Photo by: Reuters
As part of its commitment to the Brazil, Russia, India, China and South Africa (Brics) grouping’s New Development Bank (NDB), the National Treasury will allocate R2-billion as South Africa’s initial capital contribution to the bank.
To finance the allocation, the National Treasury had to make a special appropriation that was not provided for in the main Budget delivered by Finance Minister Nhlanhla Nene in February.
As such, government sold its R25.4-billion of shares in telecommunications company Vodacom. The remaining R23-billion had gone toward recapitalising Eskom.
The bank, which was yet to open, would provide financial support to the Brics grouping, particularly for infrastructure and sustainable development.
It would be headquartered in Shanghai, China, and would have its first regional office in Johannesburg. Former South African Reserve Bank governor Tito Mboweni has been appointed a nonexecutive director of the bank.
When the NDB was established, it was determined that the Brics countries would initially be the only members, each with a shareholding of $10-billion and equal voting power.