this year and next, a cumulative downgrade of about 0.8 percentage point relative to our January 2025 WEO update. We also present a global forecast excluding the April tariffs (pre-April 2 forecast). Under this alternative path, global growth would have seen only a modest cumulative downgrade of 0.2 percentage point, to 3.2 percent for 2025 and 2026. Finally, we include a model-based forecast incorporating announcements made after April 4. Over that period, the United States temporarily halted most tariffs while raising those on China to prohibitive levels. This pause, even if extended indefinitely, does not materially change the global outlook compared to the reference forecast. This is because the overall effective tariff rate of the United States and China remains elevated even if some initially highly tariffed countries will now benefit, while policy-induced uncertainty has not declined.



Despite the slowdown, global growth remains well above recession levels. Global inflation is revised up by about 0.1 percentage point for each year, yet the disinflation momentum continues. Global trade was quite resilient until now, partly because businesses were able to re-route trade flows when needed. This may become more difficult this time around. We project that global trade growth will dip more than output, to 1.7 percent in 2025—a significant downward revision since our January 2025 WEO Update.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2025/04/22/the-global-economy-enters-a-new-era?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2025/04/11459129/weo-chart-3_original.png" alt="two charts showing global growth and inflation forecast change from January 2025"/></a></figure>



However, the global estimate masks substantial variation across countries. Tariffs constitute a negative supply shock for the implementing jurisdiction, as resources are reallocated towards the production of less-competitive items with a resulting loss of aggregate productivity and higher production prices. In the medium term, we can expect tariffs to decrease competition and innovation and increase rent-seeking, further weighing on the outlook.



In the United States, demand was already softening before the recent policy announcements, reflecting greater policy uncertainty. Under our April 2 reference forecast, we have lowered our US growth estimate for this year to 1.8 percent. That’s 0.9 percentage point lower than January, and tariffs account for 0.4 percentage point of that reduction. We also raised our US inflation forecast by about 1 percentage point, up from 2 percent.



For trading partners, tariffs are mostly a negative demand shock, driving foreign customers away from their products, even if some countries can benefit from the trade diversion. Consistent with this deflationary impulse, we have lowered our China growth forecast for this year to 4 percent, a 0.6 percentage point reduction, and inflation&nbsp;is&nbsp;revised down by about 0.8 percentage point.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2025/04/22/the-global-economy-enters-a-new-era?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2025/04/11459145/weo-chart-4_original.png" alt="two charts showing tariffs effects on forecast changes in growth and core inflation for US and China"/></a></figure>



Growth in the euro area, which is subject to relatively lower effective tariffs, is revised down by 0.2 percentage point, to 0.8 percent. Both in the euro area and China, stronger fiscal stimulus will provide some support this year and next. Many emerging market economies could face significant slowdowns depending on where tariffs settle. We have lowered our growth forecast for the group by 0.5 percentage point, to 3.7 percent.



Dense global supply chains can magnify the effects of tariffs and uncertainty. Most traded goods are intermediate inputs that cross borders multiple times before being turned into final products. Disruptions can propagate up and down the global input-output network with potentially large multiplier effects, as we saw during the pandemic. Companies facing uncertain market access will likely pause in the near term, reduce investment and cut spending. Likewise, financial institutions will reassess borrowers’ exposure. The increased uncertainty and tightening of financial conditions could well dominate the short term, weighing on economic activity, as reflected in the sharp decline in oil prices.



The effect of tariffs on exchange rates is complex. The United States, as the tariffing country, may see its currency appreciate as in previous episodes. However, greater policy uncertainty, dimmer US growth prospects, and an adjustment in the global demand for dollar assets—that has so far been orderly—can weigh down on the dollar, as we saw since the tariff announcements. In the medium term, the dollar may depreciate in real terms if the tariffs translate into lower productivity in the US tradable goods sector, relative to its trading partners.



Risks to the global economy have increased, and worsening trade tensions could further depress growth. Financial conditions could tighten further as markets react negatively to the diminished growth prospects and increased uncertainty. While banks remain well capitalized overall, financial markets may face more severe tests.



Growth prospects could, however, immediately improve if countries ease their current trade policy stance and forge new trade agreements. Addressing domestic imbalances can, over a period of years, offset economic risks and raise global output while contributing significantly to closing external imbalances.&nbsp; For Europe, this means spending more on infrastructure to accelerate productivity growth. It also means boosting&nbsp;<a href="https://www.imf.org/en/Blogs/Articles/2024/09/12/trade-balances-in-china-and-the-us-are-largely-driven-by-domestic-macro-forces?utm_medium=email&amp;utm_source=govdelivery">support for domestic demand</a>&nbsp;in China, and stepping up fiscal consolidation in the United States.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2025/04/22/the-global-economy-enters-a-new-era?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2025/04/11459182/weo-chart-5_original.png" alt="chart showing current account balance scenarios for US and China "/></a></figure>



Our policy recommendations call for prudence and improved collaboration. The first priority should be to restore trade policy stability and forge mutually beneficial arrangements. The global economy needs a clear and predictable trading system addressing longstanding gaps in international trading rules, including the pervasive use of non-tariff barriers or other trade-distorting measures. This will require improved cooperation.



Monetary policy will also need to remain agile. Some countries may confront steeper trade-offs between inflation and output. In others, inflation expectations may become less-well anchored, with a new inflation shock following closely after the prior one. Countries that encounter resurgent price pressures will require forceful monetary tightening. For others, the negative demand shock will warrant lower policy rates. Monetary policy credibility will be important in all cases, and central bank independence remains a cornerstone.



The increased external volatility from tariff adjustments and a possibly prolonged risk-off environment, may be difficult to navigate for emerging markets. Our&nbsp;<a href="https://www.imf.org/en/Topics/IPF-Integrated-Policy-Framework?utm_medium=email&amp;utm_source=govdelivery">Integrated Policy Framework</a>&nbsp;emphasizes that it is important to let currencies adjust when driven by fundamental forces, as is the case now, and spells out the specific conditions where it is advisable for countries to intervene.



Fiscal authorities face&nbsp;<a href="https://www.imf.org/en/Blogs/Articles/2024/03/28/the-fiscal-and-financial-risks-of-a-high-debt-slow-growth-world?utm_medium=email&amp;utm_source=govdelivery">starker trade-offs</a>&nbsp;with high debt, low growth and rising financial costs. Most countries still have too little fiscal space and need to implement gradual and credible consolidation plans, while some of the poorest countries, also hit with reduced official aid, could experience debt distress.



New spending needs are further weighing on fiscal fragilities. Calls for support will increase for those at risk of severe dislocation from the shocks. Such support should remain narrowly targeted and incorporate automatic sunset clauses. The experience of the last four years suggests that it is easier to open the tap of fiscal support than to close it.



Some countries, especially in Europe, face new and permanent increases in defense-related spending. How should these be financed? For countries with sufficient fiscal space, only the temporary part of the additional spending—that is, temporary support to help adapt to the new environment or the initial bulge in spending to rebuild defense capabilities—should be financed by debt. For all other countries, new spending needs should be offset by spending cuts elsewhere or new revenues.



We should not lose sight of the need for stronger growth. Governments should continue to engage in fiscal and structural reforms that help mobilize private resources and reduce resource misallocation. They should also invest in the digital infrastructure and training necessary to benefit from new technologies such as artificial intelligence.



Finally, we should ask ourselves why our global system warrants remapping—and recognize that decades of deepening trade ties fostered rapid but uneven economic growth. In many advanced economies, there is an acute perception that globalization unfairly displaced many domestic manufacturing jobs. There is some merit to these grievances, even if the share of manufacturing employment in advanced economies has been in a secular decline in countries running trade surpluses, like Germany, or deficits, like the United States.



The deeper force behind this decline is technological progress and automation, not globalization: in both countries the output share of manufacturing has remained stable. Both forces are ultimately beneficial but can be very disruptive to individuals and communities. It is a collective responsibility to&nbsp;<a href="https://www.imf.org/en/News/Articles/2025/04/17/sp041725-spring-meetings-2025-curtain-raiser?utm_medium=email&amp;utm_source=govdelivery">ensure the right balance</a>&nbsp;between the pace of progress or globalization and addressing the associated dislocations.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2025/04/22/the-global-economy-enters-a-new-era?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2025/04/11459185/weo-chart-6_original.png" alt="chart showing output and employment share for Germany and United States"/></a></figure>



This requires that policymakers think well beyond the reductive lens of compensating transfers between ”winners” and ”losers,” be it of technological revolutions or globalization. In this, unfortunately not enough has been done, pushing many to embrace a zero-sum worldview whereby the gains of some only come at the expense of others. Instead, it is important to better understand these root causes so that we can build an improved trading system that delivers more opportunities. This objective is enshrined in our&nbsp;<a href="https://www.imf.org/external/pubs/ft/aa/?utm_medium=email&amp;utm_source=govdelivery">Articles of Agreement</a>, which ask us “to facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income.”



