RESOURCE MOBILIZATION PROGRAMME FOR DEVELOPMENT FINANCE INSTITUTIONS HELD ON 21-23 JUNE 2016 AT EZULWINI HAPPY VALLEY HOTEL IN SWAZILAND

SADC DFRC Representative

Our main facilitator,

• Senior DFI Executives Present here Today.
• Distinguished visiting and local participants.
• A very Good Morning to you all.

1. It’s  indeed an honour and a privilege  for me to have been invited to be part of  the official opening ceremony for this very important training course in Resource Mobilization for DFIs.  At the outset I would like us to acknowledge that this is one of the most difficult functions for executives of DFIs in the region against the backdrop of diminishing liquidity holding in domestic economies following the emerging concepts of free movement of  capital and labour in the global community.

2. I want to pay a special tribute to the SADC DFRC Secretariat for choosing the Kingdom of  Swaziland to be the host country  for this training course and this point allow me to also extend a warm welcome to all our visiting participants from the other SADC countries.

3. I also wish to commend the local DFIs namely FINCORP, SWAZIBANK and SIDC for taking up the membership  of this very important regional network of SADC Development Finance Institutions  in order to enhance learning and sharing of best practices in development finance and economic development in general. I am aware that a new Development Finance Institution namely National Industrial Development Corporation of Swaziland (NIDCS) has been recently set up in Swaziland and they are part of this workshop. A warm and special welcome to NIDCS to the family of DFIs.

4. Many people may not be aware that SADC DFI Network is actually a subsidiary institution of SADC Economic Block established under the SADC Finance and Investment Protocol (FIP) hence the network is ultimately accountable to the SADC Council of Ministers through the Integrated Committee of  Ministers which feeds to the Heads of  State.

5. The SADC DFI Network currently has 36 member DFIs from all the SADC Countries.

6. Ladies & Gentleman. You will by now be well aware that the Chairmanship of  The SADC Economic Block will be taken over by Swaziland in August 2016 during the 36^th Ordinary SADC Summit of Heads of States and Governments.  Likewise I am made to understand that even the Chairmanship of the SADC Council of Ministers of Finance will be transferred to our own Minister of Finance here in Swaziland to steer forward among other responsibilities, the  development finance movement. We should therefore start now to lead from the front by getting the right skills.

7. Turning to the workshop, we all know that hosting such international training events bring about immense benefits for the host country. I therefore encourage the visitors to take some time to visit the various places of interest in the Kingdom of Swaziland. 

8. There could have been no better time than now for us to have such a training programme for DFIs staff here in Swaziland on  Resource mobilization as I alluded earlier on that this task  is one of the most difficult responsibilities faced by executive management of DFIs.

9. Investors who are agents of surplus capital are increasingly becoming selective and more demanding when it comes to making a choice on where to place their funds. Notwithstanding legislative moves to free up capital for the betterment of our respective economies, capital resources continue to be very scarce and not easily accessible.  Even where capital has been availed, it is provided at very short term periods often against a demand for exponential returns on investment yet development finance by nature demands long dated capital.

10. I suspect that in the entire SADC Region what is happening here in Swaziland may well be taking place in the other countries where some of our course participants come from.

11. Now the big question is what does this mean for us as DFI practitioners ?

12. In my view its simple and straight forward ! We have to completely re-think our resource mobilization strategies.  Furthermore we have to carefully select the investments that we make in order to protect the investment of those who have placed their confidence in our respective institutions. You can call it a balancing act.

13. I am therefore pleased to note that the workshop will cover the following :

1. Enhancement of skills of developing and implementing resource mobilization strategies, processes, sources of funds as well as uses of funds. 

2. The training will teach fundamentals of projects, managing risk, investments, due diligence and structuring and packaging. 

3. By the end of the course it also is expected that participants shall have practical skills to help build the fundraising capacity of their respective organizations.

4. Participants will have a clear understanding of resource mobilization strategies, best practice and processes.

5. Gain knowledge and how to access global network of fellow fundraising professionals from around the world.

14.  You will be exposed to Lectures/ presentations, Case Studies, Group Discussions, and Presentations led by a Team of experienced and highly knowledgeable professionals with practical experience of resource mobilization as identified by the SADC Development Resource Centre.

15. In broad terms, resource mobilization can be defined as the process by which  an organization acquires  and manages the financial, human and other logistical resources needed in order to fulfill its mission. Resource mobilization can be defined  as a management process of identifying economic agents who  share  the  values  of  your  organization  and  take  then take the interest of investing in that company.  Resource mobilization is often incorrectly considered as purely fundraising yet fundraising is a component of the resource mobilization.  It is important to realize that resource mobilization is not an end in itself but means to an end because once the resources have been mobilized, there lies the responsibility of using those resources wisely. I am not an expert in this subject matter so I leave the rest to the workshop facilitators.

