Tuesday, 19 April 2022 18:14

ANC names Mamoloko Kubayi-Ngubane as head of economic transformation.

By Lehlohonolo Lehana.

The African National Congress (ANC) has appointed Human Settlements minister Mmamoloko Kubayi-Ngubane as head of economic transformation.

Kubayi-Ngubane, 43, succeeds Enoch Godongwana, who relinquished the powerful party position after being appointed finance minister in August. A statement on Kubayi's appointment will be issued later, ANC spokesman Pule Mabe said.

"The ETC subcommittee plays a critical role in driving our policy decisions around economic transformation, but it also assists in populating our responses on a number of economic interventions that are being undertaken in the country," Mabe said.

Kubayi-Ngubane is currently serving as acting finance minister while Godongwana is in Washington attending the IMF Spring Meetings, the Finance Ministry said in an emailed response to questions.

She is co-chair of the Cabinet's economic cluster along with Minerals & Energy minister Gwede Mantashe. Kubayi-Ngubane has been touted as a contender for the position of deputy president of the ANC when the party holds its elective conference in December.

A former tourism minister, she faced criticism last year for championing Black-ownership as a requirement for access to a fund created to help the industry overcome the effects of the coronavirus pandemic.

Kubayi was appointed as minister for human settlements in August. Her department will play a key role in relief efforts after South Africa's worst flooding in almost three decades claimed more than 400 lives in two provinces and destroyed thousands of homes.

Meanwhile the International Monetary Fund slashed its world growth forecast by the most since the early months of the Covid-19 pandemic, and projected even faster inflation, after Russia invaded Ukraine and China renewed virus lockdowns.

Global expansion will slow to 3.6% in 2022, down from a forecast of 4.4% in January before the war, the IMF said in an update to its World Economic Outlook released on Tuesday. That compares with 6.1% growth in 2021. The institution also lowered its projection for 2023 to 3.6% from a prior 3.8%.

The fund sees inflation for this year at 5.7% in advanced economies and 8.7% in emerging and developing countries, significantly higher than just a few months ago. The pace of consumer-price increases is expected to slow to 2.5% and 6.5% respectively in each group of nations in 2023.

The IMF cited a rising risk that inflation expectations become unanchored, prompting more aggressive central bank tightening.

The Washington-based fund expects Ukraine's economy to contract 35% in 2022 as a direct result of the invasion. Russia’s output may shrink 8.5% due to sanctions imposed by western nations and a loss of confidence in the country.

But the impact of President Vladimir Putin's aggression will spread far beyond the two countries. The invasion is sending commodity prices soaring, raising the cost of food and fuel, and stoking unrest and protests around the world, from Sri Lanka to Peru.

In the US and some parts of Europe, inflation is accelerating to the fastest level in decades, spurring expectations for central banks to tighten monetary policy faster than previously foreseen.

The war is causing the fund to lower gross domestic product expectations for 143 of its member economies – a group that accounts for 86% of global output, managing director Kristalina Georgieva said last week.

"In the matter of a few weeks, the world has yet again experienced a major, transformative shock," Pierre-Olivier Gourinchas, the IMF’s new chief economist, wrote in a foreword to the report. "Just as a durable recovery from the pandemic-induced global economic collapse appeared in sight, the war has created the very real prospect that a large part of the recent gains will be erased."

The euro area got a particularly sharp downgrade, with growth projected at 2.8% for this year, down from a previous 3.9% estimate.

The US is expected to be less affected by the war and grow 3.7% this year, down from a prior 4% projection, reflecting a faster tightening of monetary policy by the Federal Reserve.

China’s economy is expected to grow 4.4%, down from a prior 4.8% estimate. That also compares with the government’s official target of about 5.5%.

Overall, the IMF forecasts advanced economies will grow 3.3% and sees emerging markets and developing economies expanding 3.8%, down from prior estimates of 3.9% and 4.8%, respectively.

The IMF's baseline forecast assumes that the conflict remains limited to Ukraine and that sanctions on Russia and European plans to become independent of Russian energy don’t tighten beyond those announced by the end of March.