BRICS Summit: De-dollarization talks gain momentum

Standard Bank's Celio Hamide, Head of Sales for Global Markets, joined CNBC Africa for a focus on Southern Africa's macroeconomic landscape. The discussion revolved around interest rate decisions in Zambia and Botswana, as well as the recent BRICS Summit and the implications of de-dollarization for the region. The BRICS Summit has been a significant topic of conversation, with six new members added to the union. Although Mozambique is not among them, Hamide sees potential opportunities for Africa and other member countries. He highlighted the expansion of the union and the creation of a new currency to reduce dependence on the US dollar. The move towards using local currencies for trade and financial transactions could lead to cost savings, but the impact may vary across countries. The focus on de-dollarization has been central to discussions surrounding the BRICS Summit, with the potential for a long-term shift in global financial dynamics. While some countries have expressed reservations about the expansion, Hamide believes it could benefit China in the future. In terms of local markets, Zambia recently hiked its interest rates by 50 basis points to 10 percent due to inflation exceeding the target range. Botswana, on the other hand, chose to maintain its rates unchanged, with room for potential cuts later in the year. In Mozambique, there has been an acceleration in GDP growth, mainly driven by the energy sector. Hamide noted that despite challenges in other commodity markets, the country is seeing positive growth. The World Bank and IMF have also projected high numbers for Mozambique's growth. The key question remains whether this acceleration will attract more foreign investments and boost fiscal revenue. The government's efforts to create an attractive legal framework for business could further enhance Mozambique's economic prospects. Hamide expressed optimism about the bond investment appetite in Mozambique and suggested a potential rate cut in the future. Overall, the outlook for Mozambique's economy is positive, with opportunities for growth in various sectors.