Davos 23: Mastercard’s Michael Froman shares global economic outlook for 2023

The global economic landscape remains uncertain, with concerns about slowing growth rates, rising interest rates, and inflation. Amidst this backdrop, CNBC Africa correspondent Godfrey Mutizwa caught up with Michael Froman, Vice Chairman and President for Strategic Growth at Mastercard, at the World Economic Forum in Davos, Switzerland. Froman shared insights on the health of the global economy, the importance of digitization, and the challenges and opportunities facing Africa in its path to recovery. Froman emphasized Mastercard's focus on partnering with governments and companies to advance digitization and ensure inclusion in the digital economy. The ongoing revolution in digitization presents opportunities for individuals, small businesses, corporations, and governments to thrive in an increasingly digital world. The challenge lies in bridging the gap for those who have been excluded from the digital economy. The conversation shifted towards the health of economies worldwide, with a particular focus on developing nations. Froman noted the uncertainty surrounding the possibility of a recession and highlighted the uneven growth patterns observed in different regions and countries. Inequalities exacerbated by the COVID-19 pandemic have further highlighted the need for inclusive economic strategies. One of the key topics of discussion at Davos was the African Continental Free Trade Agreement (AfCFTA). Froman commended the progress made in negotiating and ratifying the agreement, noting its potential to boost intra-African trade and attract investments to the continent. As skepticism looms over the implementation timeline and challenges, Froman underscored the importance of addressing not just tariff barriers but also non-tariff barriers to trade. Regarding financial inclusion, Mastercard has set ambitious goals to bring a billion individuals, 50 million micro and small merchants, and 25 million women-run businesses into the digital economy. By leveraging homegrown innovation in Africa, such as the lab in Nairobi, Mastercard is spearheading initiatives like 'Farm Pass' to empower farmers with access to markets, financing, and tools for increased productivity. These efforts aim to enhance financial security and improve livelihoods. On the issue of affordability, Froman highlighted the importance of developing cost-effective solutions tailored to the needs of small and medium-sized enterprises (SMMEs). By prioritizing affordability and accessibility, Mastercard aims to ensure that its financial inclusion products are sustainable and beneficial for all stakeholders. In conclusion, Froman's insights shed light on the complex interplay of global economic dynamics, the significance of digitization in driving economic growth, and the potential for Africa to leverage initiatives like the AfCFTA and financial inclusion to chart a path towards sustainable recovery and inclusive prosperity.