Global integration is not an objective in and of itself. It is a means to an end, important insofar as it supports improved living standards for all.



—This blog is based on Chapter 1 of the April 2025 World Economic Outlook, “<a href="https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025?cid=bl-com-SM2025-WEOEA2025001&amp;utm_medium=email&amp;utm_source=govdelivery">Policy Uncertainty Tests Global Resilience.</a>”

blog2099x600weo-ch1-fostering-core-government-bond-market-resiliencecimf-photopaige-taylor-white

The Global Economy Enters a New Era

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="410" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AFREXIMBANK-HQ-scaled-1-820x410.webp" alt="" class="wp-image-536730" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AFREXIMBANK-HQ-scaled-1-820x410.webp 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AFREXIMBANK-HQ-scaled-1-300x150.webp 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AFREXIMBANK-HQ-scaled-1-160x80.webp 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AFREXIMBANK-HQ-scaled-1-768x384.webp 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/AFREXIMBANK-HQ-scaled-1.webp 1024w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via Flickr</figcaption></figure>



This Thursday, Nigeria will witness the opening of the first Afreximbank African Trade Centre (AATC), a state-of-the-art twin nine-storey office and business hotel complex.



Putting sustainability first, this world-class facility designed to transform Africa’s trade and investment landscape incorporates the very best of green-certified architecture, aligning with global environmental standards.



They say that perception matters. The Abuja AATC offers a new perspective to creating clusters that will help cement business opportunities, change mindset and elevate the business environment across our continent.



Why does this commercial development matter? It does because as the first of many across Africa, it will create new benchmarks in real estate and in corporate workspaces.



The development has an office tower and a 148-bed bespoke four-star business hotel. Boasting top-tier business and trade facilities, it will provide dedicated spaces for trade exhibitions, SME incubation, and conference and business amenities.



Our bank’s model of developing integrated trade services hubs is unique, and one that will be replicated at scale across Africa because the continent needs models that are scalable and replicable.



Our institution was created to provide counter-cyclical support and to drive the transformation of our continent through, amongst others, greater trade.



Our forefathers have been calling for economic self-reliance. These trade centres are going to be hubs for business, fostering innovation and empowering small businesses as well as enhancing global trade participation.



The journey to the launch of the Abuja AATC began in 2018 when the idea of creating trade facilitation hubs in key commercial capitals across Africa was first mooted.&nbsp; Nine leading commercial cities were selected to host the network of AATCs across Africa and the Caribbean. They include Abuja (Nigeria), Harare (Zimbabwe), Kampala (Uganda), Cairo (Egypt), Abidjan (Cote d’Ivoire), Yaoundé (Cameroon), Kigali (Rwanda), Tunis (Tunisia) and Bridgetown (Barbados).



Having received land from Nigeria and Zimbabwe respectively, the projects were launched in November 2021 and September 2022 in Abuja and Harare respectively. Four years later, the Abuja AATC is changing the Abuja cityscape and in August this year, the Harare-AATC will be formally opened too. Construction of the Kampala AATC commenced in November 2024, while the Cairo AATC is planned for September 2025.



These are examples of successful Public-Private Partnerships, working with government, investors and a multilateral development bank. These developments also help us deliver on the vision of our founders to provide bespoke financing solutions and advisory services for the expansion, diversification, promotion and development of Intra- and extra-African trade.&nbsp;



But why the Caribbean you will ask? The Barbados AATC will serve as an authentic beacon of trade by embodying the ambition, resilience, and influence of leading commercial cities in Africa and the Caribbean as well as a dynamic focal point for commerce by fostering regional and global trade connections between Africa and the greater CARICOM region, that comprises 20 countries.



To echo our president, Prof Benedict Oramah, the Barbados AATC will serve as the gateway for Afri-Caribbean trade and investments, creating opportunities for doing business with the Caribbean and for Caribbeans doing business in Africa. Something we have termed the Global Africa narrative.



In an increasingly fragmented world, building bridges is important because the last few years have shown that self-reliance is not only a solution, but an imperative.



This $180 million investment is expected to be completed in 2028. It will create 300 permanent jobs, boost the supply of hotel rooms in Barbados, a country dependent on tourism income and it will also host our CARICOM headquarters. Other facilities include a conference centre, a Small and Medium Enterprises (SME) incubator, a Digital Trade Gateway, a trade and exhibition centre.



Actions matter. Our role is to catalyse investment, trade and development and clusters have proven effective means of catalysing ideas and business opportunities.



The Abuja AATC will be seen as a test case for the viability of the idea and dream of business clusters as catalysts for growth and employment and empowerment.

AFREXIMBANK-HQ-scaled-1

Afreximbank African Trade Centres, catalysing business across Africa and the Caribbean

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="473" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Africa_Opportunity-820x473.jpg" alt="" class="wp-image-606896" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Africa_Opportunity-820x473.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Africa_Opportunity-300x173.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Africa_Opportunity-156x90.jpg 156w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Africa_Opportunity-768x443.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Africa_Opportunity.jpg 1026w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Fred Olayele , Ameenah Gurib-Fakim , and Thomas Svanikier</figcaption></figure>



The global system is in uncharted territory, with decades-worth of events rapidly unfolding&nbsp; in a matter of weeks. America’s focus on reshaping supply chains to secure more favorable trade terms through the imposition of tariffs on various trading partners, including traditional allies, is sending shockwaves across regions and key industries.



From technological change and geopolitics to demographic shifts and geoeconomic reconfiguration, the global business landscape is unfolding rapidly. The ongoing cultural and structural shifts will have major implications for global trade and development. Not only will this protectionist stance and transactional style of economic nationalism unfolding across the world alter resource mobilization patterns, but the effects will also reverberate in the global business landscape for decades.



Quo vadis Africa?



Indeed, Africa stands at a pivotal juncture. To thrive under the emerging multipolar world order, nations and corporations must adapt and find ways to update existing political, economic, and technological playbooks. Nowhere is this more important than in Africa. To the extent that the evolving global landscape is expected to shape global private capital allocation for decades to come, complacency is not an option.



With a growing middle class, abundant natural resources, underexploited frontier markets, enormous demographic advantages, and its ongoing digital transformation, Africa holds enormous potential as a future economic and geopolitical powerhouse.



Business leaders and policymakers on the continent must devise a coherent and coordinated resource mobilization strategy that can help Africa to maximize its share of global capital flows.



<a href="https://www.mckinsey.com/mgi/our-research/geopolitics-and-the-geometry-of-global-trade">A 2024 report by McKinsey</a> corroborates how future trade reconfiguration could help drive the investment attraction efforts of emerging and developing economies. Since 2010, about 60% of greenfield investment has flowed into developing economies, albeit the direction of capital flows is shifting.  The paper notes that “The largest leaps in the past two years were in Africa and India,” and these shifts involve varying trade-offs vis-à-vis geopolitical distance versus trade concentration.



To succeed, African countries and transnational firms need a clear understanding of the potential trade-offs of the different paths ahead. Given its young population and the ongoing digital revolution, connecting the continent to maximize its participation in global capital markets may shape the future of global commerce.



The private capital imperative



From Cairo to Cape Town, and from Lagos to Nairobi, the rise of the digital knowledge economy is generating a lot of hope for economic modernization across the continent. The ongoing global configuration points to a private capital-centric future in which traditional global development financing takes a back seat.



As digital entrepreneurship matures in Africa, capital allocators and other players in the global institutional investment industry across multiple regions can become key partners in fostering venture capital and entrepreneurial ecosystems. This will support growth-stage companies from the continent as they expand into global markets, in addition to nurturing existing established businesses as they adapt and innovate.



Relatively small and dispersed stock exchanges pose an exit challenge for private investors. Opportunities abound in Africa for institutional and retail investors interested in alternative investment opportunities for better returns and greater diversification. However, despite financial deepening and rapid digitalization, stock markets across the continent remain small and highly illiquid, with limited digital infrastructure.



Apart from making them unattractive to global investors, this limits greater liquidity and global visibility. Building a framework that creates an interconnected financial ecosystem that offers varied options for exits – while allowing key parties to maximize value without relying solely on local stock exchanges – has never been more important.



With the emergence of multiple power centres and rising regional tensions, African leaders must rethink and devise a pragmatic and fit-for-purpose resource mobilization strategy. A paradigm which prioritizes the development of capital markets for long-term financing, while also fostering the growth of equity markets for seamless access to capital to drive entrepreneurship and innovation.



If well leveraged, the ongoing shifts and retreat from deeply integrated global systems could open the floodgates of private capital inflows as international investors take advantage of the huge investment opportunities in Africa. To find success, a business-as-usual approach will not work. This opportunity must not be wasted.



