Watch: Focus on funding emerging market economies

According to some analysts there’s been discrepancies with how financial institutions – like the World Bank – fund different emerging market economies. Business Day TV caught up with Gemcorp Economist, Simon Quijano-Evans and he shared more insight on the discrepancies.

Foreign ers are questioning the terms and conditions financial institutions are applying to different emerging market economies we’ve had a gem corp simon keanu evans highlight discrepancies when it comes to funding countries within africa saying that the latin region received more funding per cap than sub-saharan africa and he joins us now with more of the detail so

I think it was last week simon my producer showed me a tweet of yours and i actually want to quote it um you said that one thing you have confirmed here in dc of course that was at the imf meetings in washington sub-saharan africa is being treated very differently differently than the rest of the world why did latin receive more world bank funding than a sub-saharan

Africa in 2021 why was the imf loan stock in argentina 41 billion versus 34 billion dollars in essay ssa at the end of 2021 why is common framework being imposed on ssa but not latinum why do some ssa can countries but not let him face zero ncb limits are quite a few things to unpack there and i mean i just want to know from you can you just give us more detail

On that because i mean this is a time when sub-saharan africa needs the most support i mean even the i’m if said that economic growth is is is is going to be about 3.6 in 2022 with all the challenges that we are facing yes hi um it’s very difficult to tread on these waters um no it’s something i’m trying to highlight uh for the last actually two two and a half

Years since we moved into the covid uh panic and chaos and you know the global or international community assume that that sub-saharan africa wouldn’t be able to deal with it etc now now we’ve gone two years later and it doesn’t seem quite fair to me and as you said argentina at the end of last year had 41 billion dollars of outstanding loans from the imf from the

International money management fund was sub-saharan heartbreaker only had 34 which means that that’s 30 dollars per capita and ssa versus about 900 per captain in argentina i cannot understand this and everybody’s complaining about other countries like china and private sector lenders getting involved in sub-saharan africa but the fact is that the capital is not

Coming from somewhere else and that’s why why they need to access this new capital and and let’s face it the some of the new imf loan programs out there for sub-saharan african countries uh have this zero ncb so the zero non-concessional borrowing uh limit set on their private sector landing so that means essentially they cannot borrow any new money from private

Sectors in a way you know it’s it’s putting a straight jacket on many of these countries with the justification being that you know they don’t get themselves highly indebted but there is some certain unfairness there which i don’t quite understand so is it a case of that there’s not enough of an african voice within these uh international institutions will be

The case um and the other thing is maybe south america is closer to the western hemisphere where washington dc is where that time zone is it could very well be maybe sub-saharan africa itself needs to increase its this awareness but let’s face it also sub-saharan african countries and governments also need to come forward and say we are reforming we are fighting

Issues like uh corruption all these type of things to move on with the reform path and also to empower their populations and their electorates to be able to grow out of uh poverty that has hit so many countries in in the region and in the continent but that’s the thing now because those reforms i mean how long do you think those could take because i understand

That of course the imf also needs to make sure that the countries convince them that they are actually doing something to kind of stabilize their economies no you’re absolutely right and and i think we need to see uh the larger countries in sub-saharan africa lead the way countries like south africa for example countries like nigeria kenya ethiopia on this reform

Path and to show the world that these reforms are taking grip and taking hold and until that happens it looks very difficult for the other countries to be able to gain access to this capital one outstanding country there is uh angola for example who last week in in washington’s received very clear positive vibes from investors from the international financial

Institutions given the reforms that you’ve discussed uh that have been put in place vat increasing tax intakes uh it letting the currency flexible eyes to move in line with markets all these type of things and then fighting inflation with us with an independent central bank all these all these different factors are very important so we need to see a combined effort

From sub-saharan african governments and also international financial institutions and the international community this doesn’t look difficult africa is not getting as much support that it should be getting from international institutions and of course also with the synchronized but uncoordinated efforts by central banks to hike interest rates so on the interest

Rate hikes i think emerging markets in general are way ahead of developed markets and i’m an optimist here i think that we’re reaching sort of the peak on global inflation so as we move ahead in the next three to six months i think we can start seeing headline urine your inflation falling across the world led by the united states which will release some pressure

On emerging markets and then we all can breathe a sigh of relief but in the meantime you know let’s just see these reforms let’s just get on with it and you know not hear about all kinds of different stories about things that are going wrong and and empower populations please yeah all right well thank you very much for that plea and i’m hoping that the relevant

People are watching thank you for your time and your insights assignment that was emerging market economist at a gym corporate simon keanu evans foreign

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Watch: Focus on funding emerging market economies By Business Day TV