The Chairperson of the Global Central Bank Forum says climate change is negatively affecting the role of central banks, and there is a need for the banks to include that risk in their models.

Dr. Sabine Mauderer believes this will ensure price and financial stability, which are crucial in delivering economic growth and prosperity for countries. Dr. Mauderer was among the speakers at the 57th SADC Committee of Central Bank Governors meeting, held in Swakopmund.

The meeting took place during a time when the region and the rest of the world are battling high inflation, high debt levels, and low economic growth. Additionally, the effects of climate change, especially in southern Africa, have been taking their toll, and Dr. Mauderer says the role of the financial system needs to be defined in that regard.

"Amidst the impact of climate change, there are chances for growth and prosperity. We need to unlock solutions, and these solutions will only be found through an open dialogue bringing climate finance demands and finance supply together if investors find the right environment. And one point for private investors that is crucial is the risk we take from climate change, which is partly determined by the perceived stability of the macroeconomic environment. This is why we as central banks have to play our role; price and financial stability are our core mandates."

Prime Minister Saara Kuugongelwa-Amadhila highlighted the importance of coordinating efforts between the government and central banks to accelerate economic growth.

"GDP growth in the region continues to diverge, but output generally remains below potential with unemployment at higher levels. Whether these below-potential activity levels stem from structural or cynical factors, they are here now, and we must collectively craft ways to deal with them. I wish to reiterate our resolve to adapt and craft creative techniques and model climate-related shocks and their overall impacts on our economies, particularly the stability of our financial system."

Apart from finding solutions, the meeting is an opportunity to share updates on progress made in implementing the committee's strategy for 2021–2022, as well as craft the next three-year strategy.



Renathe Rengura