The Southern African Development Cooperation (Sadc) has had to revisit the founding treaty to develop a mechanism for initial funding for its ambitious Regional Infrastructure Development Master Plan (RIDMP) estimated at US$500 billion in the wake cold shoulders from western nations and multilateral finance institutions.
“Nobody has come forward to fund any of the projects we have outlined. I have been to Japan, USA and UK among other countries,” SADC Deputy Executive Secretary for Regional Integration Joao Samuel Cahol said.
“What is holding us as SADC is our inability to fund our own priorities and programmes. Therefore sustainable funding mechanism had to be established if we are to show that we are committed and progressing.
RIDMP among other things aims to deal with the region’s deficit in road, rail, ports, power, communication, water infrastructure and meteorology.
“SADC has the potential and we are asking for the goodwill of all member states. Let them put the seed money,” said the outgoing Executive Secretary.
Modelled on the European Investment Bank and other regional funding ventures, SADC countries will initially pump US$1.2 billion into the SADC fund and of this 51 percent will be contributions from member states, 37 percent private sector and 12 percent by international partners.
SADC contributions will be done over a five-year period starting 2013 based on the country’s affordability, institutional capacity and other criteria, which the outgoing Executive Secretary was reluctant to divulge.
“If after five years a country fails to pay its contribution its shares will be recalled and distributed among the complying states so that the 51 percent shareholding by African states is maintained,” Cahol said.
However, a member state will still be able to access funds for its development projects as espoused in the RIDMP.
Malawi President Joyce Banda is now the new chairman of the 14 member regional block.
She said: “Africa is a continent on the move. But the economic downturn of recent years has highlighted the vulnerability of our economies to external shocks. We need to intensify our efforts towards regional integration in every sense, reminding ourselves that as we strengthen the ties that bind us, we build our resilience against future shocks.”Follow and Subscribe Nyasa TV :