The elephant in the room



Undeniably, foreign private investment in Africa faces several bottlenecks. From currency volatility due to fluctuating commodity prices to exchange rate risk and concerns about expropriation due to political instability, the apathy on the part of investors is genuine and logical in many cases. However, knowledge about specific private investment opportunities on the continent is limited in much of the developed world in many cases, leading to high transaction costs, asset mispricing, and missed opportunities.



For instance, the persistent negative perception of Africa as a risky investment destination in the Western world remains a deterrent. If not frontally addressed, this infamous badge of honor will continue to limit the continent’s ability to maximize its share of global capital flows.



Also, limited enterprise size poses a major challenge. As noted in <a href="https://www.economist.com/special-report/2025/01/06/africa-has-too-many-businesses-too-little-business">a recent piece by The Economist</a>, “Africa has too many businesses, too little business.” The obsession with micro-enterprises and informal workers without access to financing, markets, or regulatory support will not produce the kind of impact needed to deliver successful change.



To fix the continent’s unattractive investment environment and close the large economic gap between it and the rest of the world, Africa needs more large enterprises with the capacity to achieve productivity gains. Private capital must be front and centre of the debate.



Concluding thoughts



The ongoing global reconfiguration presents a once-in-a-lifetime opportunity to position Africa as the next great economic frontier. Will Africa seize the moment? As Albert Einstein famously said, “In the midst of every crisis, lies great opportunity.”



Seizing the moment will go a long way in addressing agelong structural imbalances that have hampered development for decades, in addition to maximizing the continent’s share of capital flows in the emerging multipolar world order. Ellen Johnson Sirleaf beckons: “If your dreams do not scare you, they are not big enough.”



Fred Olayele, founder and chairman of New York-based pan-African private investment firm, ECANY Capital, is a global economist, professor, and innovation leader.



Ameenah Gurib-Fakim, the 6th and first female president of the Republic of Mauritius, is a professor, entrepreneur, and biodiversity scientist.



Thomas Svanikier, founder and chairman of Svani Group and Africa Capital Ltd, the largest shareholder of Fidelity Bank Ghana Ltd, is a Ghanaian&nbsp;entrepreneur and philanthropist.

Africa_Opportunity

The Africa Opportunity: A Global Private Capital Imperative

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-820x547.jpg" alt="" class="wp-image-581989" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: U.S. President Donald Trump speaks to an audience at the &#8220;American Freedom Tour&#8221; event in Memphis, Tennessee, U.S., June 18, 2022. REUTERS/Karen Pulfer Focht/File Photo</figcaption></figure>



President Donald Trump in recent weeks has changed his tariff policies more often than some of us change our clothes. The velocity of tariff changes has probably provoked a few nervous breakdowns in the accounts department of American companies trading goods with Mexico and Canada. So far, the African continent has been largely unaffected. The question ahead of 2 April, Trump’s “liberation day”, when he unveils his tariff plans, will we still be so relaxed?



We think the continent can, mostly, relax.



<h1 class="wp-block-heading" id="h-what-does-the-trump-administration-want-to-achieve-with-his-trade-war">What does the Trump administration want to achieve with his trade war?</h1>



Many are still unsure what the Trump administration’s goal is with tariffs.



Why does it matter? Because it means analysis of the potential tariffs on 2nd April are over-complicating the issue. There is too much focus on scenarios like “reciprocal tariffs” (the US will match the tariffs others use against the US), or “including VAT tariffs” (because of the potential US stance that value-added tax act as a de facto tariff).



For reasons we outline below – in this piece we consider just three scenarios.



<ol style="list-style-type:upper-alpha" class="wp-block-list">
<li>The US tariffs everybody</li>



<li>The US tariffs everybody who runs a trade surplus with the US, and</li>



<li>The US tariffs everything except commodities that the US imports.</li>
</ol>



One political consultancy last week told us that the US wants to use the threat of tariffs as leverage for others like the EU or India to cut their tariffs. In the end, tariff threats today may lower global tariffs and therefore boost global trade. We think this is the US Treasury secretary’s hope; however, it does not reflect the rhetoric of the President. We believe this outcome is highly optimistic.



Others focus on the US President’s fond reminisces about the 19th century when tariffs were responsible for most US government revenues, and his hope that tariffs will fund tax cuts. This position ignores the fact that US government spending was less than 10% of GDP in the 19th century, while today it is over 30% of GDP. Tariffs cannot possibly replace income taxes, but yes, at the margin it may help the deficit.



Another view is that the current administration genuinely believes it can create a manufacturing renaissance in the US, with American sweatshops of the 19th century rising again and displacing imports from Asia or Africa. We will be a little surprised if Americans want to compete with the $100-$200 monthly wages of Bangladesh. We also note that in President Trump’s first term, foreign direct investment in the US fell, so the policy did not work.



Our reading of the President’s biographies suggests his tariff views might be viewed as deeply personal. President Trump hates weakness and sees deficits as a weakness which might infect the US. As such, the focus is rarely on the service sector, where the US runs a surplus, but only about trade where it runs a deficit. The current policy stance might not recognise that buying cheap t-shirts from abroad allows Americans work in higher value-added jobs at Google and saves them money so they can spend more at home. As imports are a



small share of the US economy, the import bill is not greatly negative. We pencil in the assumption that the US imposes 10% tariffs but recognise this may be just against countries who have a trade surplus with the US.



<h1 class="wp-block-heading" id="h-who-does-the-us-have-a-trade-deficit-with">Who does the US have a trade deficit with?</h1>



If there is one African country that should be more worried than most, it is South Africa. They are not having it easy, given the cabal of South African immigrants whispering into the US President’s ear. It is perhaps bad timing for South Africa to have a $9bn trade surplus with the US. South Africa’s potential exclusion from AGOA and an inclusion of 10% tariffs both seem eminently plausible.



The next three countries in the proverbial firing line are Nigeria, Algeria and Angola.



Two of the Trump administration’s favourite African countries, Egypt and Morocco, run deficits with the US, thus if any countries on the continent are going to escape 2nd April unscathed, it should be these two. Indeed, over half the continent can argue the case that they run deficits with the US. It wouldn’t surprise us if they are untouched.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1134" height="603" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1.png" alt="" class="wp-image-604880" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1.png 1134w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1-300x160.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1-820x436.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1-160x85.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1-768x408.png 768w" sizes="auto, (max-width: 1134px) 100vw, 1134px" /></figure>



The commodity experts have noticed that the US is running the biggest trade deficits with Africa’s biggest commodity exporters. Over half of South Africa’s exports to the US are precious metals, diamonds, jewelry and platinum. The vast majority of Nigeria, Algeria and Angola’s exports are oil.



Is the US administration so focused on signaling strength as to tariff the commodities that US industry wants, or the US oil industry refines so it can sell back to Africa?



Yes.



The US has already begun an investigation into copper, which might see tariffs enacted on that mineral. This is why copper prices are surging in recent weeks, as stockpiles are built up, just in case. While there was talk of a lower 10% tariff being imposed on Canadian oil vs 25% on Canada’s other exports, in the end this did not happen.



Does it really matter to an oil exporter if the US imposes tariffs? Not much.



Exporters can divert their oil to any other country. The same will be true of most commodities.



<h1 class="wp-block-heading">How important is the US as an export destination for any African country?</h1>



The US does not trade much with Africa. It imported $39bn of goods in 2024, which is roughly what it imports from Mexico or Canada in just over a month. The US imports more in 24 hours from either of them (over $1bn a day), than it imports in a year from about 40 African countries. The biggest exceptions are South Africa and to some extent Nigeria, which account for over half of everything the US imports from the continent.



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Fortunately for most African countries, the US is not that important either. For over half the countries in Africa, the US accounts for 2% or less of total exports.



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Share of exports is however not the right metric. Instead, we need to understand how open an economy is, by examining how high exports are as a proportion of GDP. So, the best metric is to look at “exports to the US” as a share of the exporting country’s GDP.



When we do this, we find it is Lesotho which gets hit hardest. Its exports to the US are equivalent to 10% of its GDP. That’s particularly unfair because Trump doesn’t believe anyone has even heard of <a href="https://x.com/khayadlanga/status/1897215513270608284">Lesotho.</a>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1149" height="559" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4.png" alt="" class="wp-image-604883" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4.png 1149w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4-300x146.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4-820x399.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4-160x78.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4-768x374.png 768w" sizes="auto, (max-width: 1149px) 100vw, 1149px" /></figure>



How much pain would be imposed by 10% US tariffs. We should assume that US retailers may cut their margins by a 2-3%, and Lesotho exporters may do the same. Together that could halve the impact of the tariffs. We might see some currency weakness against the US dollar – even just 5% would then offset the remaining impact.



