The World Bank group and the Swiss State Secretariat for Economic Affairs (Seco) on Wednesday signed an agreement for a four-year $4.12-million multidonor trust fund programme to support efforts by the South African government to strengthen its financial regulatory reform agenda, deepen its capital markets and develop an appropriate framework for long-term infrastructure finance in support of the National Development Plan.
The programme would also facilitate access to finance for financially excluded citizens, as well as small, medium-sized and microenterprises (SMMEs), providing a combination of analytical work, policy advice and technical assistance to the country.
Developed in close coordination with the South African National Treasury, the South African Reserve Bank, the Financial Services Board and the Financial Intelligence Center, the programme was fully aligned with National Treasury’s financial regulatory reform agenda and government's priority to enhance financial inclusion.
“Financial sector development and, specifically, financial inclusion, is a government priority. We look forward to this collaboration, which will provide international best practice and take forward our plan to improve the regulatory environment so that the financial sector can better serve the country’s needs.
“This collaboration will also include the private sector, donors, civil society and academia,” commented National Treasury tax and financial sector policy deputy director-general Ismail Momoniat.
Activities supported by the programme would be related to crisis management and resolution; market conduct regulation and supervision; capital markets development and regulation; combating the financing of terrorism; innovative retail payment instruments and delivery channels; SMME finance; debt rehabilitation and insolvency provisions for individuals.
“Switzerland has a strong record of experiences and good practice to share when it comes to a stable and well-developed financial sector. The promotion of innovative products, delivery channels and the further development of access to finance for SMMEs are key areas of Switzerland’s private sector development activities,” noted Switzerland’s ambassador to South Africa Christian Meuwly.
Switzerland would also assist in improving the regulatory framework conditions for financial stability and supervision, as well as in support of the development of capital market and financial infrastructure.
The programme also linked strongly to the World Bank’s goal of achieving universal financial access globally by 2020 and was in line with the group’s Country Partnership Strategy for South Africa, which aimed to support South Africa in reducing inequality and promoting investment.
“Financial sector development matters for growth and poverty reduction and financial inclusion is an important component of promoting entrepreneurship and reducing inequality in access to finance,” added World Bank country director for South Africa Assad Alam.
Seco is part of the Swiss Federal Department of Economic Affairs, Education and Research and supports measures in economic and financial policy, urban infrastructure and utilities, private sector and entrepreneurship, sustainable trade, as well as climate-friendly growth.
The trust fund was the latest in the growing partnership between the World Bank and Seco to support South Africa's development priorities.