BY BENARD AYIEKO
Africa – home to seven of the ten fastest growing economies as ranked by IMF indicates that the continent performed better economically compared to other regions of the world. This is largely attributed to the continent’s increased regional mobility, rapid urbanization and population growth – leading to increased demand for manufactured products and services. Most developed countries recorded mixed fortunes in their socio-economic and political front ranging from depressed economic growth, political fragmentation and polarization, among others. Some economies recorded accelerated growth such as; Nauru, Ethiopia Turkmenistan, Qatar, China, Rwanda and Ghana which registered a percent growth rate of 16, 9.8, 9.5, 8.2, 8.2, 7.4 and 7 respectively. Here are the main events that will shape the world in 2018.
The change in global climate patterns attributed largely to the rise in the levels of atmospheric carbon dioxide will remain a major issue of concern to the world. Kenya is among the countries that are expected to suffer from the negative impacts of climate change more so in the agricultural sector. A key focus will be on the U.S. intention to withdraw from the Paris Climate Agreement – an accord of 195 States within the United Nations Framework Convention on Climate Change (UNFCCC) meant to deal with greenhouse gas emissions. The withdrawal of the U.S. – which has been offering moral leadership in the fight against global warming – from the deal has attracted global condemnation and the world will keep an eye on America’s next move and how her withdrawal will hurt the deal, the war on climate change and the consequences for her diplomatic relations with other nations.
On the issue of national debt, Alexander Hamilton, one of the founding fathers of the United States is quoted; “a national debt, if it is not excessive will be to us a national blessing”. What has remained debatable is how excessive and perilous can debt be to an economy. The Institute of International Finance reported last year that the rapid rise in global debt from $70 trillion to over $215 – equivalent to the 325% of the global GDP – in the last decade is a major concern to the financial instability of the global economy and could easily render most economies susceptible to recession. Locally, there have been incessant discussions on the public debt with IMF cautioning on the need to control the rising debt to ensure that the current economic growth is not interrupted by adverse debt shocks.
East vs. West & U.S
The two leading global economies will keep racing against each other in 2018 with the Chinese and the U.S economies expected to grow at 6.4% and 2.5% respectively. The going-ons in these economies tend to have an impact, and shapes the direction that domestic and international economies take in dealing with economic issues. The success of the developing economies will largely be determined by the nature of the U.S – China relationship. In Africa, we have seen a scramble for increased trade and infrastructural development between the East and the West & the U.S. The battle for Africa that’s devoid of strong-arm tactics but soft power games of economic and humanitarian aid, interest-free loans, preferential trade agreements and investments will mostly shape the economic journey of most economies in the world.
With it came the exit of PM David Cameron and the entry of PM Theresa May whose government has invoked article 50 of the Treaty on the European Union and it is expected that 2018 will see formal withdrawal procedures executed to pave way for a formal exit on 29th March 2019. What initially had been billed to bring financial gains for the British public is turning out to be a great risk to the Britons working in the EU and to the economy in general. Economists are already forecasting a recession manifested in annual GDP loss of between £20 billion to £180 billion on exit than remaining in the EU.
Last year, cryptocurrency, including Bitcoin, Monero, Ethereum, Ripple, Litecoin, Dogecoins, among others took center stage in financial markets attracting both optimism and pessimism in equal measure. They are used primarily outside banking and governmental institutions, and exchanged over the Internet. The total market capitalization of cryptocurrencies has surged beyond $100 billion; a momentum which critics say could be a sure sign of a bubble that will burst soon. With a bitcoin, one can buy goods, invest, mine and make payments for transactions. Some financial regulators including Kenya, Australia, New Zealand, Japan, South Korea and Singapore have warned their citizens to be extremely cautious about buying cryptocurrencies due to their unregulated nature that may lead to bans in some jurisdictions. There is speculation that G20 countries will meet to regulatory framework for cryptocurrencies.
FIFA World Cup
The World’s highly watched sport will be staged in Russia from 14t June to 15 July. This will be the 21st edition of the FIFA World cup, a quadrennial international football tournament contested by 32 teams from 5 confederations. Iceland and Panama are the only teams that will be qualifying for the World Cup for the first time with Iceland being the only smallest country to have qualified for the tournament in the history of the game. The economic value of this tournament to both the domestic economy of the host country and the global economy cannot be gainsaid. In 2014, Brazil hosted the event that attracted over 3.7 million tourists, expanded her GDP by $30 billion, generated 3.63 million jobs per year and raised additional $8 billion in tax revenues. According to FiFa.Com, the tournament viewership was 3.2 billion people across the World with over 1 billion watching the final match between Germany and Argentina. These, among other events, will be the key global events that will shape the New Year and may its birthplace rest in your heart of hopes.