We can be more bearish and suggest 10% tariffs cut exports to the US by 5% and being extra bearish, assume that countries cannot re-direct their exports elsewhere. For Lesotho, that would cut GDP by about 0.5%, but it is an extreme and unlikely scenario. For South Africa, that would be an impact worth 0.2% of GDP (5% of the 4% of GDP figure above). For Nigeria, the impact would be half this at 0.1% of GDP. But this is surely an exaggeration, because Nigerian oil can be sold elsewhere.



<h1 class="wp-block-heading">What about indirect effects of Trump’s trade wars?</h1>



Should anyone worry about the Trump administration’s tariffs? Yes. There are 14 countries (excluding a few tiny islands) where exports to the US as a share of GDP are higher than Lesotho. Mexico and Vietnam have 27% of their GDP coming from exports to the US. A worst-case 5% hit to that figure from 10% tariffs would strip 1.35% off economic output.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1150" height="440" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5.png" alt="" class="wp-image-604884" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5.png 1150w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5-300x115.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5-820x314.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5-160x61.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5-768x294.png 768w" sizes="auto, (max-width: 1150px) 100vw, 1150px" /></figure>



This would be more painful if tariffs are higher than 10%. For the EU and China, we think there will be (tariffs on China have already been hiked to 20% since Trump took office in January). Germany, still one of the world’s top 5 economies could suffer more if the tariffs imposed on the EU are around 25%. If exports drop 10-15%, that might be a 0.4% of GDP hit. We know Germany is planning on a fiscal bazooka to lift its economy and balance the effect of tariffs. GDP growth is likely to accelerate versus the pre-Trump baseline, even if he imposes 25% tariffs; so, Germany may buy more from the rest of the world, including Africa. What about China, where the Trump administration has talked about 50-60% tariffs? Only 2% of China’s GDP comes from exports to the US, so an absolute worst-case scenario would not see more than 0.5% of GDP taken off China’s growth, and China is promising fiscal stimulus too. Any slowdown in China would matter more to Africa. The share of South African exports going to China is double that going to the US. It does not look likely that US tariffs will cause a very high amount of pain to China, or to its trading partners.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1124" height="605" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6.png" alt="" class="wp-image-604885" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6.png 1124w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6-300x161.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6-820x441.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6-160x86.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6-768x413.png 768w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



Nonetheless, some small indirect impact on Africa is likely to come from Trump’s tariffs. Global trade is likely to be hit, cutting demand for energy, and pushing oil prices down. Even here, we should be cautious. Global trade may just be re-directed as happened in 2018 when China stopped buying soyabeans from the US and bought them from Brazil instead regardless of the longer shipping route. Consequently, US soyabean exports took Brazil’s previous export markets, again probably adding to shipping and fuel costs.



The key point is that the US is not the only economy in town. Yes, it is responsible for half the world’s current account deficit, so it matters, but it doesn’t matter too much to Africa.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1110" height="436" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7.png" alt="" class="wp-image-604886" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7.png 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7-300x118.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7-820x322.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7-160x63.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7-768x302.png 768w" sizes="auto, (max-width: 1110px) 100vw, 1110px" /></figure>



<h1 class="wp-block-heading">What about inflation and US interest rates?</h1>



Should Africa worry because tariffs are inflationary and they might prompt the Fed to raise interest rates, or cut interest rates less than expected?



The last thing we want to see on the continent is more countries running onto the default rocks. From Mozambique to Senegal, we can see that is still a risk. The Fed kind of answered this question last week. They see tariffs as transitory (yes, we have heard that before), because while there will be a one-off adjustment in prices, there should not be a price-wage spiral as we saw after COVID.



That might underestimate where the Trump administration goes with tariffs. Their last trade war did not achieve preset objectives. The deficit with China remained massive. Perhaps this time the target is to succeed via a continuous ramping up of tariffs. We cannot know this, but at least today, we can be comforted by the Fed’s view that tariffs are a negative for GDP growth, and more important than the inflation impact. As such, the FED assumes two fund rate cuts in this year and another two next year.



<h1 class="wp-block-heading">Conclusion</h1>



We cannot be sure if the Trump administration will impose tariffs on any African countries at all, and if he does, he might go after only the minority of countries. We do not believe AGOA will offer any more protection than NAFTA did in 2016, or its successor USMCA has done in 2025. We do think South Africa is likely to face tariffs, and that it will be Lesotho which gets hit hardest if Trump imposes universal tariffs.



Our most important conclusion is that Trump’s tariffs won’t matter too much, assuming they’re just 10% on Africa.



Enjoy April and be thankful you did not emigrate (japa) to tariff-hit Canada.

The African Continent is (relatively) immune to Trump’s tariffs

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HE Nomatemba Tambo, daughter of apartheid activist and former ANC President, O.R. Tambo, is a prominent South African diplomat and politician who served as South Africa’s High Commissioner to the UK between&nbsp;2018-2022.



The first two months of Donald Trump’s presidency have caused <a href="https://www.economist.com/leaders/2025/03/12/trumps-erratic-policy-is-harming-the-reputation-of-american-assets">tumult</a> on the pages of international broadsheets, as commentators struggle to comprehend the structural transformation taking place in the global political order.



But in truth, the new rules of the game have been clear for many years now. We live in transactional world order, where developed nations seek economic and strategic self- interest in their dealings with the developing world.



Africa urgently needs partners that take a long-term view to the continent’s economic development. Over the last five years, the United Arab Emirates (UAE) has come to fill this role more than any other nation.



It was strangely underreported in African media, but in December of last year the UK’s <a href="https://www.theguardian.com/world/2024/dec/24/uae-becomes-africa-biggest-investor-amid-rights-concerns">Guardian</a> newspaper revealed that the UAE had become the largest investor in Africa.



Emirati companies announced $110 billion of projects between 2019 and 2023, outstripping traditional partners China, the United States and European Union. It’s not the volume of investment that’s remarkable, but rather the sectors targeted.



As the United States <a href="https://www.theguardian.com/us-news/2025/mar/12/trump-fossil-fuels-oil-and-gas">returns</a> to oil and gas and China remains <a href="https://www.politico.eu/article/eu-call-on-countries-china-fund-climate-action-cop29-united-nations-climate-conference/">reticent</a> to contributions to a global climate fund, the UAE has emerged as Africa’s most steadfast partner in financing the continent’s transition to the green energy future, with 65% of the $110 billion dollars pledged set to be invested in renewables.



As China scales back the Belt and Road Initiative on the continent amid its slowing economic growth and deepening debt crises in Africa, the UAE has forged forward with investment in critical infrastructure, currently operating or constructing 12 container ports across the continent through Emirati companies like DP World and Abu Dhabi Ports.



As uncertainty prevails over the liquidity of European financial markets, Dubai has emerged as the centre for African firms seeking business and financing. Meanwhile the number of African companies choosing to register in Dubai has <a href="https://www.wam.ae/en/details/1395303061066">grown</a> significantly in recent years.



The UAE’s role is not just limited to economic development. The country has taken an active role in the continent’s diplomacy in recent years, convening the fifth <a href="https://www.mofa.gov.ae/en/mediahub/news/2024/2/6/6-2-2024-uae-somalia">meeting</a> of the Somalia Quint in Abu Dhabi in February last year and jointly hosting a High-Level Humanitarian <a href="https://african.business/2025/02/apo-newsfeed/united-arab-emirates-uae-ethiopia-african-union-au-and-intergovernmental-authority-on-development-igad-hold-high-level-humanitarian-conference-for-the-people-of-sudan-in-addi">Conference</a> on Sudan in Addis Ababa in February.



The SAF’s <a href="https://news.sky.com/story/sudans-recaptured-palace-is-a-significant-sign-of-return-to-order-13333079">seizure</a> of Khartoum’s presidential palace last week underscores the importance of facilitating negotiations between the two parties in Sudan’s destructive conflict, which is already approaching its third year. And when negotiations are finally able to begin in earnest, Emirati financial muscle will be vital to Sudan’s reconstruction.



Africa’s pivot towards the UAE has been evident for years now, but many commentators are yet to catch up. And the structural pressures of current international politics are only likely to incentivise the disengagement of Africa’s historic economic partners from our continent.



Donald Trump has all but committed to an isolationist path, which threatens to undermine the continent’s economic and development ties with the United States. The 90-day freeze on foreign aid and current <a href="https://apnews.com/article/south-africa-ambassador-expelled-trump-rubio-dba7f4c25e5e91480a8429a53b86b8eb">tensions</a> with South Africa are being cautiously observed by African leaders looking to understand the future of US engagement.



Concerns too remain over China’s economic <a href="https://www.bbc.co.uk/news/articles/crr54x00857o">slowdown</a> and stubbornly <a href="https://edition.cnn.com/2025/03/10/economy/china-cpi-deflation-problems-intl-hnk/index.html">persistent</a> <a href="https://edition.cnn.com/2025/03/10/economy/china-cpi-deflation-problems-intl-hnk/index.html">deflation</a>. Political attention in Beijing is, regardless, being diverted to prospects of a fully blown trade war with the United States, leaving little room for China’s leaders to reignite its Africa policy.



