High expectations as BRICS new development bank to open African branch

 With the African branch of the BRICS New Development Bank (NDB) set to be opened later this month in Johannesburg, expectations are high for the NDB from all sectors in the country.

The bank is launched by Brazil, Russia, India, China and South Africa, collectively known as BRICS countries.

The bank is expected to fund infrastructural deficit and help address global economic governance, Cyril Prinsloo with the South African Institute of International Affairs, told a seminar in Johannesburg recently on the role of the NDB.

Prinsloo said the Bretton Wood Institutions -- the World Bank and International Monetary Fund (IMF) -- which were formed after the Second World War, do not reflect the realities of today.

"BRICS countries and developing economies have been frustrated with the Bretton Wood Institutions and expect the NDB to do things differently," Prinsloo said.

"One of the new things is openness and speed in lending money. Governments cannot afford to wait for two to three years for capital to start the projects."

He added the NDB is also expected to lend in local currencies as opposed to the IMF and World Bank, which were dealing in U.S. dollars.

Other new things expected for the NDB include the changing dynamics of the relationship between the financier and the recipient, Prinsloo said.

While the traditional financiers had a donor recipient relationship, the NDB is expected to have a partnership relationship, he said.

Marianne Buenaventure Goldman, a governance advisor of the Oxfam, a global aid and development charity, said they expect the NDB to observe some of the UN initiative of Sustainable Development Goals (SDGs).

"We expect stakeholders to engage civil society and think-tanks to assist governments to come up with a position on the NDB," she said.

Attorney Nomonde Nyembe with South Africa's University of Witwatersrand, said they expect the NDB to operate differently from "traditional funders".

Nyembe said the Bretton Woods Institutions have always favoured the North, leaving the South suffering, and that is expected to be addressed by the new bank.

She also urged a mechanism to be set up to hear voices of people affected by projects to be funded by the bank.

Juanna Hatfield, a senior development strategist with the Development Bank of Southern Africa, said all eyes will be on the bank to see if it would carve its own niche in the market and how differently it would operate.

"We are excited about the new bank. It has a fascinating model to emerge to finance infrastructure. It will also provide for the most needed bankable projects especially in the energy sector. The new bank will provide new space with variances," Hatfield said.

South Africa has proposed several projects to be funded by the NDB, including the Inga hydro power station in the Democratic Republic of Congo, a water project connecting it to Lesotho, electricity transmission lines in South Africa, and a water pipeline project in its Gauteng province.

Source: Xinhua