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Beyond IMF,World Bank to addressing the plight of African economies

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Added 12th October 2018 01:13 PM

Beyond Bali, for world peace and economic stability to be, global and continental economic fangs that impoverish African people from sharing in global economic prosperity must be fundamental to IMF and World Annual Meetings 2018.

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Julius Kapwepwe Mishambi

Beyond Bali, for world peace and economic stability to be, global and continental economic fangs that impoverish African people from sharing in global economic prosperity must be fundamental to IMF and World Annual Meetings 2018.

By Julius Kapwepwe Mishambi

The world is waking up to the fall of the Annual IMF and World Bank Group Meetings, this time in Bali - Indonesia, between 12th and 14th October 2018. Bali is a God-handicraft handsome island of holiday resorts in this Indonesian archipelago, recent Palu earthquake notwithstanding.

Beyond Bali, for world peace and economic stability to be, global and continental economic fangs that impoverish African people from sharing in global economic prosperity must be fundamental to IMF and World Annual Meetings 2018. So must this be, for similar meetings elsewhere about/ or in Iran, New York, African Union or Regional Economic summits in Uganda.

Policy, institutional and programming paraphernalia must resolve the impoverished economic situation of African people and economies. IMF and World Bank cannot continue to impose harsh economic policy constitutionality even for short-term financial bail-out for African economies.  IMF must advise strongly against the creeping trend of same-charge of ICT taxes (mobile money and social media) to consumers across the economic quintiles with no regard to different consumer portfolios. This perpetuates regressive tax in Africa.

IMF and World Bank agree now agree that the hitherto IMF- promised "steady progress" taking a sample of Spring Meeting in 2016 through the medium term, is untenable. Global economic growth approximated at 3.6% for 2017 and 3.7% for 2018 has not and will not be. Anecdotal evidence and outlook so far suggest that 2018 and 2019 economic growth will fall by 0.2% from the previous IMF economic promises. This imperative invites all stakeholders to urgently implement a package of global policy and financing reforms, towards more equitable, growth and shared economic prosperity outcomes.  

Unfair global trade continues to impoverish African people and economies through increasing risk of Sovereign Debt demagogue. Even when suppressed by African Governments and IMF methodologies, there is upscale of external debt by African economies, together with domestic debt, compounding debt portfolio: Uganda, Kenya, Mauritania, Senegal, Ethiopia, Zambia, Cameroon, Ghana and others. An approximate four out of five low-income countries (perhaps more if not going by the IMF methodologies) remain on risk of debt distress or are already in default.

My visit to Mozambique in 2018 showed that at dawn of 2018 alone, some African economies were experiencing Debt to GDP ratio in excess of "infamous" 50% red-line: Mozambique, South Sudan, Sudan, Zimbabwe, Chad, etc. Globally, thirteen middle- and low-income countries have defaulted on debt commitments since 2008, also in context of Eurozone financial crisis and huge African Sovereign Debt: GDP parameter. Even more economies have directly or otherwise requested for bail-out financing from IMF. Such are confirmatory tests for IMF-World Bank Meeting and other actors to resolve. Shared global economic prosperity (that includes Africa) will be kingpin for global peace and economic stability.

Unless reversed, continued Sovereign debt trends of African economies will be a recipe for repeat of a 2008-like looming global financial crisis. Huge sovereign debt is undermining implementation of Sustainable Development Goals and a compendium of economic rights. The China-India-Turkey axis of development financing may strip current global-injustice economic outfit that largely enriches Europe and America, unless they reform for Africa.  

Arguably, archaic trade measures such as US $200 billion tariff slapped on imports from China and US economic sanctions on Iran have contributed to petrol fuel pump prices from UGX 3,000 per litre at dawn of 2018 to UGX 4350 in October 2018. These distort international market while unjustifiably escalating Sovereign Debt and household cost of living in Uganda and globally.

Director of Programmes

jkapwepwe@udn.or.ug

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