The political debate in Europe is already dominated by confrontation with Russia, relegating the importance of engaging in Africa’s economic development to the bottom of the agenda. And the United Kingdom’s decision to <a href="https://www.theguardian.com/politics/2025/feb/25/starmer-planning-big-cuts-to-aid-budget-to-boost-defence-spending-say-sources">axe</a> its foreign aid budget in favour of defence spending is indicative of the calculations being made across European capitals.



Our transactional times will demand forward-thinking policymaking to safeguard our continent’s strategic interests. 



Africa’s priorities must remain those that have occupied its leaders for many a decade: reducing structures of economic dependency on foreign powers and laying the foundations for sustainable growth in the long-term by stimulating domestic production and investing in the continent’s infrastructure.



But the realities of geopolitics mean the nations that will partner with Africa towards this goal are not those that have long been familiar to us.



The UAE is now Africa’s primary development partner, and so it’s time our political debate reflected this.

Image (1)

Africa looks to the UAE for partnership in a transactional world order

4f08e732-14dc-4b25-aebe-12ad36aed4c9_847x407

The problem of organizing weak states; and why Africa needs a new model of Pan-Africanism

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="719" height="480" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/image002.png" alt="" class="wp-image-602043" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/image002.png 719w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/image002-300x200.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/image002-135x90.png 135w" sizes="auto, (max-width: 719px) 100vw, 719px" /><figcaption class="wp-element-caption">UAE officers participated in Operation Jungle Shield, jointly with officers from the Lusaka Agreement Task Force (Credit: UAE Ministry of Interior)</figcaption></figure>



Lt. Col. Dana Humaid, Director General of the International Affairs Bureau, Ministry of Interior, United Arab Emirates. 



Modern criminal networks operate with increasing sophistication, their operations unconstrained by national borders. Law enforcement agencies are rising to meet these challenges through collaborative approaches.&nbsp;&nbsp;



As Director General of the International Affairs Bureau at the UAE Ministry of Interior and Secretary of the International Security Alliance, I&#8217;ve witnessed the remarkable effectiveness of coordinated security responses. Africa stands as an inspiring example of transnational police collaboration—pioneering a model for successfully tackling global crime in our interconnected world.&nbsp;



The evidence for this approach is compelling. Criminal enterprises thrive on the inability of national agencies to coordinate. A trafficker stopped in Lagos reroutes through Mombasa; funds stolen in Johannesburg finance extremism in Mogadishu within hours. Yet when law enforcement agencies pool intelligence and resources, the results are transformative.&nbsp;



Through the International Security Alliance, I have witnessed first-hand how the power of coordinated action can disrupt networks in ways that isolated efforts never could.&nbsp;



Interpol’s Operation Screen West Africa provides a striking example. Over 12 nations united in a joint effort that conducted 1.3 million database checks, unearthing 82 individuals traveling with fraudulent documents and arresting 11 internationally wanted criminals. Drug traffickers, counterfeit medicine suppliers, and stolen vehicle syndicates saw their operations dismantled. These figures translate into real-world security: safer streets, disrupted crime rings, and lives protected.&nbsp;



Technology plays a crucial role. Mobile devices linked to INTERPOL’s databases now allow border officers to verify travelers’ identities against international criminal records in seconds. A once-vulnerable border post is transformed into a security stronghold.&nbsp;&nbsp;



But the true value of such tools lies in sustainable capacity-building, not dependency. The advanced technological training initiatives I have personally overseen focus on equipping police forces with the skills to use these systems effectively, creating long-term security capabilities rather than short-term solutions.&nbsp;



Security collaboration flourishes when built on a foundation of trust, with technology serving as a powerful enabler. African nations have shown remarkable progress in overcoming historical hesitations about international partnerships. When officers train together, share intelligence, and conduct joint operations, they forge professional relationships that transcend political boundaries. In my experience, these human connections are proving just as valuable as the cutting-edge tools they employ—creating a powerful synergy that strengthens security cooperation across the continent.&nbsp;



Protecting the vulnerable is another area where international cooperation is making a real impact. As the overseer of the UAE Ministry’s Child Protection Centre, I have witnessed how well-coordinated global efforts can dismantle human trafficking networks. A recent example is INTERPOL’s Operation Liberterra II, which brought together 15 specialized units from INTERPOL’s General Secretariat, along with partner organizations, national agencies, and NGOs. Through cross-border coordination, the operation rescued 3,200 potential trafficking victims. These are not just statistics—they are lives forever changed.&nbsp;



By fostering relationships between specialized units and enhancing cross-agency collaboration, such operations not only provide immediate relief but also build long-term capacity for countries to tackle these difficult and complex issues.&nbsp;



Environmental crime, too, demands a collaborative response. The Congo Basin, a vital carbon sink, is under assault from illegal logging and poaching. Operation Jungle Shield, a 2024 initiative led by the International Initiative of Law Enforcement for Climate (I2LEC), saw agencies from seven African nations unite to combat environmental destruction. The results: 2,111kg of ivory, 34kg of pangolin scales, and $11.2 million in illicit goods seized; 58 arrests; and the disruption of criminal operations responsible for deforestation equivalent to 728 football fields.&nbsp;



The remarkable success of existing collaborative initiatives provides a strong foundation for even greater achievements ahead. Continued investment in African law enforcement capacity is opening new horizons of possibility. I&#8217;ve witnessed the transformative impact of specialized training—from environmental protection investigations to seaport resilience strategies—empowering officers to confidently tackle emerging threats. INTERPOL&#8217;s Support Programme for the African Union (ISPA) is already delivering impressive results in strengthening transnational crime-fighting capacity, showcasing the tremendous potential for future growth.&nbsp;



The groundwork for a safer, more prosperous Africa is being established through enhanced intelligence-sharing, successful joint operations, and deepening mutual trust. The frameworks are firmly in place, ready to be energized by political will and commitment to extend these capabilities across the continent. As Africa experiences accelerating economic growth, robust security cooperation serves as a catalyst for protecting and amplifying these gains. Secure borders, safe cities, and trusted law enforcement create the ideal environment for investment, trade, and development to flourish.&nbsp;



The vision of an Africa where police agencies collaborate seamlessly, where criminal networks find no refuge, and where citizens move freely without fear is now within our grasp. Realizing this inspiring future requires the continuation of our shared commitment to security excellence. By strengthening cross-border cooperation, leveraging innovative technology, and investing in world-class training, we ensure that Africa&#8217;s security partnerships today will powerfully drive its prosperity tomorrow.&nbsp;

image002

Building a Safer Africa Through Global Police Cooperation

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="414" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/DIL08644-820x414.jpg" alt="" class="wp-image-601712" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/DIL08644-820x414.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/DIL08644-300x152.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/DIL08644-160x81.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/DIL08644-768x388.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/DIL08644-1536x776.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/DIL08644-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



By Ahmed Bin Sulayem, Kimberley Process (KP) Chair 2024 – 2025 and Executive Chairman and CEO of DMCC (Dubai Multi Commodities Centre)



In response to a recent article published on CNBC Africa, titled, <a href="https://cnbcafrica.com/2025/the-kimberley-process-an-illusion-of-ethics/">’The Kimberley Process: An Illusion of Ethics?’</a>, I’ve been compelled to pen a response that not only corrects its false narratives and commentary, but also takes the opportunity to clarify certain underlying facts about the KP’s successes, challenges and responsibilities since its foundation, almost 25 years ago.&nbsp;



Originating in May 2000 in Kimberley, South Africa, as an item on the agenda of the 55th session of the UN General Assembly, the Kimberley Process (KP) was first discussed as a mechanism to mitigate the damaging social effects of the trade in conflict diamonds, and how a framework could be established to reduce these influences. Three years later, the Kimberley Process Certification Scheme (KPCS) was launched as a joint government, industry, and civil society initiative that to date, <a href="https://dmcc.ae/ecosystems/diamonds/kimberley-process">has stemmed the flow of 99.8% of the global production of conflict diamonds</a>.



In the opening paragraph of the ‘Illusion of Ethics’, the writer, Dr. M&#8217;zée Fula-Ngenge, chairman of the African Diamond Council, states that the KPCS “is beset by a confluence of structural, operational, and ethical deficiencies that collectively undermine its legitimacy, efficacy, and relevance within the global diamond industry. These challenges are not merely incidental but are deeply entrenched in the Kimberley Process’ (KP) institutional framework, rendering it ill-equipped to address the evolving demands of ethical sourcing, transparency, and accountability. A critical examination of these issues reveals that the KP’s failures are systemic, necessitating transformative reforms to restore its credibility and ensure its continued relevance.”



