New Development Bank a milestone for Africa

Thursday, August 17, 2017

President Jacob Zuma has launched the New Development Bank’s Africa Regional Centre (ARC).

The President described the launch as a major milestone for Africa as a whole. It marks the strengthening of the BRICS formation and also underlines the BRICS commitment to the development of the African continent and emerging markets.

“This is a critical milestone not only for South Africa, but for the African continent as a whole. We are thus celebrating it as a shared achievement,” said the President.

The idea of establishing a new bank with a new mission and orientation was first discussed in Durban in 2013, when South Africa hosted the BRICS forum, after which it was agreed to establish a centre in Africa to take care of developmental needs of the continent.

President Zuma said he is pleased with the progress the bank has made in two years of existence. These include the signing of the founding agreement of the New Development Bank, which paved the way for the opening of the bank’s head office in Shanghai, China. The issuance of the first set of loans – amounting to US $1. 5 billion dollars (approximately R20 billion) in total – to fund renewable energy projects in member countries is also a significant step forward.

President Zuma said government is confident that the NDB will build on these achievements and grow from strength to strength.

The NDB is a multilateral development bank to finance infrastructure and sustainable development projects. The bank will start the process of considering new members and finalise the project pipeline for the second batch of loans to be offered in the 2017/2018 financial year.

In his comments at the launch, NDB President Kundapur Kamath said the ARC will be the face of the NDB in Africa. The bank’s headquarters are located in Shanghai, China.

In 2017, the bank expects to approve loans aggregating between 2.5 billion and three billion US dollars for about 10 projects.

“In 2018, we expect to present total lending of about US $4 billion. The target is to end 2018 with a loan book of about $8 billion for projects,” Kamath said.

Unlocking Africa’s growth potential

President Zuma said African countries generally have inadequate infrastructure interconnections.

“As a result, we cannot maximise the benefits of regional trade. Worse still, the continent does not have adequate social infrastructure for the provision of basic services such as health and education, and we therefore are not able to significantly improve the living standards of our people.”

He said the continent has been unable to unlock its growth potential.

“Given the challenges, the African continent has great expectations for the New Development Bank. We expect that the bank, through the Africa Regional Centre, will contribute to accelerating infrastructure investment in energy, transport, water and other productive sectors,” said President Zuma.

The African continent, he said, continues to be plagued by poverty and human suffering. “We therefore call on the New Development Bank and like-minded institutions to test new boundaries, explore new possibilities and deliver sustainable solutions that will better serve humanity.”

The launch of the ARC is a turning point for the continent and its development, said President Zuma.

Meanwhile, Kamath said the NDB is appreciative of the strong support it has received from South Africa and that the bank believes South Africa offers attractive opportunities for fundraising.

“We [hope] to lend about $1.5 billion to South Africa for the next 18 months. We believe the South African market offers attractive opportunities for fundraising,” said Kamath. –

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