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IMF: Sub Saharan Africa needs $900 billion to emerge out of COVID-19

IMF Africa Department Director Abebe Aemro Selassie

The International Monetary Fund (IMF) last week released its economic outlook for the Sub Saharan Africa region.

According to the document, titled ‘A difficult road to recovery’, the Washington based fund said the  region was  contending with an unprecedented health and economic crisis, one that, in just a few months, has jeopardized years of hard-won development gains and upended the lives and livelihoods of millions.

The IMF Africa experts have left the 2020–21 October outlook broadly unchanged from the June update, with activity in 2020 projected to contract by 3.0 percent, still the worst outcome on record. For 2021, regional growth is projected to recover modestly to 3.1 percent.

This outlook according to IMF Africa Department Director Abebe Aemro Selassie is however  subject to some key downside risks, particularly regarding the path of the COVID-19 pandemic and the resilience of the region’s health systems.

Key to this uncertainties and perhaps the regions’ main uphill task is raising the much needed funding to finance economic recovery and resuscitation plans following an unprecedented erosion of revenue lines across the continent.
Selassie says Sub Saharan Africa’s road to recovery will be made more difficult by uncertainty on the availability of external financing, with associated needs estimated at about $900 billion over 2020–23.

Off the estimated $900 billion needed, sources of about $130 billion to $410 billion are unidentified.

Overall, the region’s outlook will be shaped by the availability of additional financing and the transformative domestic reforms to promote resilience (including revenue mobilization, digitalization, and fostering better transparency and governance), lift medium-term growth, create opportunities for a wave of new job seekers, and progress toward the Sustainable Development Goals (SDGs).

The IMF says with this difficult recovery ahead, policy makers have fewer resources at their disposal as they cautiously lift restrictions and reopen economies.

“Transformative reforms are urgently needed for rekindling resilient growth, which will be difficult without external support” said the US based Fund in the outlook.

Abebe Aemro Selassie noted that onset of the pandemic was delayed in sub-Saharan Africa, and infection rates have been relatively low compared to other parts of the world.

He however said the resurgence of new cases in many advanced economies and the specter of repeated outbreaks across the region suggests that the pandemic will likely remain a very real concern for some time to come.

Amid high economic and social costs, African countries are now cautiously starting to reopen their economies and are looking for policies to restart growth.

With the imposition of lockdowns, regional activity dropped sharply during the second quarter of 2020, but with a loosening of containment measures, higher commodity prices, and easing financial conditions, there have been some tentative signs of a recovery in the second half of the year.

Selassie noted, “Overall, the region is projected to contract by 3.0 percent in 2020, the worst outlook on record. Tourism-dependent economies faced the largest impact, while commodity exporting countries have also been hit hard.”

He explained that growth in more diversified economies will slow significantly, but in many cases will still be positive in 2020.

Looking forward, regional growth is forecast at 3.1 percent in 2021. This is a smaller expansion than expected in much of the rest of the world, partly reflecting sub-Saharan Africa’s relatively limited policy space within which to sustain a fiscal expansion.

Key drivers of next year’s growth will include an improvement in exports and commodity prices as the world economy recovers, along with a recovery in both private consumption and investment.

“The current outlook is subject to greater-than-usual uncertainty with regard to the persistence of the COVID-19 shock, the availability of external financial support, and the development of an effective, affordable, and trusted vaccine.” Said IMF

Against this backdrop, Mr. Selassie pointed to a number of policy priorities going forward noting that where the pandemic continues to linger, the priority remains to save lives and protect livelihoods.

The IMF Africa Chief said for countries where the pandemic is under greater control, limited resources will mean that policy makers aiming to rekindle their economies will face some difficult choices.

He explained that both fiscal and monetary policy will have to balance the need to boost the economy against the need for debt sustainability, external stability, and longer-term credibility.

“Financial regulation and supervision will have to help crisis-affected banks and firms, without compromising the financial system’s ability to support longer-term growth. And these efforts must also be balanced against the need to maintain social stability while simultaneously preparing the ground for sustained and inclusive growth over the long term.”

In the outlook the International Monetary Fund said that navigating such a complex policy challenge will not be easy and will require continued external support noting that without significant assistance, many countries will struggle to simply maintain macroeconomic stability while meeting the basic needs of their population.

In this context, the IMF has moved swiftly and disbursed about US$17 billion so far in 2020 which is about 12 times more than we typically disburse each year to help cover a significant portion of the region’s needs and to catalyze additional support from the international community.

However looking ahead, the IMF says sub-Saharan Africa faces significant financing gaps.

The global Fund says If private financial inflows remain below their pre-crisis levels and even taking into account existing commitments from international financial institutions and official bilateral creditors, the sub-Saharan Africa could face a gap in the order of $290 billion over 2020-23.

“This is important, as a higher financing gap could force countries to adopt a more abrupt fiscal adjustment, which in turn would result in a weaker recovery,” warns IMF.

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Food prices continue to rise, but at a slower rate

28th November 2022

Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.

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Still doing business the old way?

18th November 2022

It’s time to get business done better with MTN Business Botswana’s ICT Solutions.

Running a digital businessMTN Business Solutions Botswana, popularly known as MTN Business is an Internet Service Provider. We are a subsidiary of MTN Group Limited, a multinational telecommunications Group headquartered in South Africa, which operates in 19 markets across Africa and the Middle East.

More and more, clients are looking for ways to keep their staff productive in a dynamically changing business environment. Whether your people are working from home, the office or abroad, there is a growing recognition that digitising your operations can offer unprecedented commercial value in flexibility, productivity and growth. This new, digital reality means that it is more important than ever to stay agile – if there is anything that can slow a business down, it is being burdened by othatld technology.

Having made substantial investments in fibre technology, high-speed terrestrial and undersea networks and new frequency spectrum across the markets wherein it operates, MTN is perfectly positioned to respond to this shift in the market.

A few years ago, MTN also made the decision to build an IP capable radio network for its mobile services, giving its core network the ability to seamlessly integrate with enterprise IP networks. The mobile towers deliver services to enterprise clients absolutely anywhere it has a network, shortening the last mile and removing complexity and cost.

Now there is increasing demand from clients to connect their remote sites in all areas, including rural and semi- rural. MTN has assisted clients with overcoming this connectivity hurdle, enabling their staff to get the job done wherever they are.
MTN’s evolution

For MTN, the focus has shifted from just being a core telecommunications services provider, towards also becoming a technology solutions provider. The service offering now also includes Unified Communications, Data Hosting and Cloud Solutions, Security-As-A-Service and Managed Network Services. The scope has changed to being client and industry specific, so the requirements and service portfolio vary from one client to the next. The expectation is that a company like MTN must respond to these challenges, helping clients to get business done better as they shift from old to new technologies.

As many businesses continue to grapple with a digitally dynamic world, they face new challenges that have to be solved. This environment will benefit those that are more digitally enabled and agile. It is a brave new world that will favour online over on-site, wireless over wired and fluid over formulaic. Businesses will seek out partners and suppliers that are every bit as flexible and forward-looking as they are.
Ultimately, clients need partners like MTN Business that will invest in infrastructure, deliver the services they require, have market credibility, are financially sound and have a long-term commitment to their market presence.

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BIE to vitalize the Dignity of Engineers

9th November 2022

Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in  which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.

The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.

Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.

“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.

He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.

Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.

“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.

He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.

He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc

“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran

Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.

“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.

Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that  the BIE provides a fertile environment where they can meet, share ideas and grow professionally.

“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.

He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.

“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams

He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .

Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution  said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.

“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.

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