The New Development Bank, which was recently formed by the BRICS countries, is set to mobilise infrastructure resources for developmental projects for the African continent.

Speaking about South Africa’s tenure as BRICS Chair at UNISA on Friday, International Relations and Cooperation Minister Maite Nkoana-Mashabane said South Africa’s interaction with the BRICS states is premised on three levels of engagement.

On the national level, South Africa will advance its own interests. At a regional level, the country will promote regional integration and interaction with specific emphasis on the African Union mandate given to President Jacob Zuma to promote infrastructure development across the continent. On the global level, South Africa is advocating for a more inclusive global governance system.

“The Africa regional centre will not rotate. It is going to focus on the things that Africans have asked from us as South Africa, which is to promote infrastructure development across the continent,” said Minister Nkoana-Mashabane.

Infrastructure development, she said, will go a long way in unleashing the economic potential, competitiveness and create jobs for the continent. Africa is emerging as one of the fastest growing markets, with the potential of future growth due to the new consumer market that is emerging.

The New Development 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.

Bank operations

The bank will have a starting authorised capital of $100 billion, of which $50 billion will be pledged.

The five countries decided that the first chair of the Board of Governors shall be from Russia, the first chair of the Board of Directors from Brazil, and the first President of the bank from India.

The leaders also laid the foundation for the establishment of the Contingent Reserve Arrangement for times of financial crisis. Each country will achieve this by collectively pledging a total of $100 billion to a common pool — with China contributing the most ($41 billion), Brazil, Russia and India contributing $18 billion each, and South Africa the least ($5 billion).

Minister Nkoana-Mashabane indicated that the idea of the bank was first mooted by South Africa and delivered to Brazil under their chairmanship of the group.

She said that what is imperative about the BRICS bank is that the member states are equal in access, shareholding, and representation in leadership positions. However, the minister reiterated that the bank was not against any formation but a contribution towards the development of a better world.

“Indeed, BRICS and the New Development Bank is a force to be reckoned with,” she said.

(SAnews.gov.za)