Johannesburg - An initiative by Brics countries to establish a bank to aid infrastructure development was welcomed by portfolio committee on international relations chairperson Siphosezwe Masango on Wednesday.
Brics countries - Brazil, Russia, India, China and South Africa - have agreed to start a New Development Bank, which is expected to be operational in 2016, the department of international relations said in a statement.
Masango said Parliament was excited about the initiative, and its potential to improve infrastructure in Africa.
"The establishment of the bank will lessen the impact of the obstructionist conditionalities attached to loans from the International Monetary Fund and the World Bank."
The bank would help fund infrastructure projects in developing countries.
Masango said that the objectives of the Presidential Infrastructure Co-ordinating Commission would be furthered by the bank.
"Infrastructure projects in such varied sectors as energy, rail, road and harbours will no longer be hampered and held back due to a shortage of funding."
This would help trade and connectivity between African countries and create employment opportunities through infrastructure projects.
Logistics
The formation of a new bank by Brics countries to aid infrastructure development bodes well for business, logistics company DHL said on Wednesday.
"The fact that leaders of the Brics countries have recognised these issues and are driving the decision, can only bode well for future business development and success in these nations," DHL Express managing director in sub Saharan Africa Charles Brewer said in a statement.
He said infrastructure development was key to South Africa's economic growth as it assisted in connecting regions, which would subsequently increase the economic activity within the country.
He said in the logistics business, the quality of infrastructure in a country could positively or negatively impact its economic performance.
Justification
The Brics group met Wednesday with South American
presidents as they justified the creation of a development bank seen as
an alternative to Western-dominated global financial organizations.
The leaders of Brazil, Russia, India, China and South Africa held closed-door talks in Brasilia with counterparts from Argentina, Chile, Colombia, Ecuador, Venezuela and other Latin American nations.
The
gathering follows the Brics-only summit Monday in the seaside city of
Fortaleza, where the five nations agreed to create the $50bn bank
for infrastructure projects and a $100bn crisis reserve fund
described as a "mini-IMF."