- IMF’s creates third seat for Sub-Saharan Africa on its Executive Board
- WEF‘s forecast growth deceleration to 3.2% in 2024/25 from 3.3% in 2023 noted
- SSA growth is expected to reach 4.2% by 2025, below region’s historical average of 3.8%
- Global inflation currently estimated at 6.7& with projection of 5.8% for 2024
GAZETTE REPORTER
Accompanied by senior bank officials, the Governor of the Bank of Botswana (BoB), Cornelius Dekop, represented Botswana at the 2024 Annual Meetings of the International Monetary Fund (IMF) and World Bank Group (WBG) held in Washington, D.C., from 21 to 26 October.
This event, inaugurated by U.S. President Joseph Biden and addressed by IMF Managing Director Kristalina Georgieva and World Bank President Ajay Banga, gathered global financial leaders to discuss economic resilience, inflation control, and policy responses to a slow post-pandemic recovery.
The Governor of BoB, Dekop took part in the IMF’s Africa Group 1 Constituency and the African Caucus, both pivotal forums addressing Sub-Saharan Africa’s economic landscape.
SSA in gradual recovery
According to a recent statement issued by BoB, these meetings tackled issues ranging from global growth forecasts and inflation trends to the pressures of high debt burdens, with a particular focus on how emerging markets can navigate these challenges to foster sustainable growth.
The 2024 World Economic Outlook, unveiled during the meetings, projects global growth to decelerate slightly to 3.2 percent in 2024 and 2025, down from 3.3 percent in 2023.
For Sub-Saharan Africa, growth is expected to reach 4.2 percent by 2025, marking gradual recovery but remaining below the region’s historical growth average of 3.8 percent.
Extreme weather conditions
The report noted that elevated borrowing costs, ongoing geopolitical tensions, extreme weather conditions, and low productivity growth are hindering the region’s economic recovery.
Structural reforms and targeted monetary and fiscal policies were recommended to balance short-term growth needs with long-term economic health.
Discussions at the meetings revealed a nuanced global inflation landscape. Inflation, while declining due to tighter monetary policies and more stable supply chains, remains high in many regions.
For 2023, global inflation was estimated at 6.7 percent, with a projection of 5.8 percent for 2024.
Entrenched inflation pressures
However, inflation in advanced economies has decreased more rapidly due to their relatively stronger economic structures and reduced exposure to commodity price shocks, while developing economies face more entrenched inflation pressures that affect their populations acutely.
A key outcome from the discussions was the IMF’s announcement of governance reforms, creating a third seat for Sub-Saharan Africa on the IMF Executive Board.
This milestone, coinciding with the 80th anniversary of the Bretton Woods Institutions, brings the total number of Directors to 25 and strengthens the voice of Africa’s 45 member countries within the IMF’s decision-making processes.
Green transition
Climate change and technological advancements were recurring themes. The green transition, particularly in debt-laden emerging economies, poses significant challenges due to high investment requirements.
Nevertheless, integrating climate strategies into development frameworks was recognised as essential to prevent costly future adjustments.
Similarly, technological innovation, especially digitalisation and artificial intelligence, was highlighted as a potential economic driver if risks around inclusivity and data security are managed.
Bilateral meetings
Outside the main meetings, Governor Dekop participated in the Macroeconomic and Financial Management Institute of Eastern and Southern Africa’s sessions and the Association of African Central Bank Governors.
He held bilateral meetings with key institutions, discussing cooperation on technical assistance and capacity-building initiatives in macroeconomic modelling, banking supervision, and payment systems – all essential for strengthening Botswana’s financial infrastructure.