The Sunday Mail
Sunday Mail Reporters
Sadc has opened discussions on forming a regional bank and tasked its finance ministers to formulate additional strategies to fund infrastructure development and industrialisation.
This is in line with Southern Africa’s Industrialisation Strategy, which was adopted by last week’s Sadc Extraordinary Summit in Harare.
Regional leaders are considering various funding mechanisms to kick-start an envisaged industrial revolution underpinned by integration, and the Sadc Development Bank came up during their discussions. It is believed the financial institution will be modelled along the same lines as the Africa Development Bank with member states contributing to its capitalisation.
Summit agreed to deliberate further on how this and other proposals can materialise.
Sadc ministers of industry, trade and commerce who spoke to The Sunday Mail on the sidelines of the Summit confirmed that discussions on the proposed bank had opened. Minister Gideon Dlamini of Swaziland said member states would be required to deposit start-up funds.
“There was a realisation that we need friendlier and focused development finance, and that is in the pipeline. It is more about creating something like a bank, a development bank — like a Sadc Development Bank — where we can all perhaps deposit capital money into,” he said.
“We made this proposal during the meeting and agreed that further consultations should be made. And because a bank is a bank and there is no free money, if you need money, you have to pay interest. Countries will deposit money into this development bank and as we borrow, we borrow to develop.
“It’s like an investment for the shareholding country just like we do in business. But the difference will be that it is our money and it is circulating among us rather than getting money from Europe, for example, and the interest goes to Europe and then we get nothing at the end of the day except the little profit you may get from that development. If it is our bank, everything circulates among us, then we can develop exponentially.”
South Africa’s Minister of Trade and Industry, Mr Rob Davies, said there was consensus that Sadc should generate its own funds for the Industrilisation Strategy instead of relying on donors.
“What was said – and I think it is quite correct – is that we are not going to be able to go to donors to fund industrial development. It’s not going to happen.
‘‘We are going to have to rely on some of our resources in the region. But there is a new facility, which is coming in and will probably play a role in infrastructure development — that is the Brics Development Bank, which is a new institution.
“The first regional office will be in South Africa. It was mentioned as one of the things to take account of, but the finance ministers are going to have to sit down and look at the options and develop some kind of funding strategy for regional industrial development.
“The funding has not been finalised. The secretariat is supposed to turn the strategy and document on industrialisation into an action plan by March next year. ‘‘We are also exploring the idea of the Sadc Bank and further discussions are going to be held on that.”
Sadc formulated the Industrialisation Strategy to drive the region towards value-addition and beneficiation and away from exporting natural resources in their raw form.
The proposed regional bank is one of the key enabling mechanisms, and will be similar to Ecowas Bank, which the Economic Community of West African States (Ecowas) has successfully established to fund projects in transport, energy, telecommunications, industry and environment, among other sectors.
