…following successive increases since the outbreak of COVID-19 and Ukraine-Russia conflict
BY DELISA THWALA
EZULWINI – The Southern African Customs Union (SACU) Council of Ministers have revealed that they remain optimistic that an amicable settlement will be reached on the Russia-Ukraine conflict given its negative impact on both the global and SACU economy.
The Chairperson of SACU Council of Ministers Neal Rijkenberg said the meeting was also taking place when the global economic prospects remain subdued.
Members and delegates for SACU are currently in a closed session of the 49th Meeting of the SACU Council of Ministers. The meeting is currently ongoing at Happy Valley hotel in Ezulwini.
Meanwhile Neal said, based on the International Monetary Fund (IMF) forecasts, the global economy is expected to fall from 3.4 percent in 2022 to 2.8 percent in 2023, with a slight improvement to 3.0 percent in 2024.
“The slowdown is also projected for the Advanced Economies, from 2.7 percent in 2022 to 1.3 percent in 2023 and forecast to remain subdued at 1.4 percent in 2024,”
“Similar trends are projected for the Emerging Market and Developing Economies with a lower growth rate of 3.9 percent in 2023 compared to 4.0 percent for 2022 with an improved rate of 4.2 percent in 2024,” said the Minister.
In addition he said Sub-Saharan Africa will also experience similar growth prospects at the rest of the world with SACU Member States expected to record an average weighted growth rate of 1.8 percent in 2023 compared to 2.3 percent in 2022.
However, there are positive signs relating to global inflation, following successive increases since the outbreak of COVID-19 and exacerbated by the Ukraine-Russia conflict.
“Inflation is now forecast to decline from 8.7 percent in 2022 to 7.0 percent in 2023 at the backdrop of lower commodity prices. It is on this note that as a region, we remain optimistic that an amicable settlement will be reached on the Russia-Ukraine conflict given its negative impact on both the global and SACU economy,” he said.
In addition to that, Minister Neal said they have seen in the recent past the spill-over effects from the conflict which not only continues to constrain the global economic growth prospects, but also threaten food security where a surge in food and energy prices was witnessed which in turn has left citizens vulnerable.
“The geopolitical fragmentation and alignment towards the multipolar world due to the Russia- Ukraine Conflict has also other far reaching political and economic ramifications. The Rand also continues to weaken against the US Dollar due to various risks including threats of potential sanctions for perceived support for Russia,” he said.
Worth mentioning is that there are also threats on the market access to the US under AGOA beyond 2025, when the present arrangement expires.
There are also other key global events expected in the next few months such as the 15th BRICS Summit to be held in August 2023.
“As we all know, South Africa is a member of BRICS and will be hosting the Summit. Some of the key items that will be discussed include its expansion and the development of a new currency to be used for cross-border trade by the BRICS nations. These developments require SACU to note them, especially its potential implications for our region. Colleagues,” said Neal.
