SA attends first BRICS bank meeting

International relations

Finance Minister Pravin Gordhan and a South African government delegation attended the first annual meetings of the New Development Bank (NDB) in Shanghai, China, recently.

“The BRICS [Brazil, Russia, India, China and South Africa] led institution utilised this event to take stock of its first year of operations, celebrating its achievements, whilst charting a course for the future,” said National Treasury.

At the meetings, the South African delegation was party to discussions on the bank’s five-year strategy, the role and scope of the Africa Regional Centre, as well as preliminary discussions on the expansion of the NDB’s membership.

The bank’s Board of Governors, on which South Africa is represented by Minister Gordhan, considered member countries’ development aspirations against the backdrop of an increasingly challenging global economic context.

The bank was established in 2014 and became operational in July 2015. The bank, which lends money to developing countries to help finance infrastructure projects, is seen as an alternative to the World Bank and the International Monetary Fund.

Its creation was first mooted at the Fourth BRICS Summit in New Delhi, with the subsequent eThekwini Summit in 2013 marking the start of official negotiations.

In its first year since its establishment, the bank has appointed an executive management team led by, internationally-renowned banker, K.V. Kamath. The bank has also finalised its core operational policies and processed its first set of loans, which includes a US$180 million facility for Eskom.

The NDB aims to challenge existing multilateral development bank convention in support of policies. The NDB wishes to distinguish itself as a bank for and by developing countries through the swift approval of loans and the provision of development support in domestic currency, among others.

In the year to come, the bank will continue on its ambitious path, including the recruitment of staff, mobilisation of additional resources in the capital markets and expansion of its investment programme.

In March, the bank announced that it had started its recruitment drive from member states.