International Monetary Fund (IMF) Senior Resident Representative in South Africa, Dr Montfort Mlachila, recently presented a public lecture titled Private Investment to Rejuvenate Growth in Africa at the Graduate School of Business and Leadership.
The lecture was the first in a series to be hosted by the Macroeconomics Working Group (MWG), a body of economists comprising academic staff and postgraduate students from the School of Accounting, Economics and Finance (SAEF). MWG efforts have also resulted in Mlachila becoming Honorary Research Fellow at the University.
Income trends in sub-Saharan Africa, oil price disturbances, debt vulnerabilities, low rate of private investments, institutional reforms, improving opportunities for profits and additional ways to jump-start private investments were the key points of Mlachila’s talk.
Mlachila stated that growth in sub-Saharan Africa accelerated significantly from the 90s until 2015 when it began stalling.
‘Oil exporting countries and commodity exporters have suffered a lot following fluctuating oil prices and subsequent effects on exchange rates. Poor policy synchronisation has worsened the problem in some countries.
‘Private investment is clearly too low, leading to low economic growth rates relative to other parts of the world. sub-Saharan Africa has also been falling short of attracting foreign direct investment which could support private investment. In South Africa, local companies have been investing abroad more than in the country. We need a conducive macroeconomic environment coupled with quality leadership and good governance to jump-start private investment and attract foreign direct investment and consequently achieve high economic growth,’ explained Mlachila.
MWG founder and College of Law and Management Studies Acting Dean of Research Professor Harold Ngalawa said that having an expert of Machala’s calibre addressing students and academics of contemporary finance and economics is part of the organisation’s commitment to enriching teaching and learning.
‘MWG embraces the University’s position of promoting high quality and high impact research. This is why the organisation is working with the industry to ensure that our research is not only relevant but also of high quality’.
The Dean and Head in the School of Accounting, Economics and Finance, Professor Mabutho Sibanda, said that the School’s focus is on macro-economics hence they are looking forward to ensuring that MWG is a unit by the end of the year and a stand-alone entity in future.
Words: Thandiwe Jumo
Photograph: Albert Hirasen