Brics' New Development Bank could fast-track Africa infrastructure projects

8th March 2018 By: Anine Kilian - Contributing Editor Online

Brics' New Development Bank could fast-track Africa infrastructure projects

Photo by: Bloomberg

Africa lacks adequate infrastructure, which stymies regional trade and the provision of basic services such as health and education, New Partnership for Africa’s Development (Nepad) capacity development officer Bob Kalanzi said on Thursday.

Addressing delegates at a dialogue, hosted by Oxfam South Africa, about the launch of the New Development Bank (NDB), he said infrastructure was Africa’s top priority and added that the continent suffered from low levels of intra-regional economic exchange and had the smallest share of global trade.

“Bridging this gap can only be achieved through [greater] regional and continental cooperation, which could be achieved through support from the NDB,” he said.

The NDB, which is an initiative of Brazil, Russia, India, China and South Africa (Brics), was launched in Shanghai in 2016 and aims to mobilise resources for development projects in the Brics countries, as well as in other emerging and developing economies.

Kalanzi pointed out that infrastructure development in Africa must be prioritised to achieve the accelerated industrial development of the continent.

Further, the African Union’s (AU’s) Agenda 2063 aims to propel intra-African trade to 50% by 2045 and Africa’s share of global trade from 2% to 12%.

Kalanzi added that infrastructure also had the potential to raise gross domestic product by 2% and develop the backbone for rapid industrialisation across the continent, boosting capacity to generate more domestic resources.

“The NDB signifies developing countries’ coming of age and reflects their aspirations to stand on their own feet. It also focuses on funding sustainable development and infrastructure in member nations, as well as other emerging and developing countries,” he said.

He noted that Nepad, which is the coordinating and implementing agency of the AU, has recently seen innovative financing models like the NDB, which are able to support Nepad and AU priorities.

“We are currently guided by the AU Agenda 2063, which is a framework vision and document for the African Continent aimed at socioeconomic and sustainable transformation for the continent’s transformation,” he said.

He added that the AU also had a document called, ‘the First Ten-Year Implementation Plan’, which is focused on various priority projects that need to be implemented to fast-track development across the region.

“We hope the NDB, and especially the African Regional Centre (ARC) which was launched last year, can mobilise resources and partnerships towards implementing various infrastructure projects stipulated in the 2063 Vision and the First Ten-Year Implementation Plan, across the continent,” stated Kalanzi.

Meanwhile, Oxfam South Africa CEO Siphokazi Mthathi said the NDB ARC could offer a different way of working than other development finance institutions (DFIs), but only if it takes a pro-poor approach and engages in an open and transparent manner. 

She noted that the ARC, which is the South African branch of the NDB, offered a real and concrete opportunity for South Africa and other Brics governments to ensure that development financing is sensitive to the needs of the poorest and most marginalised.

“It also needs to focus on tackling inequalities that exclude women from accessing economic, social and political opportunities in Africa,” she said.

The ARC aims to mobilise resources and carry out projects for sustainable infrastructure and sustainable development on the continent. It is the first NDB regional centre to be opened, which will be followed by the launch of the Latin America Regional Centre, in Brazil, later this year.

“Brics has continued to challenge global governance structures through debates among emerging markets and the developing world. It was in response to the belief that global financial institutions lack democratic voting rights, that the NDB was created,” Mthathi noted.

The bank’s operational strategy emphasises sustainable infrastructure that incorporates economic, environmental and social criteria in its design, building and operations.

It claims to promote a “new” way of working in the way it engages in relationships, projects and instruments, and approaches. In aiming to diverge from traditional institutions that have not always respected the needs of local communities, it emphasises equality, mutual respect, trust and national sovereignty.

“Oxfam South Africa believes the bank needs to establish a structural framework for engagement with civil society organisations that will promote the transparent and accountable manner in which projects are chosen, implemented and monitored,” she noted.

Mthathi added that, as part of this, the bank should consider environmental and social safeguards that take into account communities' needs.

She highlighted that the funding model should focus on inclusivity, which she said was key, because DFIs on the continent had a reputation of undermining countries’ priorities, taking them away from their key developmental mandates.

“We have critiqued the International Monetary Fund and the World Bank for the way they impose budgeting on countries, undermining the capacity of governments to deliver on basic needs for their people. We want to see the NDB support development from the ground up,” she said.