Browsing: Monetary Policy

Namibia debt-to-GDP

Namibia's debt-to-GDP ratio has continued rising further above the central government debt ceiling of 35% of gross domestic product as of March 2021. 

  • Namibia has consistently put out a series of measures to restructure the economy, enhance economic development, generate employment, and alleviate poverty and inequality.
  • Improving the business environment, promoting access to capital, improving governance, and reducing skills mismatches are crucial for stimulating growth and achieving long-term debt sustainability.
  • Implementation of the government’s fiscal reduction agenda is essential for debt sustainability.

Since its independence, Namibia has had an outstanding political stability track record.

Sound macroeconomic policies, moderate economic growth, poverty alleviation, and natural resource protection define Nambia's stability. The country has made significant accomplishments despite geographical limits. Namibia has confronted apartheid, colonial legacies, and the difficulties of establishing a national government. However, considerable obstacles persist.

Chronic massive unemployment, the devastation of HIV/AIDS, and one of the world’s most lopsided…

In a bid to combat inflation, central banks must evaluate the advantages against the possible adverse effects on their transparency and credibility, particularly in situations where monetary and fiscal policy frameworks are not firmly established.

  • Monetary and fiscal policy are two powerful tools that governments use to steer economies.
  • Public debt ratios have peaked at their highest levels in more than two decades, and several low-income African nations are in or near economic shutdown.
  • Experts have projected that total inflation in sub-Saharan Africa will reach 12.2 per cent in 2022.

Understanding monetary and fiscal policy

Monetary and fiscal policy are two powerful tools that governments use to steer economies. When applied correctly, these tools can similarly stimulate an economy and slow it down when it heats up.

Fiscal policy is when a government uses its spending and taxing powers to impact the economy. Monetary policy relates to the techniques a …

When investors understand the monetary policy subtleties, they position their portfolios to profit from policy shifts and increase returns.

  • The primary goal of monetary policy is long-term economic growth.
  • Monetary policy may be either restrictive or accommodative.
  • Changes in monetary policy may have a substantial influence on all asset classes.

Monetary policy relates to the techniques a country’s central bank uses to determine the amount of money in circulation and its value to the economy. The primary goal of monetary policy is long-term economic growth. Nevertheless, central banks may have several declared purposes to that end.

Some nations’ monetary policy objectives include promoting maximum employment, price stability, and low long-term interest rates. Others believe that keeping inflation low and steady is the most significant contribution that monetary policy can make to a productive and thriving economy.

Investors should understand monetary policy since it considerably influences their investment portfolios and net …

President Hichilema’s plan for kickstarting the economic recovery in Zambia included taming inflation, job creation for the youth, restoring the confidence of international investors and addressing external debt.

  • Hakainde Hichilema has guided Zambia towards economic recovery and stability since taking office in August last year.
  • COVID-19 pandemic, climate change, high debt portfolio and other headwinds decimated Zambia’s economy in 2021 to less than 3% of GDP.
  • The proven stability approach sets an example for other African nations looking to bounce back from a raft of economic and inflationary pressures.

The dawn of hope for Zambia

Hakainde Hichilema is one of the most successful businesspersons in Zambia. During the presidential election in 2021, Hichilema contested on a United Party of National Development, in which he is the party leader.

The six-time presidential candidate was, in August 2021, declared the winner of the presidential poll. His victory ended incumbent President Edgar Lungu’s

  • BoT says overall lending rates have declined from 16.65 per cent in November to 16.40 per cent in December 2021
  • Tanzania's monetary policies are designed to stimulate the economy to cushion industries from the economic devastation of Covid-19
  • BoT notes that the negotiated lending rates charged to prime customers remained unchanged hovering at an average of 14 per cent 

According to the Bank of Tanzania (BoT) monthly economic review, the overall lending rates have declined from 16.65 per cent in November to 16.40 per cent in December and may fall further as the prevailing monetary policies look to stir the economy. 

By comparison, rates are at the lowest point for the entire year compared to 16.61 per cent in the corresponding period in 2020. 

The country’s monetary policies are designed to stimulate the economy to cushion industries from the economic devastation of Covid-19. By lowering borrowing rates, the country is

  • Zimbabwe did not have a parallel market for foreign exchange in the years running from 2009 to around 2016.
  • Zimbabwe is heavily reliant on imported products and expends more foreign currency than it can afford.
  • Demand pressure has contributed to the fall of the Zimbabwe dollar resulting in general inflation.

To dollarize or not to dollarize?

This question has robbed monetary authorities of sleep as the Zimbabwe dollar falls precipitously on the parallel market.

Zimbabwe did not have a parallel market for foreign exchange in the years running from 2009 to around 2016.

It all began with the introduction of a surrogate currency that was fallaciously pegged at par with the United States dollar. The authorities initially posited that the surrogate currency was supported by a loan facility extended by the Africa Export-Import Bank (Afrexim Bank).

This loan it was said underscored the parity of the currency. It did not …