The newly-launched New Development Bank, an initiative of BRICS (Brazil, Russia, India, China and South Africa), will initially provide loans to the value of US$50 billion, reports from Johannesburg said this week.
This amount highlights the potential the institution will offer to discover new sources of economic growth for the various nations, Charles Brewer, MD of DHL Express sub-Saharan Africa, said in a statement.
Brewer said the formation of the bank was a significant milestone in fostering trade between South Africa and other BRIC (Brazil, Russia, India and China) economies.
The formation of the New Development Bank was announced this week at the 6th BRICS summit that took place in Fortaleza, Brazil.
Furthermore, Brewer said the establishment of this institution would assist in removing key economic stumbling blocks for South Africa’s economic growth and further position the country as a gateway into Africa.
The US$100 billion bank’s headquarters will be based in Shanghai, with an African office in Johannesburg, South Africa. The bank is set to start lending in 2016, and open up afterwards for membership to other countries.
“This could bode very well for other African countries and the development of infrastructure within these regions where there is a huge need for this investment,” Brewer pointed out.
“Within the business of logistics, we often witness how the quality of infrastructure in a country can positively or negatively impact economic performance,” he said.
Photo: Leaders of BRICS in Fortaleza, Brazil this week. Credit: Reuters
“For instance, in many African countries, infrastructure is a major constraint on doing business. With underdeveloped road and rail networks, and some cities only being serviced by one flight per week,”