Johnathan Paoli
THE National Development Bank (NDB) and its increasing role in future development projects was one of the main discussion points at the 15th BRICS Summit held in Sandton, Johannesburg this week.
This stands in line with the remarkable growth of the BRICS member states economies and the increasing recognition of the multi-polar change this represents against the uni-polarity of the west.
In remarks made throughout the summit, and specifically at the media briefing on outcomes on Thursday, the leaders acknowledged and continually referenced the need for the Global South to establish and take its place among the rest of the world, ushering in a new alternative to the constraints of the present.
Russian President, Vladimir Putin, said the need for mutual currencies settlement and united currencies remains fundamental, and although acknowledging the obstacles, he was confident that the members would reach resolutions.
Putin outlined the need to ensure that settlements between BRICS member states should especially be in economic terms.
Brazilian President Luiz Inacio Lula da Silva praised the increasing growth of Brics member states, saying the collective gross domestic product (GDP) make up 37% of the global GDP purchasing power and 46% in terms of world population.
Earlier this year, in June, Indian Prime Minister, Narendra Modi, and the President of the UAE, Sheikh Mohamed bin Zayed Al Nahyan, signed a Memorandum of Understanding concerning oil trade in national currencies, with a month later seeing the first transaction of one million barrels, between the Abu Dhabi National Oil Company and the Indian Oil Corporation Limited.
Furthermore, earlier this month the NDB closed the auction for its first rand-denominated bonds, increasing its presence on the local capital markets.
The first South African bond auction, raised R1.5-billion, consisting of a R1-billion five-year note and a R500-million three-year note, whose proceeds will be used to fund future infrastructure and sustainable development projects in the country.
The NDB’s loan disbursements in the country make up more than 18% of its total approved loans of R617 billion.
The bank said that a planned loan facility of R18.65 billion to state-owned transport group Transnet was in the works to be finalized before the end of 2023.
NDB Vice-President and Chief Operating Officer, Vladimir Kazbekov, said the loan would be used for the modernisation of the state-owned entity and would require a South African government guarantee for the entire loan amount.
This remains concerning considering Transnet is facing enormous financial problems and defaulting on debt repayments could be a stark possibility in the future.
Further NDB plans involve a loan agreement with the Development Bank of Southern Africa, for the development of Telkom’s telecommunications infrastructure and network, as well as South Africa’s state-owned Trans-Caledon Tunnel Authority’s R3.2 billion loan agreement for the implementation of Phase Two of the Lesotho Highlands Water Project in Lesotho.
Since its inception in 2015, the NDB has played a significant role in developing countries, even to states who are not officially members.
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