Picture: New Development Bank
By Mikatekiso Kubayi
The NDB’s annual meeting will be held in Cape Town from August 29 to 31, 2024. It will be the 9th such annual meeting since its launch in 2014 and its resumption of operations in 2016, clearly indicating the relative youth of the bank.
This year’s theme, “Investing in a Sustainable Future”, is in keeping with the global mood and discourse on economic and environmental sustainability in a time of urgent need for climate action and unsustainable global debt levels, especially those in the Global South, and Africa’s $1.152 trillion according to the African Development Bank (ADB).
The NDB has rightly ascended to its position as a serious actor in the global financial architecture. Its age and origin have promised to inject fresh perspectives on and approaches to global finance and offer a practical expression of the BRICS bloc’s reform and development agenda. Eminent forums such as the G20, BRICS Summit, and indeed the Summit of the Future, all within a few weeks and days of each other, will be focussed very sharply on the Poly Pandemic, particularly financing for the global south to respond to it.
The focus on resource mobilisation for “sustainable projects in emerging markets and developing countries with enhanced effectiveness and excellence” will be a welcomed theme. The G20 India declaration declared a need for over $4 trillion in investment in developing economies to get them up to speed on development. According to the African Development Bank, Africa alone needs more than $200 billion in annual investment in infrastructure.
The ADB African Economic Outlook 2024 says of Africa’s needs to achieve socio-economic transformation: “To achieve substantial structural transformation, Africa needs to focus on strategic investments in key Sustainable Development Goal areas such as education, energy, productivity-enhancing technology and innovation, and productive transport infrastructure. The financing gap for these investments is vast, estimated at about US$402 billion annually until 2030, and will require scaling up domestic resource mobilization and fostering private sector investment (ADB African Economic Outlook, 2024).”
The G20 Brazil is already pushing earnestly for reforms of Multilateral Development Banks to unlock much-needed affordable financing for developing economies on friendly terms and in keeping with their sovereign priorities. Africa attracts the least amount of Foreign Direct Investments (FDIs), $45 billion - around 3.5% of global FDI, according to United Nations Trade and Development (UNCTAD)’s World Investment Report 2023.
Africa also loses around $50 billion through commercial crime and tax evasion, according to the UN’s Office on Drugs and Crime. Its roughly $1.2 trillion in debt is a significant figure against its roughly $3 trillion economy. Certainly, Africa and the global south have significant concerns regarding financing and global financial architecture.
The NDB is a bank subject to the rules of its environment, the financial markets, and rating agencies. Unlike its political bloc, BRICS, it does not partake in political movements; its relationship with civil society ought, at the very least, to produce some measure of commentary on the need to concretise a global tax convention, as adopted by the UN on 22 November 2023 and its “blueprint for a new universal tax accord that represents an historic step towards changing the financial landscape”.
The bank can and is undoubtedly playing its part in global financial governance. On its own strategy for expansion of its loan book and reach to areas beyond its current membership, this is an excellent opportunity to harness views and ideas to achieve this. It is particularly significant for the NDB to broaden its footprint on an African continent that, evidently, needs its participation. Africa’s tech and energy spaces need attention; its education and health sectors and other ADB-identified areas for transformation are an opportunity for the NDB to feel its presence.
What is to be done to address the enormity of challenges and conquer Africa’s share of the Poly Pandemic? Indonesia, India, Brazil, and South Africa in 2025 are four respective global south presidencies of the G20 that are pushing for much more significant global solidarity and collaboration to attain reform of global institutions and Governance and improve the global south’s reality and experience of these. Three of these countries are among BRICS’s core five members that founded the NDB. Indonesia may, at some point, join the bloc as well. The G20 is an important global instrument to the BRICS bloc.
Indeed, much is expected of the annual meetings in Cape Town, and the world will pay attention to what innovations and strategies will be developed, especially against the backdrop of current global efforts in finance. The extent to which the NDB can find practical and innovative expression of some G20 resolution in its space for developing economies will be eagerly anticipated. Also eagerly anticipated must be some solutions or proposals to improve the extent to which its regional centres, such as Africa, South America, and Eurasia speed up the rollout of projects.
* Mikatekiso Kubayi is a researcher at the Institute for Global Dialogue associated with UNISA and a Research Fellow at the Institute for Pan-African Thought and Conversation.
** The views expressed do not necessarily reflect the views of IOL or Independent Media.