Online Reporter
Wallace Ruzvidzo
Herald Reporter
SADC is working on operationalising the bloc’s Regional Development Fund (RDF) which will see the region benefiting from its financing mechanism towards sustained economic growth and development.
This came out during a meeting between the SADC Committee of Ministers of Finance and Investment, which is chaired by Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube.
In a statement, the SADC Secretariat said the African Development Bank (AfDB) had proffered guidance on how the regional bloc can successfully operationalise the RDF.
The SADC Treaty already provides for the establishment of a special RDF.
“In his opening remarks, Honourable Prof Mthuli Ncube, Minister of Finance, Economic Development and Investment Promotion of the Republic of Zimbabwe and Chairperson of the Committee of Ministers of Finance, stated that the Senior Officials considered the detailed presentation from the African Development Bank (AfDB) on the revised RDF Discussion Paper.
“In this regard, they reported that the different options and recommendations set out in the Revised Discussion Paper are in line with the 2016 Agreement on the Operationalisation of the SADC RDF,” said the Secretariat.
SADC Executive Secretary Mr Elias Magosi said one mechanism proffered by the AfDB was that the regional bloc’s member states be given access to concessional funding.
A concessional window of the AfDB will allow low-income countries to access resources on concessional terms, which may be used to invest in the RDF.
“The SADC Executive Secretary, His Excellency Mr Elias Magosi, informed the meeting that the SADC Treaty provides that a special SADC Regional Development Fund (RDF) be established to create a Regional Financing Mechanism for Economic Development and Sustainable Growth.
“His Excellency Mr Elias Magosi recognised the fiscal pressures as the main impediment on Member States to meet their capitalisation contributions towards the RDF.
“The Executive Secretary underscored that the Ministers should consider the Discussion Paper on the Operationalisation of the Fund for it offers varied mechanisms for Member States to expedite both membership and capitalisation of the Fund,” said the SADC Secretariat.
Success stories on the African Development Fund (ADF)’s utilisation to close financial gaps are well documented in Africa, as some countries have utilised the window to fund membership contributions to the African Trade and Investment Development Insurance Agency (ATIDI).
“For example, in 2015, the ADF provided Unit of Account (UA) 19,87 million to support Benin, Ethiopia, and Côte d’Ivoire in their equity contribution for ATIDI, thereby enhancing insurance coverage for private sector development across Africa. In 2018, Nigeria also received ADF support of UA 10.21 million to invest in ATIDI,” said the SADC Secretariat.
Mr Magosi conveyed SADC’s heartfelt gratitude to the AfDB for sharing the bloc’s vision in partnering with its endeavours to fast-track the operationalisation of the RDF.
He also underlined that with this level of commitment, SADC could not afford to fail in making the RDF operational for use without delay.
“While the AfDB has committed resources and support, member states must do their part to ensure the exercise is successfully concluded,” said the SADC Secretariat.
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