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Tell us what do you think with this new BRICS bank will be it a step forward or backward for Africa..?

IF YES" or" NO""......share with us your know how..!
 

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Discussion Starter · #2 ·
In case you didn't know about it,this the story....



The Brics bank is a glimpse of the future

If the postwar order is being upended, the right response is ‘hear, hear’



High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. http://www.ft.com/cms/s/0/f7b876a0-170e-11e4-b0d7-00144feabdc0.html#ixzz394qjI63N

Thirteen years ago, Brics was a marketing ploy dreamt up by Jim O’Neill, then chief economist at Goldman Sachs. Now it is a bank. Next thing you know, it will have its own line of designer handbags.

This month in Fortaleza, the five Brics nations – Brazil, Russia, India, China and South Africa – agreed to establish a development bank. They also set up a $100bn swap line, known formally as a contingent reserve arrangement, a deal that gives each country’s central bank access to emergency supplies of foreign currency. To borrow a phrase from Anton Siluanov, Russia’s finance minister, the five countries are attempting to conjure a mini-World Bank and a mini-International Monetary Fund.

The Brics’ plan is good for the world, although you would not know it from the sniffy reaction in the west. There have been two default positions. One is to scoff at the very idea of five such disparate nations organising anything coherent or staying the course. The other is to worry that the world order reflected in the two US-led institutions set up at the Bretton Woods conference of 1944 is about to crumble.

It is indeed a minor miracle that five countries whose initials happen to form a catchy acronym have so quickly gone from Brics to a bricks-and-mortar bank. This is a reprimand to western-led institutions that have failed to adapt. If the postwar order really is being upended, the right response is “hear, hear.”

The new Brics bank, which will fund infrastructure projects, will have initial capital of $50bn and maximum allowable capital of $100bn. Each country will pay in $10bn, giving them a theoretically equal say. The bank will be based in Shanghai, a sop to Beijing, which clearly intends to wield influence. Yet the presidency will be rotated, starting with India. China will not have a turn until 2021.

By contrast, the five countries will contribute to the CRA swap line according to size, with China pitching in $41bn to South Africa’s $5bn. The contingent reserve is a safety net for times of financial stress, for example if one country’s currency comes under speculative attack. It is modelled on the Chiang Mai Initiative, a $240bn Asian currency swap arrangement concluded after the 1997 Asian crisis when the region’s proposal to launch its own IMF equivalent was squashed by Washington.

The Brics bank, too, was born of frustration. The IMF in particular is disliked in much of the developing world. In the 1990s, its rigid adherence to market reforms led many to see it as an instrument to keep poor countries down, not to lift them out of poverty. In Asia, it is regarded as hypocritical. In 1997, it insisted on ruinous austerity in countries such as Indonesia. Following the 2008 financial crisis it has happily embraced monetary and fiscal laxity in the west.

source:- http://www.google.com/url?sa=t&rct=...vILy4Jo6b8pu8Yw&bvm=bv.72185853,d.cWc&cad=rja
 

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Mutu ya Chuma.
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Many Africans are shameless and this mentality will never make Africa developed.

What is with this HELP AFRICA?

Obama hasn't helped Africa,
Bush did so helped Africa so much,
Lula of Brazil helped Africa so much,
etc....

Africa is there as beggar , lazy, very opoor who has be helped by presidents of other countries?

Damn shame. that is not a mentality of someone who can or wants development.
 

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Many Africans are shameless and this mentality will never make Africa developed.

What is with this HELP AFRICA?

Obama hasn't helped Africa,
Bush did so helped Africa so much,
Lula of Brazil helped Africa so much,
etc....

Africa is there as beggar , lazy, very opoor who has be helped by presidents of other countries?

Damn shame. that is not a mentality of someone who can or wants development.
I am with you 100% on this one
 

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the only way africa and the world at large will benefit is by having more choices and competitive rates. they wont have to put up with bretton woods institution exorbitant expectation and eventually backing off the deals everytime.
kenya has had MANY projects that world bank was to finance. they come, give their endless requirements, lectures etc. kenya would do all that and then the world bank would back out at the last minute leaving the country with no choice but to go east or to go to africa development bank. imf and world bank are just a waste of time.
 

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yeah, butembo is right, this is just hot air especially when it comes to african interests. This is a bank, nothing more nothing less. It's not the first bank ever, it's not the last, and like any bank we should be thinking of how it will advantage us, not how it'll disadvantage the IMF.


I think they will be bullish on loans to begin with as they'll be eager to get their feet in the water.



