EDITORIAL: INSURGENT MONEY

INSURGENT FINANCE

Something is rotten in the state of finance.Itis failing badly in these frenetictimesofclimate crisis,pandemics and galloping authoritarianism.And the fallout is producing some unlikely revolutionaries.TakeZambia, where achartered accountant wonan election by standing up forhuman rights andfreedomofthepress,andpromisingto rescue the economyfromacorrupt cabal.

Election victor HakaindeHichilema is toodiplomatic to callout the banks thatcollaboratedwithvenalpoliticians. But the story has asimilarpattern to the hiddenloans scandal playing out in Mozambique.Corrupt political and financial elitescolludedtosteal public funds,leavingthepovowiththebill.Enter the IMF and thedebt restructurers,while ageneration’s aspirations areput on hold.

Pull back the focus fora global view of financial dysfunction–fromnone otherthan DavidMalpass, president of the WorldBank and partisan forderegulation andlow-tax economies.UnderMalpass,thebankhaslagged behind theIMF on pushing fordebt relief and financingthe transition to renewableenergy.

In conversation with China’s premier,Li Keqiang,inDecember,Malpass appears to have had an epiphany. “Part of the inequality problem is global finance itself,and the unequalstructureofthe stimulus,” said Malpass.Prevailing sovereigndebt,fiscaland monetarypolicies were worsening inequality, he added. To drivepandemicstimulusprogrammes,richcountriesareusingcentralbank funds to buy long-term bonds; that’shighly profitable forthe bigbanksand corporates. But it’slocking out small businessesand developing economies from finance.

Pandemiceconomicshave highlightedthe urgent need to reform the financial system, but so will the imperatives of the transition to greenand sustainableeconomies.Atthe UN’s COP26 climate summit,former governorof Britain’s centralbank Mark Carneybrought together morethan400 companieswith cumulativeassets of morethan$130trn whoare committed to maketheir operations net-zero in carbon emissions by 2050.

Tremendous news forthe greentransition. But whose transition?Richcountries have rampedupspending to $20trn in response to the pandemic. But those same countries have failed to honour apledge, now12years old, to mobilise $100bna year in climate finance fordeveloping economies.And that $100bn ayearisarounding error compared with the $1trn-$2trn required each year in clean-energy investments in developing economies to achievenet-zero emissions by 2050,according to Jason Bordoff,climate advisor to former US president Barack Obama. Thosetrillions couldcome from the greencorporate barons.But voluntarism does not work in our dysfunctional financial system. The time has comefor aprogressivelevyonthe 28bntonnesofcarbon dioxide emitted by rich and middle-income countries each year.The IMF and the World Bank,with their regional counterparts,could collectand distribute this revenue forrenewable-energy projects in developing economies. Afirstand agreen step to levelupfinance.

#118 / January, February, March

03 EDITORIAL: INSURGENT MONEY 06 MAILBAG 10 COFFEE WITH THE AFRICA REPORT /

Amina J. Mohammed, UN Deputy Sec. General 12 THE YEAR IN IMAGES 18 QUIZ! 21 QUESTIONS ON 2021 20 OPINION: MAX SIOLLUN

Now Africa Must Tell Its Own Story

23 WHAT TO WATCH IN 2022

The battle between China and the US to secure green minerals, the long road to Nigeria’s elections, how to catch that Netflix cash, and more... 64 EAST AFRICA FOCUS

The region has an opportunity: to link Asian demand to African producers.

76 EXTRACTIVES DOSSIER

Wanted: billions of dollars of African gas, gold, cobalt and copper.

FEATURES 48 INTERVIEW / Hakainde Hichilema, President of Zambia

A former CEO at two international accounting firms and the second-biggest cattle rancher in Zambia, Hichilema is not everyone’s idea of a revolutionary. But he has also been a political prisoner, tortured in a Lusaka jail.

58 INTERVIEW / Kayode Fayemi, Governor of Ekiti State, Nigeria

The Chairman of Nigeria’s Governors’ Forum talks about security challenges, building democracy and the importance of devolution. Will this style of national reconciliation and pragmatism be in vogue come the 2023 presidential elections?

94 MOROCCO FOCUS

Rabat has reshaped its world view since the financial crisis, with a pivot towards anglophone countries.

105

COUNTRY PROFILES

The Africa Report’s experts dissect the political and economic year ahead for the 54 countries of the continent.

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