New Zim Leader Mnan­gagwa makes Zam­bia his 5th SADC Coun­try to Visit

Zambian Business Times - - POLITICS AND GOVERNMENTS -

Per­haps in or­der of how sig­nif­i­cant his regime views the re­gional states, he made Namibia his third des­ti­na­tion where he con­ferred with Dr. Hage Gein­gob af­ter which on Wed­nes­day 10th Jan­uary vis­ited Mozam­bique for a day to ap­prise fel­low lead­ers on the po­lit­i­cal changes that have taken place in the coun­try.

In Mozam­bique, Mnan­gagwa met his coun­ter­part Fil­lipe Nyusi as well as Zim­bab­wean busi­ness peo­ple based in that coun­try. Zam­bia was then the 5th coun­try he dated on a work­ing visit Mnan­gagwa held closed door meet­ings with his Zam­bian coun­ter­part and sought ad­vice on key is­sues af­fect­ing his coun­try, this was dis­closed by Pres­i­den­tial aide Amos Chanda in an in­ter­view.

Hav­ing as­cended to power by the army through what has come to be termed as ‘a soft coup’‚ Mnan­gagwa went ahead and re­warded army gen­er­als with top cab­i­net posts‚ which some of his crit­ics have de­scribed as mil­i­ta­riz­ing the coun­try.

Mnan­gagwa, who has taken over from Robert Mu­gabe who is among Africa’s well-spo­ken and in­ter­na­tion­ally rec­og­nized con­tro­ver­sial fig­ure has big shoes to fill. To help shore up his in­ter­na­tional im­age, Mnan­gagwa set his eyes on en­gag­ing the in­ter­na­tional com­mu­nity with his first of­fi­cial trip abroad last week to the World Eco­nomic Fo­rum - WEF - in Davos‚ Switzer­land. His pres­i­den­tial spokesper­son has also an­nounced his plans to visit China some­time in April 2018.

Mean­while, Mnan­gagwa who in his early life be­fore Zim­babwe gained in­de­pen­dence was ed­u­cated and live in Zam­bia were he even worked briefly be­fore re­turn­ing to his home coun­try Zim­babwe, He was ed­u­cated and has his first de­gree from the Univer­sity of Zam­bia. Zam­bia and Zim­babwe have strong eco­nomic and po­lit­i­cal ties dat­ing back to the time of lib­er­al­iza­tion strug­gle for in­de­pen­dence from the Bri­tish colo­nial rule. Zam­bia suc­ceeded in get­ting in­de­pen­dence ahead of Zim­babwe in Oc­to­ber 1964 while Zim­babwe was to later gain in­de­pen­dence af­ter a fierce bat­tle later on in 1980. The Zam­bian gov­ern­ment then led by for­mer pres­i­dent and pan African­ist Dr. Ken­neth David Kaunda ex­tended sup­port to the in­do­lence strug­gle in Zim­babwe.

Even dur­ing the time of eco­nomic hard­ships in Zim­babwe as for­mer leader Mu­gabe was sub­jected to sanc­tions by the in­ter­na­tional com­mu­nity, Zam­bia ex­tended its doors to Zim­bab­weans to trade and work in Zam­bia. To­day, Zam­bia has a siz­able pop­u­la­tion of Zim­bab­wean traders, farm­ers and ex­perts work­ing in var­i­ous in­dus­tries. Zam­bia and Zim­babwe can look to strength­en­ing eco­nomic ties by agree­ing tan­gi­ble trade deals be­tween the two coun­tries. The trip Zam­bia al­lowed Mnan­gagwa to re­unite with his for­mer class mates to in­clude the chief jus­tice and his good friends like for­mer Vice Pres­i­dent Enock Kavin­dele. Mnan­gagwa shared tales on how he was re­cruited in UNIP and was in­volved in burn­ing of prop­erty a lit­tle trip down me­mory lane. Mnan­gagwa de­parted Zam­bia at 18.30 aboard a Boe­ing 737 Air Zim­babwe. Zam­bia’s for­eign af­fairs min­is­ter clar­i­fied why Mnan­gagwa was not ac­corded a 21-gun salute, cit­ing the visit as be­ing work­ing and a state one which most crit­ics had al­ready started to ques­tion. OPEC is im­ple­ment­ing sup­ply cuts which has seen crude rise to lev­els not seen in years. WTI is trad­ing for $USD64/bbl. while Brent fu­tures are trad­ing for $USD70/bbl. This news changes for­tunes for An­gola, Nige­ria, Gabon, South Su­dan and Ghana. Other com­modi­ties that have seen strong ral­lies are cop­per that recorded a 35% rise to $7,188/ton and Cobalt that climbed to a 129% height to close 2017 at $USD75,500/ton. This is good news for Congo DRC and Zam­bia.

Nev­er­the­less, across all EMDEs, room for pol­icy im­prove­ments re­mains.

