Challenges ahead in 2023

Author: Mr Karoli Ssemogerere is an Attorney-at-Law and an Advocate.

What you need to know:

  • The United Kingdom is officially in recession. Three Prime Ministers in one year, Boris Johnson, Liz Truss and Rishi Sunak.
  • A chilly winter and skyrocketing gas prices have pushed inflation above 10 percent.

The world in 2022 has been preoccupied by the Russia-Ukraine war which began in February and as at the end of the year is without a decisive victor. Vladmir Putin’s designs on Ukraine starting with the invasion of Crimea in 2014, are still ongoing.

Putin’s putsch is consistent with an aggressive nationalism, a desire to avenge the humiliation Russia underwent after the collapse of the Soviet Union 30 years ago and lastly a push-back against the North Atlantic Treaty Organisation (Nato) attempts to push westwards to its borders. On the third count, Putin has a pending membership for Ukraine to Nato.

Finland and Sweden have applied to join Nato ending decades of neutrality threatened by their long border with Russia. Frayed by the threat of war inside its borders, Europe rushed to cut ties to Russia, diminishing Russian oil supplies, crude oil and natural gas. But not quite. These ties negotiated in decades of East-West rapprochement, with Russia desperate for cash on the one side, and Europe weary of the US-stranglehold on the Middle Eastern oil markets have upset the continental political classes.

The United Kingdom is officially in recession. Three Prime Ministers in one year, Boris Johnson, Liz Truss and Rishi Sunak. A chilly winter and skyrocketing gas prices have pushed inflation above 10 percent.

In the United States, it took miracles of intervention, a late summer compromise by Joe Biden to pass a watered down energy-climate change bill stripped of its most essential provisions, tapping the energy reserves and sheer luck to the best performance by a party in the White House in the November midterms.

Elsewhere, the ruling parties have not been so lucky. CDU in Germany is out of power for the first time since 1994. Macron was re-elected after losing a majority in the legislature. Italy, Ireland have new prime ministers and more extreme political configurations have either acquired or retained power in Eastern Europe.

China in-between the Americans and the Russians is struggling with continuous outbreaks of Corvid-19 after early pandemic successes. The Chinese are roiling against pandemic era restrictions, a slowing economy and a more assertive President Xi Jinping. In the run-up to the decade-long party congress, term limits were dropped. China is exerting more control over Hong Kong leading to en-masse emigration of Hong Kong nationals to the United Kingdom. China’s much expected overtaking of the United States as the world’s largest economy hasn’t materialized. Big power politics sees China shorn of quick credit playing second fiddle as many countries are now running back to the West after a decade of borrowing that has left countries in substantial debt repayment stress.

Sri Lanka, Ghana, and many other countries reached the financial brink in 2022, and many others will join especially if post-pandemic economic recoveries continue to be affected by a strengthening US dollar. It is interesting that the goal of alternative economic formations, the EU or even China to reduce US dollar denominated transactions has not achieved its objective. A stronger dollar has been used by the United States to shore up its economy as investors fly to safety in US dollar investments while pushing up the cost for foreign currency transactions.

Closer to home, the DRC is threatening its smaller neighbors especially Rwanda with spillover out of M-23 conflict, ADF rebels made their first forays into Uganda. Officially intelligence sources label ADF, is now an offshoot of ISIS. Rapid militarization of the political systems is likely in subtle ways. In Uganda succession politics has current and former soldiers front and center. In Tanzania, the military accomplished a transfer of power after the death of John Magufuli cementing Tanzania as a beacon of stability in the region. In Kenya, a highly contested election ended in the Supreme Court of Kenya with an unanimous ruling by the court upholding the election of William S. Ruto as President.

High prices are likely to preoccupy everyone everywhere in 2023.

 Mr Karoli Ssemogerere is an Attorney-At-Law and an Advocate. [email protected]