BRICS Bank: Africa must rise to the occasion
Mobilising resources for infrastructure and development projects
During the BRICS Summit held in Durban, South Africa, in March this year, BRICS leaders reached a consensus regarding the formation of the BRICS development bank. The bank is expected to:
At present time, South Africa is viewed as a favourable and best option to act as the base for the BRICS development bank. During the World Economic Forum sessions on BRICS, a common sentiment was that it is time for Africa to rise to the occasion by acting as a base.
Infrastructure and capitalisation
Investment in infrastructure is set to be the focus point of the development bank in the initial phase. This is due to the fact that it is seen as the backbone, and a key driver, of economic development for BRICS. Yunus expressed a hope that majority of these infrastructure funds will be directed to Africa where the infrastructure deficit poses as an impediment to sustainable economic growth.
Capitalisation of the bank was and is a major discussion area, as the bank is expected to require an initial capital of US$50 billion. This money is to be raised amongst the BRICS countries. The countries will either equally contribute US$10 billion or contribute as each is able. As the smallest of the BRICS countries, whether South Africa has the capacity to contribute US$10 billion is a matter of the Finance Minister discussing it and getting agreement as to how the capital would be raised.What are your views on the BRICS development bank, and do you think infrastructure is an apt focus area?
For the full story, read Yunus Suleman’s comments here. During the World Economic Forum on “Delivering on Africa’s Promise” we posted a series of posts relating to the subjects discussed. Read more here