Underpinned by United Nations mandate, the KPCS is widely documented as the only successful, collaborative effort to reduce the circulation of conflict diamonds from above 15 per cent in the 1990s, to well under 1 per cent today. Additionally, the KPCS is the only reason for an international framework for regulating the trade of rough diamonds. For these reasons alone, I contest that the KPCS’s significant achievements to date, and its ongoing development have only been possible courtesy of its structural, operational, and ethical strengths, which have demonstrably delivered on its mission of stemming the flow of conflict diamonds into wider circulation – a role it continues to fulfil and refine.



Stating that the KP should be “confronting its limitations, failures, and the broken promise of a ‘Year of Delivery’,” I would like to clarify that 2024 included several significant milestones, namely, the admittance of Uzbekistan as a new KP member, and the readmittance of the Central African Republic to the body following its decade-long ban. The ‘Year of Delivery’ also included the UAE’s initiative of a proof-of-concept for the digitalisation of the KP certification process, one of its key objectives.



The author goes on to cite that the KP’s “inability to address well-documented cases of non-compliance among member states, such as the infiltration of conflict diamonds from regions like the Central African Republic (CAR), demonstrates a systemic failure to enforce its own mandate. This lack of accountability is compounded by operational inefficiencies, including mismanagement and a lack of transparency, which further erode the KP’s credibility.”



As one of the KP’s key accomplishments, it was my personal pleasure to visit the CAR on behalf of the KP in order to fast-track the country’s reintegration in light of an improving security situation – an achievement that was not only widely supported by Jaff Bamenjo of the Civil Society Coalition, but also Feriel Zerouki, President of the World Diamond Council.



Moving onto what Dr. Ngenge referred to as the KP’s “over-reliance on consensus-based decision-making [[which]] exacerbates these issues by stifling critical thinking and suppressing dissenting viewpoints”, while consensus can slow decision-making, it is also what makes the Kimberley Process unique as a rare example of what a truly global multi-stakeholder initiative looks like. Without consensus, the process would risk becoming another top-down regulatory body that lacks the buy-in of key participants, particularly diamond-producing nations in Africa. The Kimberley Process was designed to ensure that all voices are heard, including those from artisanal mining communities. A unilateral approach dictated by a few dominant nations (like the G7) would be far less effective and could potentially alienate the very countries that need the KP the most, i.e., Africa’s diamond-producing nations.



Ngenge’s remaining criticisms can be addressed in a single statement, which can also serve as an important reminder to both diamond industry stakeholders and critics, who remain unclear about the KP’s function.



In brief, Ngenge states that “The economic downturns and shifting consumer preferences have further exposed the KP’s inadequacies in the most unexpected manner”, that the “glaring structural flaws in the KP’s framework is its narrow regulatory scope, which focuses exclusively on rough natural diamonds” and “the KP’s failure to address issues such as smuggling and fraudulent certification.”



It has become common place among detractors to criticise the KP for not being a universal solution for the diamond sector’s global challenges, including, as illustrated by Dr. Ngenge’s comment, what it’s not mandated to do. As a result, I feel this is a timely opportunity to remind the international community that one of the KP’s many key strengths is its function of fitting into a far wider network of organisations that play complementary roles in ethical diamond sourcing.



Let me be absolutely clear: The Kimberley Process was never designed to be a global financial watchdog, an anti-money laundering agency, or a tax enforcement mechanism. Expecting the KP to solve challenges outside its jurisdiction is as illogical as blaming Interpol for failing to regulate corporate tax fraud. Yet, the debate surrounding the KP has taken on an emotional tone, particularly in claims that it is a &#8220;massive greenwashing operation&#8221; or that it &#8220;certifies blood diamonds as legitimate.&#8221; These statements are false and misleading. They do not serve the interests of responsible stakeholders seeking real reform. For the sake of clarity, the Kimberley Process Certification Scheme (KPCS) focuses on the trade of rough diamonds, not polished diamonds. Once rough diamonds are cut and polished, they fall outside the scope of the KPCS.



While I am in admiration of Dr. Ngenge’s commitment to transparency, I am concerned about his promotion of Authentia.io, a yet-to-be-developed traceability platform for which he has claimed to have worked with its developers over the past three-and-a-half years. While this may be true, it indicates a clear conflict of interest, with his ADC standing to gain from its implementation. By positioning the ADC as an authority in diamond traceability while promoting a specific platform, I have several concerns about whether his advocacy is driven by industry ethics or business interests.



Contrary, Dr. Ngenge fails to recognise the Kimberley Process’s recent advances in digitalisation and traceability, particularly through its Verifico platform. Currently in proof-of-concept for digitalisation of the KP, Verifico represents a major step forward in strengthening supply chain integrity by leveraging modern technology. By implementing blockchain and other digital tools, Verifico enhances the tracking and certification of diamonds, making it more difficult for illicit stones to enter the legitimate supply chain. Ignoring this development significantly undermines the credibility of arguments that the KP is outdated or ineffective.



Towards the end of the article, Dr. Ngenge states that “The KP must implement stronger enforcement mechanisms to remove non-compliant members and ensure accountability. This could include the establishment of an independent monitoring body with the authority to investigate and sanction violations, which the ADC is willing to set up and assist with.”



This neatly brings me onto the credibility of Dr. Ngenge and the African Diamond Council.



In the world of African diamond governance, two organisations are often erroneously confused: the African Diamond Producers Association (ADPA) and the African Diamond Council (ADC). While the ADPA is indisputably recognised as the legitimate intergovernmental body for African diamond-producing nations, the ADC remains a lesser-known and often controversial entity. At the centre of the ADC is Dr. Ngenge, a self-proclaimed diamond industry strategist who has made bold claims about his role in shaping the industry, including asserting that he was instrumental in the formation of the DMCC (Dubai Multi Commodities Centre). However, the truth about the ADC, its legitimacy, and Dr. Ngenge&#8217;s claims reveal inconsistencies, self-promotion, and potential vested interests.



The African Diamond Council presents itself as “Africa’s official diamond governing body”, supposedly composed of the heads-of-state from Africa’s diamond-producing countries. It claims to have been founded in January 2000 in Luanda, Angola, with a mission to regulate Africa’s diamond trade. It also frequently positions itself as the supreme authority, even referring to the ADPA as “a continental branch of ADC”. However, no legal or governmental documentation supports this claim.



Unlike ADPA, an intergovernmental body, <a href="https://www.kimberleyprocess.com/observer-groups-and-roles">formally recognised as one of the KP’s Observer Groups</a>, the ADC is not officially acknowledged by any major international regulatory body. It operates as a private advocacy group, relying on self-proclaimed authority rather than government backing. The African Union and other multinational African institutions do not officially recognise the ADC, and there is no evidence of heads-of-state formally convening under the ADC’s leadership.



<a href="https://www.kimberleyprocess.com/observers/african-diamonds-producers-association">The African Diamond Producers Association (ADPA),</a> on the other hand, was officially established in 2006 via the Luanda Declaration and serves as a recognised intergovernmental organisation headquartered in Angola. It consists of the mining ministers from its member states and represents African diamond-producing nations in global forums. It also actively participates in the Kimberley Process, influencing policies that govern the trade of rough diamonds. In total, ADPA includes at least 15 African nations, including major producers such as Angola, South Africa, and Zimbabwe.



In contrast, the ADC has no formal government membership and is not involved in policy-making. Additionally, it isn’t listed as an observer in the Kimberley Process and holds no official standing in diamond trade governance. Its underlying authority and credibility comes almost exclusively from self-published materials and the reputation of its chairman, Dr. Ngenge.



In his capacity as chairman of the ADC, Dr. Ngenge has presented himself as an influential figure in African diamond policy. Previous claims include pivotal roles in:



<ul class="wp-block-list">
<li>The establishment of the Kimberley Process (KP) – he states that he was “Chief Administrative Developer” in 2000 and “Project Launch Team Coordinator” in 2001.</li>



<li>Shaping Dubai’s diamond industry and founding DMCC – he has asserted that he was a “principal trustee and decisive proponent” in forming the DMCC (Dubai Multi Commodities Centre) in 2002.</li>



<li>Advocating for diamond traceability and governance reforms – he promotes the ADC as a leading authority in shaping Africa’s diamond sector.</li>
</ul>



While his involvement in early Kimberley Process discussions may be partially accurate, there is no tangible evidence to support this claim – nor is there any verifiable evidence to support his claims regarding the formation of DMCC.



DMCC (Dubai Multi Commodities Centre) was established in May 2002 by a royal decree issued by Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai. The official DMCC narrative credits Dubai’s leadership and executives, including myself, as the primary forces behind its creation. Nowhere in DMCC’s official records, government statements, or founding documents does Dr. Ngenge’s name appear.



