AfDB Calls for Deeper Regional Integration - Tool for growth and employment creation in Southern Africa

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Pretoria, 14 March, 2011 - African Development Bank (AfDB) President Donald Kaberuka has affirmed his institution’s strong commitment to enhancing regional integration and growth in Southern Africa.

Addressing the media close to the end of a six-day official visit to the region, Dr. Kaberuka said the AfDB had done well in terms of the volume of its support to South Africa and the broader SADC region but still had to do more in view of the challenges that still abound.  

Dr. Kaberuka, who was in South Africa at the invitation of Finance Minister, Pravin Gordhan, held discussions with the Minister and other senior officials on issues of common interest to the AfDB and South Africa. South Africa is an important regional member country and a strategic interlocutor for the Bank, given the nature of its economy and the role it plays in the international arena, notably in the G20 and the forthcoming Conference on Climate Change (COP 17) in Durban later this year. The discussions underscored the AfDB’s portfolio investments in infrastructure, promoting regional integration and climate change.

Dr. Kaberuka’s programme included a visit to the University of Johannesburg Soweto Campus, as a guest of Minister Gordhan—an event organized in collaboration with the Greater Soweto Business Forum—where he heard first-hand from local entrepreneurs and business leaders about their challenges and aspirations. He said the AfDB would be looking into ways in which it could support small and medium enterprise (SME) development in South Africa as a means of helping to tackle the unemployment problem.  

The AfDB President paid a courtesy call on South African President Jacob Zuma and held a town hall meeting with faculty staff and students of University of Witwatersrand.

Regional integration is one of the four pillars in the AfDB’s approach to wealth creation in Africa and the region. Of a total portfolio size of US$5.2 billion, it has committed US$3.6 billion to regional integration over the last 15 years. “The AfDB remains particularly active in supporting regional integration. South Africa is the logical platform for regional integration in Southern Africa, given its economic size,” Kaberuka said. He added that the Bank “will continuously adapt its approaches to regional integration that go beyond a mere focus on having the right blend of investments in physical infrastructure. We shall lay emphasis on such important soft issues as having the right regulatory frameworks and agreements in place. This is crucial, for example, in promoting effective intra-regional power trade, the sharing of water resources and cooperation in the delivery of services.”

Finance Minister Gordhan expressed South Africa’s support for the AfDB’s regional integration strategy, with its renewed emphasis on strengthening institutional capacity to support infrastructure financing.

South Africa will chair the 17th United Nations Framework Convention on Climate Change (COP 17) which takes place in Durban later this year. Dr. Kaberuka, articulated, ahead of this event, the AfDB’s strong commitment to the climate change agenda for Africa. He said the Bank will mobilize financing for an Africa Green Fund and to promote the bankability of climate change projects. He explained that Africa, with the smallest carbon footprint in the world, was one of the most vulnerable regions, pointing out that there were huge opportunities to invest in clean growth and adaptation to climate change. He stressed that Africa had not had its fair share of access to financial mechanisms and resources in this area under the Kyoto Protocol. “African leaders have lent their support to the African Development Bank to play a lead role in terms of climate change financing,” said Kaberuka. “We have taken up this request and are working to establish an Africa Green Fund within the framework of the United Nations Framework Convention on Climate Change.”

Aloysius Ordu, AfDB Vice President for Country and Regional Programmes and Policy, re-emphasized Dr. Kaberuka’s position on making climate change a priority. “We do not view climate change as a separate activity,” Ordu said. “We are mainstreaming climate change in our operations and will prioritize in financing infrastructure projects that are climate resilient and climate friendly.”

Dr. Kaberuka also visited Zimbabwe and Swaziland. In Zimbabwe, the President stressed the importance for greater policy clarity and predictability, including property rights. This, he said, would create the enabling environment required to boost investor confidence. He urged the government to act quickly to agree on a debt management framework.

In Swaziland, Dr. Kaberuka conferred with the authorities on the economic challenges facing the country, given the severe fiscal constraints. He encouraged the authorities to quicken and deepen the pace of economic reforms, with special emphasis on a long-term sustainable fiscal plan, in light of declining Southern African Customs Union (SACU) revenues.

The AfDB recently opened up a regional office in Pretoria to service the SADC region.