Mr Masisi said the SACU countries, namely Botswana, South Africa, Eswatini, Namibia and Lesotho, are now at a stage where there is increasing risk for stagflation
President Mokgweetsi Masisi of Botswana said Southern African Customs Union (SACU) countries, namely Botswana, South Africa, Eswatini, Namibia and Lesotho, are now at a stage where there is increasing risk for stagflation.
In his opening remarks on the occasion of the 7th Summit of the SACU heads of state and government in Gaborone, the capital of Botswana, Masisi said the ongoing Russia-Ukraine conflict is dimming the economic growth prospects to a point where growth is estimated to slow down to 3.6 percent in 2022.
“We are now at a stage where there is increasing risk for stagflation,” said Masisi, adding that growth projections for 2022 stand at 3.8 percent compared to 6.8 percent in 2021 with an improvement forecast in 2023 to 4.4 percent.
Masisi said the Russian-Ukraine conflict has worsened the already depressed economy due to the impact of COVID-19 pandemic together with the disruptions of the global supply chains, thereby resulting in a surge in inflation the world over, including the SACU region.
The surge in inflation, especially for food and energy, remains a present global risk which is hurting consumers and wearing down their purchasing power, according to Masisi. This calls for SACU countries to undertake countercyclical measures to cushion their economies, said Masisi.
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Furthermore, Masisi said the downward trend of the economy in the SACU region highlights the importance of accelerating the implementation of the respective countries’ economic recovery plans and continue to mobilize the necessary financial support.
Paulina Elago, the executive secretary of SACU, said the customs union seeks to deepen regional economic integration through the development of regional value chains in the agro-processing, textiles and clothing, cosmetics and essential oils as well as pharmaceuticals.
Formed in 1910, SACU is the world’s oldest customs union and has its headquarters in the capital of Namibia, Windhoek.