BTW. If african countries were really trying to get into some cheap money they should buy US lobbies. It's really that easy, the US is up for sale and we're here talking about IMF
 

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Mutu ya Chuma.
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Africans don't even need these banks...for one i know DRC does not.

we have resources that would generate the money or xhanged in place of money needed for special projects.


Look at the African MPs-Senators and the money used to pay many iother useless gov entities and the money stollen kept in overseas accounts etc..

Its in sane when you think about.
 

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Oh no Butembo we do need anyone with some loose cash, infrastructure will not be developed on anything else.
 

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Mutu ya Chuma.
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Oh no Butembo we do need anyone with some loose cash, infrastructure will not be developed on anything else.
Some countries really don't need them. countries such as DRC, Nigeria, Cameroun, Ghana etc...

Look at what Angola has been doing with resources to build the country's infras, from Rail to National roads to rebuilding of cities that were war damage to new cities built from scratch to 4g network countrywide etc...

A few countries need it. but it should not be towards serious leaderships, not huge stomachs of useless politicians.
 

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Right now there is an abundance of money worldwide. Banks are flush on dollars which are depressing interest rates for firms, and all reasonable managed countries can borrow at very low rates.

There isn't a lack of money right now, what is lacking are credible projects for investment and a trusted financial and legal system that provides the institutional reliability banks need to lend money.
 

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The brics bank can help in tranfer of tech.. I doubt it would be beneficial longterm to ask for money! There is an opportunity for real infrastructure revolution
Nobody is going to transfer know how. Are Chinese companies transfering know how to Africa? No..

The BRICS are not dumb to transfer know how to Africa. A stronger Africa will become a threat for China, India etc
 

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Like someone said, there is enough money on the African banks to finance so many projects and to stay independent from foreign banks. The problem is that many African banks don't profide much credit to the private sector..

African bank assets are growing as never seen before..Africa doesn't need BRICS, IMF, but more local credit..


Over the last five years, the assets of Africa’s top 200 banks have grown by 34%, with deposits also up 34% and loan books increasing 40%. This sustained growth now has sub-Saharan Africa’s banking sector closing in on other emerging regions, with return on assets outstripping places like Eastern Europe.

The success of the sector is now increasingly spread across the continent, too. The Kenyan banking sector has been growing at 8.5% a year since the turn of the century. In Angola, around 200 bank branches have opened every year since 2009, and not just in the capital, Luanda, but also across the country’s provinces. In fact, right across sub-Saharan Africa, from Ghana to Tanzania and Mozambique, the sector has grown steadily. And anyone working on the continent will be well aware of the raft of international banks now here and still entering, hoping to be part of this enormous opportunity.

But as Africa’s banking sector continues to become institutionally strong and structured, we must make sure we do not become inflexible to support our hugely dynamic and changing consumer. The banking sector must reach out and support young entrepreneurs and our fast increasing middle class, including many of our small and medium sized enterprises (SMEs).

Last year’s landmark Accelerating Entrepreneurship in Africa study from the Omidyar Network is a catalogue of the barriers facing entrepreneurs on the continent today. Unsurprisingly, access to capital was among the top list of most-cited problems, with Afro-entrepreneurs bemoaning the lack of forthcoming financers, and the report pointing to the deeply concerning estimate from the International Finance Corporation that around 84% of SMEs in Africa are either unserved or underserved by credit, leaving a staggering value gap in credit financing of some US$140bn-$170bn.

Sadly, though, this is not a surprise, as we know nine in 10 new ventures in Africa fail in the first five years, and banks are not in the business of giving away money. Neither has the sector to date been under any meaningful pressure or otherwise incentivised to help bridge this financing gap. But to refuse our entrepreneurs and small businesses credit lines is to cut off one of our greatest potential assets before it has even begun.

For Africa, support for entrepreneurs to get started and for SMEs to expand is especially critical, given the enormous jobs challenge the continent is facing in the coming years. They offer a potential lifeline for the 10m-12m more young people now coming onto the labour market every year. It is no longer an option for banks to turn a blind eye, or equally, to give finance at cripplingly high interest rates (many of which are 20% plus) or under harsh repayment conditions. Entrepreneurs in Africa today, trying to start or grow their businesses, are too often cut out of the formal financial systems and structures that can effectively support them.

Unless we better support these dynamic wealth creators, the SME and startup market will never be able to achieve what Africa needs it to. While SME and entrepreneurial activities are increasing in Africa, as the National Bureau of Economic Research has suggested, it’s currently not often outside of the formal system, and “contrary to the romantic view, there is no evidence that these African young unregistered firms are dynamic engines of employment creation”.

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http://www.alvaro-sobrinho.com/2014...d-to-be-on-the-side-of-our-dynamic-consumers/
 
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