The growth of the Gross Domestic Product (GDP) in the Southern African Development Community (SADC) continues to diverge, while output remains below potential, leading to a high unemployment rate in the region, an official has said.
Prime Minister Saara Kuugongelwa-Amadhila said this at the ongoing 57th SADC Committee of Central Bank Governors (CCBB) meeting at Swakopmund.
She said the CCBG convergence will craft solutions to ensure growth, further highlighting that monetary and macroeconomic stability remains the bedrock of any future economic success.
“As we forge ahead in ensuring the macroeconomic stability of the region, we need to remain focused on fostering accelerated, sustained, and inclusive growth through increased investment and deeper trade, thereby creating much-needed jobs and reducing poverty and income inequalities among our people,” she said.
“Many of our people, particularly in the rural and informal areas, remain financially excluded and thus financially marginalised, with no access to financial services, or they are subject to financial charges that are beyond their affordability. Therefore, I would like to urge central banks to support the efforts of our respective governments, by coming up with or spearheading the crafting of innovative, modern, and secure solutions for enhanced financial inclusion and cross-border payments,” implored the Prime Minister.
Kuugongelwa-Amadhila said several capital markets still do not adequately serve all people nor satisfactorily respond to current economic realities.
She expressed hope that central banks can help contribute to further deepening and broadening the capital markets for inclusiveness as well as complimenting efforts of governments.
The CCBG structure has been pivotal in the implementation and promotion of the SADC Protocol on Finance and Investment (FIP) which is aimed to harmonise national laws, regulations, and practices.
This ultimately creates an enabling investment and business environment in the SADC region, which is essential for socioeconomic development and job creation.
“I understand that you are at a crucial juncture as you convene to review your accomplishments over the past three years, prior to establishing your strategic priorities for the upcoming three years, as part of the CCBG Strategic Plan,” the Prime Minister said.
“CCBG meeting is gathering against the backdrop of a number of geopolitical upheavals, and as such it must consider the effects of such instabilities. These instabilities are on the back of the current international political system, with heightened polarisation and significant geopolitical tensions. These continue to exert uncertainties on our global trade and investments. There are also disruptions in supply chains, causing scarcity of basic goods and services, and driving up local prices,” she added.
The instabilities, she added, exacerbate the preceding effects of Covid-19, which have resulted in many economies experiencing debt distress across the world, thus pushing backward their socioeconomic gains.
This meeting takes place at a time when the SADC region, like elsewhere, is confronted with the problem of high inflation and low economic growth.
“Inflation largely emanating from recent global developments remains sticky and has introduced a policy conundrum that has been testing the resolve of central banks. Nonetheless, your efforts to tame inflation and ensure that inflation pressures don’t suck household incomes dry or morph into a perpetual spiral are starting to yield results,” Kuugongelwa-Amadhila acknowledged.
She further remarked that despite inflation rates slowly going down, it is important for governments and central banks to strengthen support to the economy to accelerate growth and employment creation.
“Optimism should certainly be exercised with caution, as the battle is not yet won and, in some of our member countries, inflationary pressures are still intensifying,” she said.
