The BRICS call for their own Development Bank
At their meeting in Durban, the BRICS group put forward the proposal establishing a Development Bank under their auspices. This initiative was hailed by Donald Kaberuka, President of the AfDB.
A grand premiere in Africa, this decision was taken at the meeting held on the 26 and 27 March 2013. The continent welcomed the annual meeting of the BRICS group held in Durban made up of Brazil, India, China, Russia and South Africa joining these countries in April 2011.
« BRICS and Africa: “a partnership for development, integration and industrialization » was the theme of the 5th summit meeting of the BRICS hosted by the Rainbow nation –South Africa. The meeting was attended by a dozen of African leaders and heads of government.
It is worth noting that, precedent to the commercial and economic ties between members, trade exchanges between the BRICS countries and the entire continent are the centre of attention : in ten years they have multiplied ten fold to reach 340 billion of US dollars in 2012 – as against 282 billion dollars for the BRICS countries. The African continent has in the recent past been able to tap about 25 % of the total of direct foreign investments (DFI) from the BRICS group.
The summit meeting of the five major emerging countries in Durban was the occasion to make an important decision: the official launch of negotiations for the establishment of a « South South » development bank, which project was mooted in 2011, at the Summit held in New Delhi.
The role of this future multilateral banking institution: Financing infrastructure and development projects within the BRICS states and beyond. A crucial role, as was confirmed by the South African President Jacob Zuma: « We have decided to initiate formal negotiations for the establishment of a new development bank under the authority of the BRICS countries, intended to meet our infrastructural needs that are enormous and amount to nearly 4 500 billion dollars for the next five years, but also as a stepping stone for cooperation with other emerging markets and future developing countries ».
Donald Kaberuka, President of the African Development Bank (AfDB), acknowledged this initiative, as such an institution would come as a complement to the existing structures and will boost fund mobilization in favour of development projects : « I earnestly believe that this is the time to set up this bank ». However, he proffered words of advice especially the need to clarify the mandate of this bank.
However, following this official statement, the practical modalities remain to be defined. No agreements have been signed as regards the capital breakdown of the future bank. Would the BRICS countries pay the same amount, or would it be according to a variable but proportional quota? These countries are neither at the same economic level nor have they the same means.
We are confident that the BRICS countries will find the right solutions, and as such provide a new head stone to development construction.