The Committee of Ministers of Finance and Investment of the Southern African Development Community (SADC) at its meeting held in August 2024 in the Republic of Angola, approved that Senior Treasury Officials and Experts from Member States meet in a dedicated workshop during first week of November 2024 to discuss in detail the Discussion Paper on the operationalisation of the SADC Regional Development Fund (RDF).
Following their dedicated workshop held on 8-9 November 2024 in Harare, Zimbabwe, Senior Treasury Officials and Experts from Member States recommended for an Extra-ordinary meeting of the Ministers of Finance and Investment to be convened. The meeting was hosted virtually by the Republic of Zimbabwe on the 12th of December 2024 to consider the recommendations from the workshop.
The meeting was preceded by the meeting of the Senior Treasury Officials which was convened on the 11th of December 2024.
In his opening remarks, Honourable Prof. Mthuli Ncube, Minister of Finance, Economic Development and Investment Promotion of the Republic of Zimbabwe and Chairperson of the Committee of Ministers of Finance, stated that the Senior Officials considered the detailed presentation from the African Development Bank (AfDB) on the revised RDF Discussion Paper. In this regard, they reported that the different options and recommendations set out in the Revised Discussion Paper are in line with the 2016 Agreement on the Operationalisation of the SADC RDF.
The SADC Executive Secretary, His Excellency Mr. Elias Magosi, informed the meeting that the SADC Treaty provides that a special SADC Regional Development Fund (RDF) be established with the purpose to create a Regional Financing Mechanism for Economic Development and Sustainable Growth.
His Excellency Mr. Elias Magosi recognized the fiscal pressures as the main impediment on Member States to meet their capitalisation contributions towards the RDF. The Executive Secretary underscored that the Ministers should consider the Discussion Paper on the Operationalisation of the Fund for it offers varied mechanisms for Member States to expedite both membership and capitalisation of the Fund. One mechanism is for Member States to access concessional funding from the African Development Fund (ADF), a concessional window of the AfDB, allowing ADF countries or low-income countries to access resources on concessional terms, which may be used to invest in the RDF. Mr. Magosi asserted that Success Stories on ADF utilisation to close financial gaps are well documented in Africa, as some countries had utilised the ADF window to fund membership contributions to the African Trade and Investment Development Insurance Agency (ATIDI). For example, in 2015, the ADF provided Unit of Account (UA) 19.87 million to support Benin, Ethiopia, and Côte d'Ivoire in their equity contribution for ATIDI, thereby enhancing insurance coverage for private sector development across Africa. In 2018, Nigeria also received ADF support of UA 10.21 million to invest in ATIDI.
He conveyed SADC heartfelt gratitude to the African Development Bank (AfDB) for sharing SADC vision, taking a bold and progressive step and partnering with SADC in its endeavours to fast-track the operationalisation of the SADC Regional Development Fund. He also underlined that with this level of commitment, SADC cannot afford to fail to deliver on this important assignment, and indeed make the RDF operational and start using it without delay. While the Bank has committed resources and support, Member States must do their part to ensure the exercise is successfully concluded.
The meeting considered the recommendations presented in the Discussion Paper for endorsement by Council and Summit, in particular the recommended structure for the establishment of the SADC Regional Development Fund by means of a standalone Special Purpose Vehicle (SPV) with a Permanent Capital Structure. Operationalisation of the SADC Regional Development Fund in a staged approach, starting with the Proof-of-Concept Stage; and reaffirmed their Decision of August 2024 urging Member States that have not signed and/or ratified the Agreement on the operationalisation of the SADC Regional Development Fund to expeditiously do so.
