Maputo: The African Development Bank (AfDB) wants SADC countries to put five percent of their monetary reserve towards the establishment of an infrastructure bond that would help speed up infrastructure development in rail, water, ports and energy.
The bank’s head Donald Kaberuka made the proposal at the start of the SADC Heads of State Summit in Maputo on Friday.
“I understand the need for security, but the proposal we are putting to you is that instead of investing this money in other instruments, let us take a small amount of it and invest it in what we can call Africa infrastructure bond,” Kaberuka said.
It was not clear whether the proposal will receive the needed support from the Heads of State present at meeting but it’s understood, it will be discussed. Infrastructure development in the form of a mooted master plan will feature prominently in the discussions during the two-day summit. Malawi and South Africa were among the first countries to endorse the plan that seeks to address infrastructure deficit in rail, water and energy infrastructure.
Kaberuka told the gathering that Africa’s total reserves amounted to $497billion and much of these reserves were invested in external markets and secure instruments of developed countries. He said the five percent investment on the infrastructure bond would generate about $22 billion. “The time has come for us to look at our own internal capabilities and mobilise our own resources. That is a good investment for our countries, instead of having our own investments developing other countries, our resources will be used to develop Africa’s own infrastructure and a good return for our own central banks”.
African governments have for far too long depended on aid and development corporations to expand infrastructure.
He said over the last five years, more than $45 billion had gone into Africa’s infrastructure but said the figure was “a drop in the ocean” given the needs of the continent. “I understand that there are technical questions that need to be addressed but those we can overcome”.
Kaberuka said in the next 12 months, the SADC region will see a sustained growth rate of five per cent but that to maintain that growth regional leaders needed to invest heavily in an infrastructure and human capital. The bank projects South Africa may probably record a 3.5 percent growth rate next year. He warned, however that there was a need for greater vigilance of external uncertainties such as oil and food price volatilities.
“We need to be on the lookout for these external forces. The crisis in not over, the world biggest markets are still going through a difficult time.”
Meanwhile, South African President Jacob Zuma has cut short his attendance of the 32nd SADC Summit in Maputo, Mozambique, in order to visit Rustenburg this afternoon.
A dispute at the Lonmin Marikana mine in Rustenburg has claimed several lives since last week, culminating in the tragic shooting of armed protesting strikers yesterday.
“The President asked the new SADC chairperson President Guebuza of Mozambique and his colleagues the SADC Heads of State and Government to release him so that he can go and attend to the matters at home,” the Presidency said in a statement.
The President is concerned about the violent nature of the protest, especially given that the Constitution and labour laws allow enough avenues to deal with issues, and is sympathetic to calls for a commission of inquiry.