BRICS Development Bank expected to grow in Africa

JOHANNESBURG - If a BRICS Development Bank is based in South Africa, it will "definitely improve growth" in African countries, a senior South Africa economic and business expert told Xinhua on Tuesday.

In an interview with Xinhua, Dr Oren Dayan of School of Economic and Business Sciences at Wits University said establishing and managing the BRICS bank will be a "long and difficult task."

He said there are a lot of decisions that still needs to be made like the currency to be used by the bank and the risk assessment policy.

"But putting these decisions aside, I think that such an important source will definitely improve growth of African countries.

"I believe that South Africa will try to create a momentum and push for a regional development that will benefit the other African countries. After all, Africa is presenting an impressive growth rate," Dayan said.

BRICS is acronym for the powerful grouping of the world's leading emerging market economies, namely Brazil, Russia, India, China and South Africa.

Recently South Africa Department of International Relations and Cooperation (DIRCO) Director-General Jerry Matjila said the decision has been made for the bank to be based in South Africa.  

He said the decision is only waiting to be officially announced at the fifth BRICS summit that will be held on March 26-27 at the Durban International Convention Center in South Africa.

Dayan said the bank is crucial for Africa development. It will help improve infrastructure development, financial stability and maybe most important, job creation, he added.

"Job creation is a by-product of any development project so this function will be fulfilled by the bank."

Dayan said for the bank to successfully meet its infrastructure development goal in Africa it must be supported by well informed and equipped private sector. He urged BRICS, especially South Africa, to ensure that Africa business is educated to understand the mechanism of the projects involved.

"The main key issue here is to educate businesses to meet the requirements of such large scale projects," Dayan told Xinhua.

"Businesses should have a feasibility study, a proper management team with a proved records of success in previous projects, and mainly a good motivation of why and the project will benefit Africa and the other BRICS countries," he said.

Dayan also urged African governments to ensure political stability and make their countries investor friendly in order to fully benefit from the bank.

"No investments will be made in countries that have a high political and liquidity risks. Reduce uncertainty will be the main focus of governments that will seek investors," he said, advising African governments to be more transparency in terms of political moves and financial structures.

Giving South Africa a chance to host the BRICS bank is a great opportunity for Pretoria to show the world and to justify the trust it get from other BRICS countries.