The New Development Bank formed by the members of the BRICS in July 2014 seek to put the interest of Africa at its forefront, a continent starved of much needed infrastructure.
Despite the cracks in continent, Africa is making large strides in certain issues in comparison to the last decade or so. Is it time to get excited? Well yes, but a lot of work needs to be done if we’re to continue to remain hopeful.
Africa needs help and simply offering pain relief in the form of Aid does not address the underlying issues which plague the continent but instead creates societies that become dependent on Aid.
New Development Bank?
The introduction of the New Development Bank (NDB) signalled a pivotal moment in who to approach, in regards to how projects are financed. The establishment of the World Bank and the IMF in 1945 following the Second World War brought about a new way to access loans for countries that were in need of rebuilding.
However, the emergence of the BRICS added a twist in demonstrating how economies like China can outperform economic powerhouses like the USA. Calls to reform the World Bank voting power system were highlighted, to enable countries like China a greater say in global economic decisions. Unfortunately other members of the institution did not endorse this wholeheartedly.
Fears of bias in favour of the West, who have a larger voice in World Bank and IMF has been a long serving debate, and so the introduction of the NDB set up by the BRICS could create a fairer environment in dealing with Africa’s needs.
Africa requires about $93bn a year for the next decade according to a World Bank Report if it stands any chance in closing the infrastructure gap between other continents and sustaining strong levels of growth for years to come. The NDB however does not have such capacity to offer these demands, but at the very least provides the continent with greater choice for financing projects.
It is the responsibility of the BRICS nations to remain focussed in creating a bank that seeks to contribute to the development of Africa. It will be an absolute failure if this primary objective is not given the attention it rightfully needs.
An initial fund of $100bn for financing projects has been set up by the BRICS, with the headquarters at Shanghai, China, whilst the African Headquarters is located in South Africa.
Could they offer Africa a fairer voice and cheaper finance that the continent have longed cried for?
And if so, is there a danger that offering cheaper long term finance to Africa could overlook the real concerns such as risk?
Answers to these questions will really be put to the test from 2016, when the first scheduled finance offering is set to commence. It is imperative that African nations take responsibility in ensuring that subject matters such as governance are faced head on in the meantime.
For the foreseeable future Africa is