DMCC categorically denies Dr. Ngenge’s involvement in its founding or the establishment of the Dubai Diamond Exchange. Courtesy of these revelations, I am pleased to confirm that Rough &amp; Polished has deleted its reference to Dr. Ngenge&#8217;s false claim about DMCC from the English version of its website.



While I cannot speak for the reasons behind Ngenge’s OpEd, his outspoken criticism coincides with his attempts to participate in the KP’s Intersessional meeting in May 2024, where he was removed by security for attempting to enter closed sessions without verifiable invitation.



In the same way that the KP should be held to account and scrutiny, the industry should also pay close attention to those that criticise it, including their status, credibility, and potential motivations for undermining it. While I will be the first to admit that no organisation is perfect, the KP’s empirical status as the only vehicle of collaborative efficacy in the diamond industry’s global fight against conflict diamonds should not be underestimated, nor disposed of due to ‘room for improvement’.



As we continue with the ‘Year of Best Practice’, I once again look forward to welcoming back all credible members of the diamond community, where we will continue to uphold our mission in stemming conflict diamonds from our global supply chains.

DIL08644

The Kimberley Process: The only demonstrable vehicle of collaborative efficacy in the diamond industry’s global fight against conflict diamonds

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="546" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/Thabani-Ndwandwe-820x546.jpg" alt="" class="wp-image-596999" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/Thabani-Ndwandwe-820x546.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/Thabani-Ndwandwe-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/Thabani-Ndwandwe-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/Thabani-Ndwandwe-768x511.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/Thabani-Ndwandwe-1536x1022.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/Thabani-Ndwandwe-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Thabani Ndwandwe, Chief Risk Officer, Standard Bank</figcaption></figure>



South Africans were eagerly awaiting Finance Minister Enoch Godongwana’s 2025 Budget Speech, hoping for measures to ease financial pressure. However, the budget presents a mixed bag—while it seeks to stabilise government finances, the cost of living is set to rise due to tax changes. The question is: how will this affect the average South African?



Let’s unpack the key changes and what they mean for consumers:



VAT Increase – Higher Prices for Everyday Goods



One of the most notable changes is the increase in Value-Added Tax (VAT), which will rise from 15% to 15.5% on May 1, 2025, with another 0.5% increase coming in 2026.



For consumers, this means everyday goods and services will become more expensive—from electricity and clothing to transport and personal care products. While basic food items remain VAT-exempt and more items were added to VAT- exempt, the reality is that many essentials will see price hikes, adding further strain to household budgets.



This increase will hit low- and middle-income earners the hardest, as VAT is a regressive tax—meaning it takes a bigger proportion of income from the poor than from the wealthy.



Income Tax Bracket Freeze – More Tax Without a Tax Hike



While there is no direct increase in personal income tax rates, the government has not adjusted tax brackets for inflation. This means that as salaries rise due to inflation, many South Africans will be pushed into higher tax brackets, effectively paying more tax without actually earning more in real terms.



Middle-class and working professionals will feel the impact the most, as their take-home pay shrinks despite salary increases.



Fuel Levies – A Small Relief



In a small win for motorists, the general fuel levy and the Road Accident Fund (RAF) levy will remain unchanged for another year, continuing the freeze introduced in 2022. This move provides around R4 billion in tax relief, preventing an even bigger fuel price hike.



Sin Taxes – Alcohol and Cigarettes Just Got Pricier



For those who drink or smoke, the budget brings another annual increase in excise duties:



&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alcohol duties up by 6.75%:



&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A 340ml beer will cost about 15 cents more.



&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A bottle of wine will increase by 38 cents.



&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A 750ml bottle of spirits (whisky, brandy, vodka) will go up by R5.97.



&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tobacco duties up by 4.75% (6.75% for cigars and pipe tobacco):



&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A pack of cigarettes will cost more.



&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Vapes and e-cigarettes are also taxed higher.



The government justifies these increases as a public health measure while raising revenue. However, for consumers, this means that drinking and smoking will take an even bigger chunk of their budgets.



Social Grants – Modest Increases Amid Rising Costs



Millions of South Africans depend on social grants.&nbsp; While grant payments will increase slightly, they may not keep up with food inflation, meaning beneficiaries will still struggle to afford essentials as prices continue to rise.



Public Transport &amp; Infrastructure – Will It Deliver?



The government is allocating R19.2 billion to the Passenger Rail Agency of South Africa (PRASA) to improve train services, alongside an additional R11.8 billion for infrastructure projects.



If these funds are managed efficiently, commuters could benefit from better, cheaper transport options. However, given past mismanagement of infrastructure budgets, accountability will be key to ensuring that South Africans see improvements.



What Should Consumers Do?



Given these changes, South Africans must adapt their financial strategies. Here’s what consumers can do:



<ol class="wp-block-list">
<li>Adjust household budgets – Anticipate higher prices for essentials and non-essentials alike.</li>



<li>Maximize tax savings – Take advantage of tax-free savings accounts, medical aid deductions, and retirement contributions to reduce taxable income.</li>



<li>Monitor fuel and transport costs – If PRASA upgrades succeed, rail transport could be a cheaper alternative to private vehicles.</li>



<li>Consider lifestyle changes – With sin taxes rising, cutting back on alcohol and smoking could save significant money.</li>
</ol>



Final Thoughts: A Tough Year for Consumers



While the government has made some strategic investments, this budget largely increases the financial burden on South Africans through higher VAT, unchanged tax brackets, and rising sin taxes.



For the economy to grow sustainably, South Africa must prioritize job creation, economic growth, and efficient public spending—or risk placing even greater strain on consumers in the years ahead.

Thabani Ndwandwe

How the 2025 Budget Will Impact Consumers: What You Need to Know

<div class="wp-block-image">
<figure class="aligncenter"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4D12AQGZgUKtuFABRg/article-cover_image-shrink_720_1280/B4DZWKXODKG8AQ-/0/1741783123488?e=1747267200&amp;v=beta&amp;t=bYfWpPJC2NYEWFH2eX9eBeyRetdw7Zc7rlfWzUc95yY" alt="Dr M'zée Fula Ngenge, Chairman of African Diamond Council (ADC)"/><figcaption class="wp-element-caption">Dr M&#8217;zée Fula Ngenge, Chairman of African Diamond Council (ADC)</figcaption></figure></div>


Confronting its Limitations, Failures and the Broken Promise of a &#8216;Year of Delivery&#8217;



The Kimberley Process Certification Scheme (KPCS) is beset by a confluence of structural, operational, and ethical deficiencies that collectively undermine its legitimacy, efficacy, and relevance within the global diamond industry. These challenges are not merely incidental, but are deeply entrenched in the Kimberley Process’ (KP) institutional framework, rendering it ill-equipped to address the evolving demands of ethical sourcing, transparency and accountability. A critical examination of these issues reveals that the KP’s failures are systemic, necessitating transformative reforms to restore its credibility and ensure its continued relevance.



At the heart of the KP’s internal challenges lies a leadership crisis characterized by poor decision-making, a lack of strategic vision and instances of unethical behavior at the highest levels of governance. These leadership failures are not isolated incidents, but are symptomatic of a broader institutional culture that prioritizes political expediency over ethical rigor. For example, the KP’s inability to address well-documented cases of non-compliance among member states, such as the infiltration of conflict diamonds from regions like the Central African Republic (CAR), demonstrates a systemic failure to enforce its own mandate. This lack of accountability is compounded by operational inefficiencies, including mismanagement and a lack of transparency, which further erode the KP’s credibility.



It is clear that the KP’s over-reliance on consensus-based decision-making exacerbates these issues by stifling critical thinking and suppressing dissenting viewpoints. While consensus is often lauded as a democratic ideal, in practice, it has led to a culture of complacency and inaction, particularly from KP member states. This is evident in the KP’s repeated failure to adopt meaningful reforms, such as expanding its definition of conflict diamonds to include human rights abuses or implementing robust traceability mechanisms. The result is a certification scheme that is increasingly perceived as outdated, ineffective and out of touch with the realities of the modern diamond industry.



Externally, the KP faces mounting skepticism from consumers, civil society organizations (CSOs), and industry stakeholders, who view its failure to address critical issues as a betrayal of its founding principles. The economic downturns and shifting consumer preferences have further exposed the KP’s inadequacies in the most unexpected manner. Younger generations, in particular, are demanding ethically-sourced and sustainably mined diamonds, with many turning to lab-grown alternatives. This shift in consumer behavior underscores the KP’s inability to adapt to changing market dynamics and its failure to provide credible assurances of ethical sourcing.



The rise of independent certification programs and traceability solutions, such as <a href="http://authentia.io/">Authentia.io</a>, further highlights the KP’s declining relevance. These initiatives, which leverage blockchain technology and other digital innovations, offer greater transparency and accountability than the KP’s outdated self-regulation model. The European Union’s decision to postpone the implementation of stringent diamond traceability requirements until 2026, a delay that has been widely criticized, serves as a stark reminder of the KP’s inability to drive meaningful change within the industry.


