President Zuma responds to budget vote debate

Thursday, July 24, 2014

Cape Town – President Jacob Zuma said the gains that await developing countries through the BRICS New Development Bank will far outweigh the cost of establishing the bank.

Responding to a debate on the budget vote for the Presidency on Thursday, the President said it was important to look ahead to how much the bank would contribute towards helping developing countries access funds for development.

The President said this in response to comments made by COPE Parliamentary leader Mosiuoa Lekota, who had asked the President if South Africa could afford to contribute its share of the contingency reserve fee.

“It is important to note that the benefits of participating in the New Development Bank by far outweigh the costs of establishing it. 

“The bank will complement existing sources of financing to cater for the ever increasing development needs in areas of energy, rail and road, and other economic infrastructure,” he said.

The President said that initially, South Africa’s contribution would be in the form of paid-in capital of $150 million.

This amount is part of the schedule of instalments agreed to among all members, he said.  

“The Bank will have authorised capital of $100 billion, with $50 billion subscribed. All countries will contribute equal capital to the bank.”

President Zuma said the bank would have a different modus operandi. While other banks currently made it difficult for developing countries to borrow or access funds, the New Development Bank would help developing countries get access to the money they need for infrastructure investment and other developmental projects.

The five members of BRICS - Brazil, Russia, India, China and South Africa - laid out the designs of the bank and the Contingent Reserve Arrangement (CRA) in a declaration released following their recent sixth summit in Brazil.

The new bank will be based in Shanghai, China, while an African regional centre of the bank will be located in South Africa. The regional centre will be opened concurrently with the headquarters before the first loan in 2016.

Each country will pledge a total of US$100 billion to a common pool - with China contributing the most (US$41 billion), Brazil, Russia and India contributing US$18 billion each, and South Africa contributing US$5 billion.

President responds to DA, EFF debates

On Wednesday, DA leader Mmusi Maimane said the future looked bleak for his younger sister because he believed that the economic and service delivery situation in the country was not at a satisfactory level.

In his response, President Zuma said Maimane and his family currently enjoyed the benefits that come with democracy because selfless leaders fought for the country’s freedom, with most even sacrificing their lives during the struggle.

“Honourable Maimane and his family are better off in South Africa today because the ANC is running this country.

“The very fact that Honourable Maimane is in Parliament today leading the Opposition, is due to the opportunities that freedom and democracy brought to young people in this country, thanks to the ANC.”

President Zuma also responded to EFF leader Julius Malema’s claims that government misled the people of Vhembe in Limpopo when a promise was made that a new hospital would be built, and further claimed that the promise of water to the people of Giyani had also not materialised.

The President said the re-development of the commissioning of the new hospital is scheduled to be completed by April 2018.

“Tenders for the building of the staff housing units closed on 11 July 2014.  The estimated cost of construction is R140 million.

“[For] Siloam hospital, the tender process is currently underway and that while construction was expected to start in August next year, the project would take 39 months.”

He said the Giyani water problems were as a result of the fact that the infrastructure was under strain due to lack of maintenance of infrastructure, which includes boreholes, reticulation pipelines, stand pipes, water treatment works and booster pump stations.

“The Mopani District Municipality is refurbishing the Giyani Water Works at a cost of R20 million. Work is expected to be completed by September 2014,” he said.

He later used his speech to call on MPs to conduct themselves in a respectful manner and while they may not agree with political parties in opposing benches, they should at least disagree in a respectable manner as voters looked up to them as the leaders of society. – SAnews.gov.za