By Dustin Paul Wilden(ALAS Group Chairman)
Macroeconomic and geopolitical conditions have slowed down the global economy to a point, where an increase in the cost of living has significantly risen by an average of 8 percent on the global Index and the economy is at the verge of entering into a recession perhaps as early as next year.
The Global Gross Product Demand in various industry sectors of energy (gas and fossil fuels), aviation and food commodities, has drastically risen since the inception of the war in Ukraine, which coherently has mounted the pressure across different governments to forge sustainable solutions, to curb and control the seemingly inevitable global economic crisis.
The global financial and economic landscape is today in a perilous nosedive, which has inadvertently affected the general global supply chain with the dire effects being largely felt by the consumer. This is a result of input costs rise, which automatically will see an overall rise in commodity prices.
The world has gradually been recovering from the pandemic, which saw an influx and increase in the travel(transport)sector as the various countries began to open up to free movement, which ideally has played a key role in sustaining any given economy. Nonetheless, bearing in mind the political unrest in the east, the world has seen astronomical and significant segment rise in petroleum commodity prices. It is forecasted that the cost of travelling and cargo movement across different sectors is going to rise, affecting a nearly uneconomical and unsustainable situation.
Looking into Botswana in relation to the current global economic crisis, the country owing to both the covid 19 pandemic and political turmoil plaguing major strategic and economy driving nations, have seen the inflation significantly rising to about 12.7%, which subsequently promote a price increase for units in the consumer price bracket.
As a result, it is downscaling the overall consumer buying power, and effecting major eco-social challenges like mass loss of employment, as it generally becomes economically unsustainable to host a larger workforce and lack of job creation, all of which culminates to a rise on the general national poverty line.
It is therefore imperative and important at this stage to zoom in and forge economic and sustainable ways through which we can promote and encourage a transition from a consumer threshold to an independent producer threshold, which will inevitably lower the dependency index. This will strategically push employment creation and opportunities in the future.
Undoubtedly political Intervention is needed to solve the challenges ahead. The need for strategic partnerships between governments and the private sector in the form of Business to Government, Public Private Partnerships (PPP) and Foreign Direct Investments, cannot be over emphasised as these partnerships will serve to ensure sustainability and preservation of economies.