This week the International Monetary Fund (IMF) issued a warning to global economies, signaling massive inflation, a rise in fuel and food prices to levels never seen before.
Experts at the Washington headquartered global fund have highlighted the Russia-Ukraine war as the source of an international trade catastrophe that will impact low income households more. In its World Economic Outlook released on Tuesday, the IMF says the war in Ukraine has triggered a costly humanitarian crisis that demands a peaceful resolution.
Pierre-Olivier Gourinchas, IMF Economic Counsellor and Director of Research said economic damage from the conflict will contribute to a significant slowdown in global growth in 2022 and add to inflation. “Fuel and food prices have increased rapidly, hitting vulnerable populations in low-income countries hardest.” he said.
The IMF has now revised its initial World economic growth forecasts, global growth is now projected to slow down from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023.This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January.
Beyond 2023, global growth is forecast to decline to about 3.3 percent over the medium term. War-induced commodity price increases and broadening price pressures have led to 2022 inflation projections of 5.7 percent in advanced economies and 8.7 percent in emerging market and developing economies—1.8 and 2.8 percentage points higher than projected last January.
The IMF observed that multilateral efforts to respond to the humanitarian crisis, prevent further economic fragmentation, maintain global liquidity, manage debt distress, tackle climate change, and end the pandemic are essential. Pierre-Olivier Gourinchas reiterated that global economic prospects have worsened significantly since the Fund’s last World Economic Outlook forecast in January.
“At the time, we had projected the global recovery to strengthen from the second quarter of this year after a short-lived impact of the Omicron variant. Since then, the outlook has deteriorated, largely because of Russia’s invasion of Ukraine—causing a tragic humanitarian crisis in Eastern Europe—and the sanctions aimed at pressuring Russia to end hostilities.” he said.
This crisis unfolds while the global economy was on a mending path but had not yet fully recovered from the COVID-19 pandemic, with a significant divergence between the economic recoveries of advanced economies and emerging market and developing ones. In addition to the war, frequent and wider-ranging lockdowns in China—including in key manufacturing hubs—have also slowed activity there and could according to IMF experts cause new bottlenecks in global supply chains.
Higher, broader, and more persistent price pressures also led to a tightening of monetary policy in many countries. Overall risks to economic prospects have risen sharply and policy trade-offs have become ever more challenging. The IMF also noted that beyond the immediate humanitarian impacts, the war will severely set back the global recovery, slowing growth and increasing inflation even further.
The IMF’s downgrade on global economic growth largely reflects the war’s direct impacts on Russia and Ukraine and global spillovers. Both Russia and Ukraine are projected to experience large GDP contractions in 2022. The severe collapse in Ukraine is observed as a direct result of the invasion, destruction of infrastructure, and exodus of its people.
In Russia, the sharp decline reflects the impact of the sanctions with a severing of trade ties, greatly impaired domestic financial intermediation, and loss of confidence. “The economic effects of the war are spreading far and wide—like seismic waves that emanate from the epicenter of an earthquake—mainly through commodity markets, trade, and financial linkages,” Pierre-Olivier Gourinchas said.
He explained that because Russia is a major supplier of oil, gas, and metals, and, together with Ukraine, of wheat and corn, the current and anticipated decline in the supply of these commodities has already driven their prices up sharply.
Europe, Caucasus and Central Asia, Middle East and North Africa, and sub-Saharan Africa are most affected. The food and fuel price increases will according to IMF hurt lower-income households globally—including in the Americas and Asia.
The Director General of the Directorate on Corruption and Economic Crime (DCEC) Tymon Katholo has revealed why he took a decision to engage private lawyers against the State. The DCEC boss engaged Monthe and Marumo Attorneys in his application to interdict the Directorate of Intelligence and Security (DIS) from accessing files and dockets in the custody of the corruption busting agency.
In his affidavit, Katholo says that by virtue of my appointment as the Director General of the DCEC, he is obliged to defend the administration and operational activities of the DCEC. He added that, “I have however been advised about a provision in the State Proceedings Act which grants the authority of public institution to undertake legal proceedings to the Attorney General.” Katholo contends that the provision is not absolute and the High Court may in the exercise of its original jurisdiction permit such, like in this circumstance authorise such proceedings to be instituted by the DCEC or its Director General.
Botswana Democratic Party (BDP) has gone through transformation over the years, with new faces coming and going, but some figures have become part and parcel of the furniture at Tsholetsa House. From founding in 1962, BDP has seen five leaders changing the baton during the party’s 60 years of existence. The party has successfully contested 12 general elections, albeit the outcome of the last polls were disputed in court.
While party splits were not synonymous with the BDP for the better part of its existence, the party suffered two splits in the last 12 years; the first in 2010 when a Barataphathi faction broke ranks to found the now defunct Botswana Movement for Democracy (BMD). The Barataphathi faction was in the main protesting the ill-treatment of then recently elected party secretary general, Gomolemo Motswaledi, who had been suspended ostensibly for challenging the authority of then president, Ian Khama.
Mr Abdoola has known Mr. Uzair Razi for many years from the time he was a young boy. Uzair’s father, Mr Razi Ahmed, was the head of BCCI Bank in Botswana and “a very good man,” his close associates say.
Uzair and his wife went to settle in Dubai, the latter’s birthplace. He stayed in touch and was working for a real estate company owned by Mr. Sameer Lakhani. “Our understanding is that Uzair approached Mr. Abdoola to utilize their services for any property-related interests in Dubai. He did some work for Mr.Abdoola and others in the Botswana business community,” narrates a friend of Mr Abdoola.