SADC approves P10bn development fund

Pauline Dikuelo | Friday July 25, 2014 14:39

The ministers who met at a two-day trade, finance and investment meeting held in Gaborone last week urged commitment towards operationalisation of the Regional Development Fund.

SADC member states are expected to provide 51 percent of the funding, with $444 million coming from the private sector and $144 million from international partners. According to a statement released after the meeting, the Fund is currently capitalised to the tune of $240 million being the 20 percent of the subscribed share capital over a five-year period in accordance with the proposed allocations. The communiqué states that the ministers of finance affirmed commitment to operationalise the establishment of the Fund and requests further investigations by the secretariat to address modalities for capitalisation and shareholding in the fund.

The Ministers reviewed the progress made in the implementation of the Project Preparation Development Facility, which is expected to pave way for the operationalisation of the Regional Development Fund.

The project facility, which is now operating, is currently capitalised to the tune of P196 million to support preparation of infrastructure projects in energy, water, transport, ICT and tourism development to bankability. The purpose of this facility is to prepare regional infrastructure projects to bankability stage and a component of the infrastructure window of the fund.

Other issues pertaining to the regional economic integration discussed at the meeting included the agreement to revise the inflation target from the fixed target of three percent to a range of three to seven percent. They also agreed to maintain the current targets to the fiscal deficit in public debt at three percent of Gross Domestic Product (GDP) and public debt at 60% of the GDP. The minsters also considered a draft revised regional indicative strategic plan setting out achievements and challenges encountered as well as revised priorities for the region 2015 to 2020 particularly focusing on industrial development and market integration.

The meeting, which was attended by ministers and central bank governors from all SADC countries reviewed progress in various aspects of the SADC Regional Economic Integration agenda and proposals for moving it forward.