01 Jul 2022
The president of Botswana has stated that countries within the Southern African Customs Union (SACU), namely Botswana, South Africa, Eswatini, Namibia and Lesotho, are at increasing risk of stagflation.
Speaking at the 7th Summit of the SACU heads of state and government in Botswana’s capital Gaborone, President Mokgweetsi Masisi said the war in Ukraine is impacting economic growth prospects, with growth now forecast to decelerate to 3.6% this year.
"We are now at a stage where there is increasing risk for stagflation," said President Masisi, going on to add that the growth forecasts for 2022 stand at 3.8% compared to 6.8% in 2021. An improvement is predicted for next year, rising to 4.4%.
Masisi said the ongoing Russia-Ukraine conflict has exacerbated Botswana’s already depressed economy from the effect of the pandemic, coupled with global supply chain issues resulting in a surge in inflation across the world, including the SACU region.
The president continued that soaring inflation, particularly in food and energy costs, is an ongoing global risk, impacting consumers and their purchasing power. As such, countries within the SACU need to take steps to bolster their economies.
Moreover, Masisi said the economy’s downward shift in the SACU region underscores the importance of implementing economic recovery plans as soon as possible, and continuing to provide the required financial support.
Executive secretary of the Southern African Customs Union, Paulina Elago said the organisation is aiming to reinforce regional economic integration via developing regional value chains in the agro-processing, textiles and clothing, cosmetics and essential oils and pharmaceuticals sectors.
The SACU, established in 1910, is the oldest customs union in the world, headquartered in Namibia’s capital, Windhoek.