Botswana Vice-President Mokgweetsi Masisi has called on Development Finance Institutions (DFIs) to redefine their objectives, warning their relevance as development facilitators was threatened by evolving shifts in demographic, societal needs, economic and market conditions.

Officially opening the CEO Forum of the World Federation of Development Finance Institutions (WFDFI) in Gaborone on Monday, Masisi said political, legal and regulatory regimes also posed a threat to the relevance of DFIs, despite the major role they played in development facilitation.

“Notwithstanding the important role played by DFIs, there has been debate regarding their relevance. There is evidence that DFIs have an important role to play in the development of our economies. DFIs are now generally expected to address broader developmental policy objectives, including employment creation, income distribution, import substitution and developing new industrial sectors or boosting weak ones.

“Based on the above, the role of DFIs in developing countries have gone beyond addressing market failures to, more broadly, addressing developmental failures. This challenges you (DFIs) to reconsider your countries’ financial systems and regulatory regimes and complying with international best practice in corporate governance and risk management. As part of your strategy, you need to balance conflicting responsibilities of remaining financially sustainable while fulfilling your policy mandate,” Masisi said.

He noted that by their very nature DFIs were vulnerable to challenges in the global economy, hence the need to adapt to new systems and technologies. The participants were drawn from WFDFI member associations in over 100 countries, CEOs, government officials, representatives from Central Banks, private financial institutions, as well as several regional ministers of Trade and Finance.