Prosper Ndlovu, Business Editor
RESERVE Bank of Zimbabwe (RBZ) Governor Dr John Mangudya is in Washington DC, United States of America attending the 2017 Spring Meetings of the International Monetary Fund (IMF) and World Bank (WB) Group.
The apex bank chief joins scores of central bank and government representatives, civic society organisations, the academia and private sector who are participating in the high profile global economic indaba.
Zimbabwe will utilise the forum to engage the international community and position the country for investment opportunities and secure fresh lines of credit.
Last year the country cleared its arrears amounting to $107 million to the IMF, a move that saw the multilateral lending institution removing its sanctions on Harare. Zimbabwe is now angling to resolve its arrears to multilateral creditors such as the African Development Bank (AfDB) and the World Bank — both owed a combined sum of $1.7 billion.
A senior RBZ official who requested anonymity confirmed Dr Mangudya’s departure.
“Yes the Governor has gone to attend the meetings and for us the issue is still re-engagement with the international community. Now that we have paid the IMF, we are working on clearing our debt with other lenders, the World Bank and AfDB,” said the official.
The crunch global meetings comprise seminars, regional briefings, press conferences, and many other events focused on the global economy, international development and the world’s financial markets. This year’s Spring Meetings events take place in Washington DC and run from April 21-23, 2017. The plenary session of the IMF and World Bank Group’s boards of governors is scheduled only during the annual meetings in autumn.
IMF chief Christine Lagarde stressed in a speech ahead of the meeting the need to build a more resilient and inclusive global economy.
“As the world economy is gaining momentum, two elements are needed — a foundation of sound domestic policies combined with a steadfast commitment to international cooperation, to create a more resilient and inclusive global economy, she said.
World Bank Group president Jim Yong Kim also called for a rethink of global economic policy and a new approach to global development finance so as to satisfy and meet the aspirations of the world’s seven billion people.
What is at stake for Africa?
Africa is well represented in the Spring Meetings with the African Development Bank (AfDB) president, Dr Akinwumi Adesina, leading the regional banking delegation. Africa expects the gathering to feature important discussions related to private sector development, unlocking financial capital for infrastructure development, food security, climate change, gender, civil society and aid effectiveness, among others, says AfDB.
Dr Adesina will use the meeting to engage with the governors of the bank’s regional member countries (RMCs) and conduct bilateral meetings with several non-regional member countries to discuss the bank’s new initiatives, ongoing institutional reforms and the seventh general capital increase (GCI).
During the event he is also set to meet with Lagarde, Melinda Gates and other high ranking figures. Dr Adesina will also deliver remarks under the theme “The Challenge and Logic for Greater Africa” organised by the Centre for Global Development (CGD).
The regional bank will also participate in the Multilateral Development Banks (MDBs) for the Global Infrastructure Forum, which will discuss and explore ways to enhance public and private infrastructure investment and improve alignment between established and new infrastructure initiatives in developing nations.
There will be a high-level meeting on famine and fragility co-hosted by Jim Kim, the president of the World Bank Group (WBG), and Antonio Guterres, the UN secretary-general.
The AfDB has stressed the importance of transforming rural areas in Africa through skills development, job creation and youth economic empowerment.
“These zones of misery must be turned into zones of economic prosperity,” said Dr Adesina.
“For this to happen, investment for rural finance, largely for agriculture and agro-aligned industry, as well as ICT, must be a central strategy.”
Protectionism, interest rates and trade challenge
This year’s Spring Meetings come against the backdrop of geopolitical tensions and uncertainty about the global economic future spurred by the developments in the European Union, particularly the Brexit and the unpredictable United States foreign policy under the Donald Trump administration.
International media reports have cast a shadow on the prospects of rising protectionism that looms large for the IMF, a multilateral organisation set up during the Second World War to foster cooperation between economies and its co-host, the World Bank who face similar daunting challenges to their mission of cutting poverty and inequality. Trump’s arrival in the White House has sparked worries about a new wave of protectionism among international bodies such as the IMF, the Guardian reported. Critics contend that the Trump factor around the world could further dent already moribund state of international trade. Lagarde has said already warned that putting up barriers to trade would be a self inflicted would to the global economy. It is these issues among concerns on raising productivity, arresting political uncertainty and issues of migration.
The World Bank has particularly raised worries about recent low growth in Africa and wants aid funds to be used to turn the billions provided by Western countries into trillions in investment from the private sector.
Poor countries also have reasons to worry about the recent rise in the United States Federal Reserve interest rates, which poses serious consequences for the rest of the world. Most developing countries and emerging markets have taken out big loans in recent years from Western countries where interest rates have been low and now they are being squeezed as borrowing costs rise and as their dollar denominated debts get inflated by a strengthening US currency.