Sadc development fund fails to take off

OPERATIONALISATION of the Southern African Development Community (SADC) Regional Development Fund hangs in the balance years after its establishment on account of mounting challenges including lack of funding by member states.

SADC director of finance, Sadwick Mtonakutha, said this during an investment forum organised by the regional institution in collaboration with the Arab Bank for Economic Development in Africa (BADEA) in Harare on Wednesday.

The Regional Development Fund (RDF) was established over a decade ago to create a regional financing mechanism for economic development and to deepen regional economic integration.

The 16-member bloc comprises countries such as Zimbabwe, South Africa, Eswatini, Lesotho, Zambia, Botswana, Malawi, Tanzania, the Democratic Republic of Congo, Namibia, Angola, Seychelles and Mauritius.

“The RDF is a treaty-based institution and the purpose is to create a regional financing mechanism for economic development and sustainable growth in SADC and the objective is to mobilise resources for member states, development partners, private sector to support regional development and to deepen regional development.

“At a strategic level, SADC has developed a resource mobilisation framework whereby stakeholders have scaled up how we can mobilise resources in order to finance it.

“Now that is a long time ago — in March 1998, SADC Ministers of Finance considered an outcome of the work that was undertaken which recommended in terms of operationalisation of the fund, to first of all come up with a sub-regional resource centre that we are calling the Development Finance Resource Centre that is based in Gaborone,” he said.

“And lastly, it was the operationalisation of the fund itself. Again, the Ministers of Finance around 2004, set down and said is it the financing or the unavailability of the projects that need financing?

“We can talk about the limited knowledge, the delay in the ratification, but we have member states, as you are aware, capitalisation is the issue we are discussing with the banks to finance the RDF.”

In this context, Mtonakutha said SADC was courting regional financiers such as the African Development Bank and BADEA to provide lines of credit to the RDF in support of various projects across member states. The region is implementing projects in sectors that include energy, transport, infrastructural development and water and sanitation, among others.

Meanwhile, SADC and BADEA have signed a Memorandum of Understanding to strengthen co-operation between the two institutions and mobilise resources for regional integration.

The MoU was signed in Harare on Wednesday by the SADC executive secretary, Elias Makgosi and BADEA president Dr Sidi Ould Tah during the institutions’ investment forum.

Officially opening the SADC/BADEA Investment Forum before the MoU was signed, guest of honour SADC Council of Ministers chairperson, Dr Frederick Shava said: “We are delighted with this opportunity to strengthen and deepen our cooperation towards supporting the implementation of the regional integration programme — this milestone of our historic Memorandum of Understanding is indeed instrumental in transforming our cooperation and indeed our partnership.

“Our MoUs commit both the SADC and BADEA to promote cooperation in energy, water, health, trade, agriculture and investment, to mention but a few. These are key developmental issues in the SADC’s development agenda and we want to pay specific attention to them.

“The MoU further commits both parties to jointly facilitate the forums or seminars or exhibitions that involve parties including the private sector, this is the basis for this prestigious SADC-BADEA Investment Forum that we are holding this morning here in Harare.”

He said it was important to note that the investment forum has come hard on the heels of the successful 7th SADC Industrialisation Week, which was held in Harare under the theme, “Promoting Innovation to Unlock Opportunities for Sustainable Economic Growth and Development: Towards an Industrialised SADC”.

This ties in very well with the aspirations of SADC and prioritising economic growth and industrialisation, thus promoting investment.

“At this particular juncture, I want to recognise our esteemed partner BADEA who are a vital cog in achieving this goal.

“SADC is delighted with this opportunity to strengthen and deepen our cooperation towards supporting the implementation of the regional integration programme.

“We are gathered here at this forum to exchange information and ideas on how best we can enhance cooperation and collaboration in the context of supporting regional integration,” he said.

Dr Shava said the region’s regional integration agenda is guided by Vision 2050 and the Regional Integrative Strategic Development Plan of 2020-2030, which prioritises development initiatives on peace and security, industrialisation and infrastructure development, social and human development and cross-cutting issues that include gender, climate change among others.

“As you will note from our detailed presentation on infrastructure projects, the SADC region has a huge need for financing and investment towards infrastructure development, particularly through our cooperation on infrastructure.

“They are also aimed at creating a more sustainable investment in Africa and in African countries with facilities to support small and medium-sized enterprises.”

He said the role of the private sector in the implementation of the regional integration agenda is prioritised in the Regional Integrative Strategic Development Plan and cannot be overemphasised.

Dr Shava called upon potential investments to make the SADC region their investment destination of choice, adding that job creation provides the necessary avenue for socio-economic development and enhance the livelihood of people in the region.

“To some extent, financing remains a primary challenge for our SME sector, and we are hopeful that BADEA and its financial partners will find solutions to offer which will stimulate the growth and sustainability of our small and medium enterprises.”

In his remarks, BADEA president Dr Sidi Ould Tah said his institution has resolved to support SADC and Africa’s socio-economic development agenda in SADC and Africa at large and thus US$8 billion has this year been committed for the cause, particularly looking at projects in sectors such as energy, transport, and infrastructure development.

“While we are proud of the projects we have been able to do together in rural development, electricity generation and transmission, education, health, and research and development — this is the essence of the investment forum, to explore the potential of our share market,” he said.-ebsnessweekl