Finance ministers from various Commonwealth countries have called for a systemic reform of the global financial architecture to enhance access to development financing for vulnerable countries

Their collective call for reform came at the Commonwealth Finance Ministers High-Level Working Group Meeting in Washington D.C. on 14 April 2023.

At the inaugural Commonwealth Finance Ministers High-Level Working Group Meeting held on the margins of the 2023 World Bank Group and International Monetary Fund (IMF) Spring Meetings, finance ministers discussed national fiscal policies, measures for financial sustainability, eligibility criteria for development finance and potential reforms required for a more equitable financial architecture.

In their call, ministers stressed that any reforms must increase funding and consider the realities of vulnerability when allocating support to help vulnerable countries invest in resilience and achieve sustainable development.

In her opening remarks, the Commonwealth Secretary-General, the Rt Hon Patricia Scotland KC said:

“Our world faces overlapping, interlinked and accelerating economic, security and environmental challenges. They entwine and accelerate to amplify existing inequalities, threatening stability, resilience and development prospects.

“The need for ambitious, systemic change has never been greater. As the Commonwealth family, representing one-third of humanity, we are joining forces to call for reform of the global financial system to deliver an architecture that is multi-dimensional, fit-for-purpose and adaptive to emerging and existing challenges, with a view to building long-term resilience and achieving sustainable development.”

She continued: “To create meaningful change, the global financial system must take into account the realities of vulnerability when allocating support to developing countries.”

In this regard, Secretary-General Scotland highlighted that the Commonwealth’s Universal Vulnerability Index provides a solid basis to better target support for those who need it the most.

Delivering a keynote address at the working group meeting, the Prime Minister of Barbados, the Hon Mia Mottley, said:

“One sure thing is that the status quo is not working for us. The continued discriminatory treatment between the global north and the global south really cannot continue, especially in a poly-crisis … The time is now for action and to ensure that the global financial system is fit for purpose.”

The working group meeting also gave ministers an opportunity to focus on the urgent need to influence the global financial architecture, which is still underpinned by fiscal rules and conditions deemed unfit to meet the needs of the current global economic landscape and overlapping challenges.

Eligibility criteria for accessing concessional finance are based on sole metrics of gross national income (GNI) per capita, which mostly disregards national vulnerabilities. However, recent overlapping crises have exposed and provided evidence of countries’ susceptibility to external shocks. The traditional rules and governing conditions for access to international development finance are no longer relevant in this era of interlocked and overlapping crises.

The Commonwealth Secretariat paper entitled ‘Fiscal Policy Options for Resilient and Sustainable Development’ considers the multi-dimensional vulnerabilities and socio-economic development challenges faced by countries and recommends several fiscal and policy reforms to facilitate more resilient and sustainable development outcomes.

Speaking at the meeting, Dr Ruth Kattumuri, Senior Director of the Commonwealth Secretariat’s Economic, Youth and Sustainable Development Directorate, said:

“Collaboration among Commonwealth countries [through this group] would enable knowledge exchange, and facilitate data sharing, research and toolkits, including use of Environmental, Social and Governance (ESG) practices to monitor and accelerate progress on sustainable investing toward enabling an environmentally responsible economy and society, together with protecting our planet.”

The ministers agreed for India to be the chair and Nigeria to be the deputy chair of the Finance Ministers Working Group for a Commonwealth Call for Reform of the Global Financial Architecture.

Zambian Finance and National Planning Minister Dr. Situmbeko Musokotwane had a productive meeting with outgoing World Bank Group President David Malpas at the World Bank’s headquarters in Washington DC on Thursday. The meeting, which lasted over 45 minutes, saw Dr. Musokotwane appeal to Mr. Malpas to continue his push for resolving Zambia’s debt crisis and urged him to maintain his advocacy for a balance of development opportunities between better-off countries and emerging economies like Zambia.

During the meeting, Dr. Musokotwane expressed his optimism for the World Bank to continue providing resources for promoting private sector investments to accelerate Zambia’s development programs. He also reiterated the Zambian government’s commitment to providing a conducive business environment. In response, Mr. Malpas congratulated Zambia for the progress made in implementing reforms “under very difficult circumstances” and reiterated the government’s call for all creditors to work together in resolving the debt treatment deadlock.

The World Bank team, which included WBG Vice President for East and Southern Africa Victoria Kwakwa and WBG Vice President (Operations) Samuel Maimbo, requested Zambia’s input in reallocating resources from slow-moving and idle programs under its country portfolio to needy areas. The team also reiterated its commitment to supporting private sector initiatives under the digital economy, youth jobs, mining, agriculture, the green economy, and other eligible transformational ventures.

Dr. Musokotwane is leading a high-level team at the ongoing Spring Meetings of the International Monetary Fund and the World Bank Group, which began on Monday, April 10th, and will end on Sunday, April 16th, 2023. The meetings are focused on finding solutions to global economic challenges, including debt relief, climate change, and economic recovery in the wake of the COVID-19 pandemic.

By BENEDICT TEMBO

GOVERNMENT is in the process of amending the Cotton Act No. 21 of 2001 in order to address some of the challenges, stimulate production and attract more players to the sector.

Minister of Agriculture Reuben Mtolo has appealed to cotton farmers and other stakeholders to make submissions to the review of the Act so to ensure that the law is responsive to the needs of the sector.

In a speech read for him by Seed Control and Certification Institute director Francisco Miti at the field day at Cotton Development Trust in Magoye on Thursday, Mr Mtolo noted that various challenges have resulted in many farmers giving up cotton growing and consequently a decline in cotton production.

“Of special mention here is the prevalence of numerous cotton pests whose control and management constitutes a substantial cost to the farmers, further reducing their profit margins and incomes,” Mr Mtolo said.

He said though the price of seed cotton offered to small scale farmers has been steadily rising in the past years, it is still not the best as it is not cost reflective because of the high costs of inputs including labour in the production of seed cotton.

Mr Mtolo urged researchers, the Cotton Board of Zambia and ginners to promote the adoption of low-cost sustainable cotton production technologies for the small-scale farmers in order to improve their gross margins.

At the field day whose theme was “Promoting Sustainable and Regenerative Agricultural Technologies Amidst Climate ChangE, ” Mr Mtolo said the price setting of seed cotton must also be transparent and fair for both players, the farmer and ginner so that there is equitable sharing of not only risks but also benefits.

“Furthermore, I am aware that the ginners are prepared to invest in adequate input and extension provision but the risks are too high because of poor loan recoveries resulting from side buying and selling. I would like to urge the farmers to pay back their loans by selling their contracted crop to the ginners in order for them to sustain their investment. This will lead to improved and enhanced relationship between the small-scale farmers and the ginners,” he said

Mr Mtolo said there is need to train farmers on mitigation and adaptation strategies in order to counteract the effects of climate change.
“There is also need to enhance trainings on good agricultural practices alongside improved supply of good quality and affordable inputs,” he said.
CDT director Lwishya Silwimba said it was regrettable that despite the services CDT offers, it also faces unique challenges such inadequate resources to enhance extension and training to small scale farmers, inadequate farm equipment, including tractors as well as inadequate farm land to do the seed multiplication and inadequate transport.

He appealed stakeholders and collaborators to assist CDT in alleviating some challenges by coming on board.

“This will in turn have a positive impact on the productivity and national production of seed cotton among the small scale farmers in the rural areas,” Mr Silwimba said.

And Mazabuka District Commissioner Oliver Malambo commended all the institutions working with farmers to increase production of cotton in Magoye.
Mr Malambo said CDT needs support for it to continue playing a meaningful role in cotton production in the country.