Lesetja Kganyago: The contribution of capital flows to sustainable growth in emerging markets

Text of the 2023 Michel Camdessus Central Banking Lecture by Mr Lesetja Kganyago, Governor of the South African Reserve Bank, at the International Monetary Fund, Washington DC, 11 July 2023. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you for the honour of inviting me to give this lecture. Considering the people who have previously spoken at this forum, considering the stature of the audience here today, and also considering the legacy of Michel Camdessus, who led the International Monetary Fund (IMF) for so long, it is a great privilege for me to be here.

My subject today will be the role of capital flows in emerging market growth.

I want to start with a problem that has often bothered me. As the South African central bank Governor, I regularly meet with global investors to discuss economic conditions and policy settings in my country. The fundamental goal of these engagements is to encourage investment. Then I return from these meetings, and we have policy sessions where staff want to talk about the dangers of capital flows. But the investors I just met are the people who are responsible for the capital flowing. So, I wonder – which part of my time am I wasting? Do we want these capital flows or not?

This is a global discussion, and one that has evolved significantly over my time working in macroeconomic policy.