Caleb M Fundanga: Economic and environmental growth of Africa Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the 2nd Green Accord Media Forum, Rapolano, Italy, 3 November 2004. The references for the speech can be found on the Bank of Zambia’s website. * 1. *  *  Introduction  The world community faces unprecedented ecological challenges in the twenty-first century. Many political and business leaders have embraced the idea of sustainable development, calling for economic growth without destroying the natural environment or depleting the natural resources on which future generations will depend. Yet the concept has remained controversial, and implementation has been difficult. The task for policy makers and corporate leaders will be to find ways to meet both economic and environmental goals in the coming decade, without sacrificing either (Post-LawrenceWeber, 1999). In Africa, environmental issues are also frequently sidelined on most policy makers’ agendas due to insurmountable economic and social problems that the continent continues to face. Notwithstanding the economic and social hardships, as Africa constantly strives towards attaining economic development, environmental sustainability remains a key area of concern (UNEP, 2003) although usually remote to most economic policy makers. In addition, environmental sustainability is hardly seen by many in Africa as an underlying factor in economic development yet it is so critical that, if adequately and promptly addressed, will have positive secondary effects on other crucial areas pertaining to economic development and people’s welfare.

Appropriate grandfathering arrangements will be put in place in order to ensure a smooth transition. A further point highlighted by the crisis is the availability of resolution schemes that allow for speedy and decisive interventions in the event of bank failures or near-failures, averting deposit runs and limiting contagion effects on the wider banking system. Several initiatives in this area are under way both at the European and global levels. 14  12  The potential role of capital regulation (Basel II) in amplifying credit cycles is being investigated by a number of authorities and institutions, including the Basel Committee and the ECB. The consultative document issued by the Basel Committee on 17 December 2009 already includes proposals on: (i) mitigating the cyclicality of the minimum requirement; (ii) introducing forward-looking provisioning; (iii) building buffers through capital conservation; and (iv) mitigating excessive credit growth. The latter would imply the introduction of a countercyclical buffer requirement, which would come into effect during periods of excessive credit growth. The Basel Committee’s proposal is currently at an early stage of development and a fully-fledged version will be developed by the Committee in time for its June 2010 meeting. 13  See, for instance, F. Panetta and P. Angelini (coordinators), U. Albertazzi, F. Colomba, W. Cornacchia, A. Di Cesare, A. Pilati, C. Salleo and G. Santini, “Financial sector pro-cyclicality – lessons from the crisis”, Questioni di Economia e Finanza, No 44, Banca d’Italia, 2009.