Pol­icy ini­tia­tives to lift phys­i­cal and hu­man cap­i­tal, en­cour­age la­bor force par­tic­i­pa­tion, and im­prove in­sti­tu­tions could help raise po­ten­tial growth and re­duce in­equal­ity.

Global Out­look.

A broad-based cycli­cal global re­cov­ery is un­der­way, aided by a re­bound in in­vest­ment and trade, against the back­drop of fi­nanc­ing con­di­tions, gen­er­ally ac­com­moda­tive poli­cies, im­proved con­fi­dence, and the dis­si­pat­ing im­pact of the ear­lier com­mod­ity price col­lapse.

Global growth is ex­pected to be sus­tained over the next cou­ple of years—and even ac­cel­er­ate some­what in EMDE’s thanks to a re­bound in com­mod­ity ex­porters.

Al­though near-term growth could sur­prise on the up­side, the global out­look is still sub­ject to sub­stan­tial down­side risks, in­clud­ing the pos­si­bil­ity of fi­nan­cial stress, in­creased pro­tec­tion­ism, and ris­ing geopo­lit­i­cal ten­sions.

Par­tic­u­larly wor­ry­ing are longer-term risks and chal­lenges as­so­ci­ated with sub­dued pro­duc­tiv­ity and po­ten­tial growth. With out­put gaps clos­ing or al­ready closed in many coun­tries, sup­port­ing ag­gre­gate de­mand with the use of cycli­cal poli­cies is be­com­ing less of a pri­or­ity.

Fo­cus should now turn to the struc­tural poli­cies needed to boost po­ten­tial growth and liv­ing stan­dards. Re­gional Per­spec­tives.

Growth in most EMDE re­gions with large num­bers of com­mod­ity ex­porters re­cov­ered in 2017, with the no­table ex­cep­tion of the Mid­dle East and North Africa, mainly due to oil pro­duc­tion cuts.

These re­gions are gen­er­ally ex­pected to see faster growth dur­ing the fore­cast hori­zon, as com­mod­ity prices rise and the im­pact of the ear­lier terms of trade shock di­min­ishes.

The ro­bust pace of ex­pan­sion in EMDE re­gions with a sub­stan­tial num­ber of com­mod­ity im­porters is ex­pected to con­tinue. Risks to the out­look have be­come more balanced in some re­gions, but con­tinue to tilt down in all of them.

Global Eco­nomic Prospects in­cludes a chap­ter on the sources of slow­ing global po­ten­tial growth and pol­icy op­tions to raise it, as well as two spe­cial fo­cus pieces on the im­pact of the 2014-16 oil price col­lapse and the po­ten­tial im­pli­ca­tions of im­prov­ing ed­u­ca­tion for­mal equal­ity.

Build­ing Solid Foun­da­tions: How to Pro­mote Po­ten­tial Growth. De­spite a re­cent ac­cel­er­a­tion of global eco­nomic ac­tiv­ity, po­ten­tial out­put growth is flag­ging.

At 2.5%, 2013-17 po­ten­tial growth was 0.5% point be­low its longer term av­er­age and 0.9% points be­low its av­er­age a decade ago, with an even steeper de­cline in EMDEs.

More than one-half of the de­cel­er­a­tion re­flects weaker-than-av­er­age rates of cap­i­tal ac­cu­mu­la­tion, but weaker to­tal fac­tor pro­duc­tiv­ity growth and de­mo­graphic trends have also played a role.

These forces are not ex­pected to di­min­ish over the next decade and, un­less coun­tered, will de­press global and EMDE po­ten­tial growth fur­ther by 0.2% and 0.5% points, re­spec­tively, over the next decade.

Pol­icy ini­tia­tives to lift phys­i­cal and hu­man cap­i­tal, en­cour­age la­bor force par­tic­i­pa­tion, and im­prove in­sti­tu­tions could help re­verse this trend.

With the Ben­e­fit of Hind­sight: The Im­pact of the 2014-16 Oil Price Col­lapse.

The 2014-16 col­lapse in oil prices was one of the largest in mod­ern his­tory, but failed to pro­vide an ex­pected boost to global growth.

The short-term ben­e­fits of fall­ing oil prices to global growth were muted by sev­eral fac­tors, in­clud­ing the low re­spon­sive­ness of ac­tiv­ity in key oil-im­port­ing emerg­ing mar­kets, eco­nomic re­bal­anc­ing in China, and the damp­en­ing im­pact of a sharp con­trac­tion in en­ergy in­vest­ment and a rapid ap­pre­ci­a­tion of the U.S. dol­lar on growth in the United States.

Among oil-ex­port­ing coun­tries, those with flex­i­ble ex­change rates, more di­ver­si­fied economies, and larger fis­cal buf­fers fared bet­ter than oth­ers.

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