<div class="wp-block-image">
<figure class="aligncenter"><a href="https://authentia.io/" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4D12AQG2j4kydPNuOw/article-inline_image-shrink_1000_1488/B4DZWKYVF0GcAY-/0/1741783398305?e=1747267200&amp;v=beta&amp;t=KLwpf60_80J8x5VVifWXIca74B6eVqk2bVqW8x94OcE" alt="Authentia.io"/></a><figcaption class="wp-element-caption">Authentia.io</figcaption></figure></div>


One of the most glaring structural flaws in the KP’s framework is its narrow regulatory scope, which focuses exclusively on rough natural diamonds, while neglecting cut and polished diamonds. This regulatory gap has allowed conflict diamonds to infiltrate the supply chain, undermining the KP’s stated mission of preventing the trade in blood diamonds. The African Diamond Council (ADC) has repeatedly highlighted this issue, noting that participant countries often remain non-compliant while retaining their KP membership. This duality not only undermines the KP’s credibility, but also raises serious questions about its commitment to ethical sourcing.



Moreover, the KP’s failure to address issues such as smuggling and fraudulent certification further erodes its legitimacy. Despite repeated calls for stronger enforcement mechanisms, the KP has consistently failed to take decisive action against non-compliant members. This lack of accountability has created a culture of impunity, in which member states face no meaningful consequences for violating the KP’s guidelines. The ADC’s observation that even self-proclaimed advocates of ethical practices may be complicit in perpetuating the very issues they claim to oppose underscores the need for independent monitoring and oversight.



To restore its credibility and relevance, the KP must undertake a series of comprehensive reforms that address both its internal deficiencies and external challenges. The ineffective certification scheme must expand its definition of conflict diamonds to include human rights abuses, such as forced labor and environmental degradation, which are often associated with diamond mining. This would align the KP’s mandate with contemporary ethical standards and address the growing demand for responsible sourcing. The KP must implement stronger enforcement mechanisms to remove non-compliant members and ensure accountability. This could include the establishment of an independent monitoring body with the authority to investigate and sanction violations, which the ADC is willing to set up and assist with. The KP must adopt digital technologies to enhance transparency and traceability across the entire supply chain. This would not only restore consumer confidence but also provide a credible alternative to independent certification programs. The KP must move beyond self-regulation by member states and establish independent oversight mechanisms to ensure compliance with its guidelines. This would address the inherent conflict of interest that typically arises when member states are responsible for monitoring their own compliance. The KP must engage more effectively with industry stakeholders, including consumers, CSOs and industry professionals, to rebuild trust and foster a culture of accountability. This could include the creation of a multi-stakeholder advisory board to provide input on key decisions.


<div class="wp-block-image">
<figure class="aligncenter"><a href="https://preciousworld.online/" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4D12AQGq0eC9gf5Q_g/article-inline_image-shrink_1500_2232/B4DZWKZJg5HIAc-/0/1741783603907?e=1747267200&amp;v=beta&amp;t=AgL7DkZQbkBJJQtPXyVEd-eyWwQRXGPuQA73ebYHysg" alt=""/></a><figcaption class="wp-element-caption">Precious World Online</figcaption></figure></div>


As I conclude, the current trajectory of the Kimberley Process Certification Scheme (KPCS) is unsustainable. Its failure to address internal deficiencies, adapt to external challenges, and implement meaningful reforms has rendered it increasingly irrelevant in a rapidly evolving industry. The KP’s desperate plea for support letters entwined with the energy currently being exerted to circulate a strategically planned set of activities that are designed to positively impact the scheme&#8217;s reputation or achieve specific objectives will not suffice; only through comprehensive and transformative reforms can the KP hope to regain its credibility and restore confidence among its stakeholders. The time for action is now, as the KP’s continued failure to act will only hasten its decline and further erode trust in the global diamond industry.

1741783123488

The Kimberley Process: An Illusion of Ethics?

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="216" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/south-africa-country-focus-hero-820x216.jpg" alt="" class="wp-image-596892" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/south-africa-country-focus-hero-820x216.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/south-africa-country-focus-hero-300x79.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/south-africa-country-focus-hero-160x42.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/south-africa-country-focus-hero-768x202.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/south-africa-country-focus-hero-1536x405.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/south-africa-country-focus-hero-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



Improving the business environment, strengthening governance, and reforming the labor market are among the keys to economic success&nbsp;&nbsp;



South Africa is well-positioned to confront significant longstanding challenges that have been holding the economy back: declining real per-capital income, persistent unemployment, pervasive poverty, and one of the highest inequality rates in the world. These outcomes reflect deepening structural rigidities and governance weaknesses, evidenced by the negative contribution of Total Factor Productivity to growth over the past 15 years.



A new Government of National Unity, in power since June 2024, has committed to tackle these challenges by providing new impetus to the ongoing structural reforms initiated in 2020.&nbsp;&nbsp;



“We are steadily removing the obstacles to meaningful and faster growth&#8230; [through] economic reforms that we are implementing as part of Operation Vulindlela,” South African President&nbsp;Cyril Ramaphosa&nbsp;recently remarked.&nbsp;Major electricity sector reforms are underway, allowing for private-sector participation in electricity generation, including from renewable sources. Reforms to the logistics sector are also ongoing, allowing for private sector participation in freight rail and port operations. The government is also moving to streamline digital communications regulations and water licensing procedures and modernize the eVisa system.



<figure class="wp-block-image"><img decoding="async" src="https://www.imf.org/-/media/Images/IMF/News/Country-Focus/2025/03/sa-cf-operation-vulindlela-infographic-portrait.ashx?w=1545px" alt=""/></figure>



These reforms are an important step in the right direction—necessary to alleviate binding constraints to growth, but on their own not sufficient to generate the productivity gains needed to put the economy on a path toward permanently higher growth.&nbsp;



To help unlock South Africa’s full growth potential, the&nbsp;<a href="https://www.imf.org/en/Publications/CR/Issues/2025/01/30/South-Africa-2024-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-561414">IMF recommends</a>&nbsp;fully implementing the reforms already underway as well as pursuing a package of further structural reforms:



<ul class="wp-block-list">
<li>Actions to enhance the business environment—by cutting excessive red tape and administrative requirements and ensuring that small and medium enterprises have fair access to markets—are essential to help support entrepreneurship, firm growth, and job creation. </li>
</ul>



<ul class="wp-block-list">
<li>Further efforts to fight corruption, professionalize public administration, and improve the governance of state-owned enterprises are paramount to build trust in public institutions and create a more stable and predictable business climate. </li>
</ul>



<ul class="wp-block-list">
<li>Complementary labor-market reforms to reduce spatial disparities, help young people enter the labor force, and make regulations for small and medium-sized enterprises more flexible are key to durably reduce the high unemployment rate—and particularly crucial with one in three adults and two in three young people out of work.</li>
</ul>



<a href="https://www.imf.org/en/Publications/CR/Issues/2025/01/30/South-Africa-Selected-Issues-561419" target="_blank" rel="noreferrer noopener">Recent IMF analysis</a>&nbsp;suggests reforms halving South Africa’s business regulation, governance, and labor-market gaps relative to peers could increase medium-run output by 9 percent and further boost employment. By raising employment and growth, such reforms are also key to reducing poverty and ensuring the benefits of growth are widely shared. IMF staff estimates that South Africa’s Gini coefficient—a measure of inequality, with higher numbers reflecting higher income disparity—would decline by 10 points, bringing South Africa closer to its peers.



<figure class="wp-block-image"><img decoding="async" src="https://www.imf.org/-/media/Images/IMF/News/Country-Focus/2025/03/SA-Reform-output-chart-v1.ashx?w=1200px" alt=""/></figure>



Building broad social support for reform efforts is essential to achieve their full benefits. Recent IMF analysis highlights that communication and engagement, along with policies to support vulnerable groups, are vital to increase acceptance of reforms. For example, providing information about the cost of electricity in South Africa, which is 68 percent higher than in the US, was found to boost support for electricity reforms by 9 percentage points. Furthermore, providing compensatory support to vulnerable groups affected by the reforms would lead 75 percent ofindividuals initially opposed to reforms to become reform supporters.



While the challenges are massive, South Africa’s new government has a unique opportunity to use its fresh mandate to implement an ambitious package of reforms that can put the economy on a path toward higher growth and prosperity for all. The IMF stands ready to support South Africa in its efforts to work towards a brighter future.&nbsp;



****



Delia Velculescu&nbsp;is the IMF’s mission chief for South Africa.&nbsp;Kamil Dybczak&nbsp;is a senior economist for South Africa in the IMF&#8217;s African Department.

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