Brics bank opens, but no word on Nene’s role
THE New Development Bank is formally open for business‚ the Treasury said yesterday.
This follows the signing of an agreement late last month between China and the New Development Bank regarding the bank’s headquarters in Shanghai. The agreement completed all the necessary legal procedures for the bank to begin operations.
It is preparing for its first projects‚ which could be launched next month.
According to the bank’s media statements from Shanghai‚ it aims to lend up to $2-billion (R30.79-billion) this year.
The bank would place a lot of emphasis on the speed of its financing‚ the bank’s president‚ Indian banker KV Kamath said.
He said the first projects would be green-energy ventures and infrastructure projects in member countries.
The Treasury said the bank was establishing its African regional centre in Johannesburg and had begun the process of recruiting staff.
Former finance minister Nhlanhla Nene said he had not received any further clarity about his position at the bank in South Africa‚ the reason given by President Jacob Zuma for his sudden removal from office in December. The president said Nene had been removed as finance minister so he could head the regional centre.
The 2016-17 budget review noted that South Africa’s first instalment of R2-billion to the bank was paid last year and made provision for further commitments of R11.8-billion over the next three years (R3.75-billion this year) to fulfil South Africa’s obligations to the bank. Given the government’s straitened fiscal circumstances‚ this commitment has required the reprioritisation of spending in other areas.
With India providing the bank’s president‚ the bank’s four vice-presidents come from each of the other Brics member countries (Brazil‚ Russia‚ China and Souith Africa).
South Africa’s vice-president is Leslie Maasdorp‚ who‚ as chief financial officer‚ will be responsible for treasury and portfolio management as well as the finance‚ budgeting and accounting functions.
The bank was set up by Brics members with the aim of financing infrastructure and sustainable initiatives.
It has been estimated that developing countries will need additional spending of almost $1-trillion (R15.38-trillion) a year for the next 20 years to meet their infrastructure requirements.