16. A few weeks ago the SADC DFI Network convened a CEOs Forum in Botswana – Gaborone, Masa Square, to discuss the implementation of the Sustainable Development Goals commonly referred to as (SDGs).  Individual DFIs were called upon to make their pledges of commitment to the SDGs. A staggering sum of USD $3 Trillion  (E45 Trillion) a year is required by all nations to invest in the attainment of the SDGs for the next 15 years or 800 weeks up to 2030.  The United Nation’s 193 member countries adopted 17 Sustainable Development Goals (SDGs) as a roadmap to end poverty and hunger, fight inequality and conquer climate change over the next 15 years hence the discourse on resource mobilization is very much relevant and important for all of us. The Organisation for Economic Cooperation and Development (OECD) Secretary-General said “private sector participation will be critical going forward while governments need to strengthen resource mobilization efforts in order to encourage investment and ultimately achieve the wide ranging SDGs.”   The Secretary General also opined that without the private sector, SDGs are not going to happen, as there are budgetary constraints if not deficits in most countries.  Whilst we may have a lot of pledges from various sources, they are not enough and a framework to allow the flow of finance to happen seamlessly will be required.

17. Meanwhile the African Development Bank (ADB) through its newly appointed President has articulated its new vision commonly referred to as the High 5s namely Lighting and Powering Africa;  Feeding Africa; Integrating Africa; Industrializing Africa; and finally Improving the standard of living in Africa.  According to ADB Billions of US Dollars will be required to achieve these strategic goals. Not only are these five priority areas central to the ADB, but they also are intrinsically linked to the global SDGs.  Furthermore the ADB High Five priorities have also been highlighted as critical priorities in the Agenda 2063 for Africa, developed in partnership with the African Union.

18. According to the African Development Bank statistics  although the entire continent has experienced consistent growth over the past decade, 120 million Africans remain out of work, 42% of the population in Africa still live below the US $1.00 a day poverty line, and one in four people in Sub Saharan Africa  remain undernourished with no access to clean water and sanitation. Inequality is also very high with 6 of the 10 most poverty stricken and unequal countries in the world being in Africa largely affecting women and the youth. The ADB also suggests that making growth inclusive will require broadening access to economic opportunities for more people, countries and regions, and helping the continent generate the much needed productive jobs, while protecting the vulnerable sections of society.

19. Within SADC our leaders have promulgated the Finance & Investment Protocol (FIP) in line with its motto of “Towards a common future”. The FIP seeks to promote economic growth, macro-economic convergence and integration of markets among other things within the SADC Community.  Annex 9 of the FIP specifically deals with SADC DFIs and all the programmes that we have to undertake in order to make a positive impact in our communities. Key to that is the establishment of  the SADC Regional Development Fund in order to enhance resource mobilization efforts.

20. It is immediately clear therefore based on the above facts that Resource Mobilization will not only be key within the SADC Region but the global village at large comprising of all the 193 member states of the United Nations. 

21. The greatest benefit of attending courses hosted under the auspices of the SADC DFRC is the opportunity for all participants from various countries to share their experiences and enrich one another for the betterment of our institutions.   I therefore wish to encourage the workshop participants to engage meaningful deliberations and robust debates in order the enhance the learning environment. 

22. I am a strong believer in that as DFIs we can only effectively and efficiently deliver on our developmental mandate if  we better equip our personnel with the relevant skills and I believe this training course is one of such initiatives.  After all our core business is financial intermediation which effectively means mobilizing resources from surplus economic agents to deficit economic agents which is our clients and in some cases projects.

23. At this point please allow me to say a few words about the organization that I represent namely  FINCORP. We are a Development Finance Institution owned by Swaziland Government and Tibiyo TakaNgwane holding 80% and 20% shares respectively charged with the responsibility to provide access to credit; create jobs; make meaningful contribution  to poverty alleviation  in Swaziland and lastly to facilitate access to business development support services. We primarily support SME Development; Entrepreneurship and general access to credit.  Resource Mobilization is therefore part and parcel of our daily responsibilities.  

24. In the last four years we have mobilized resources in excess of E474.1 Million through various sources but largely through the Swaziland Stock Exchange (SSX) where we made our maiden listing of a E300 Million Medium Term Bond (MTB) which was adequately subscribed up to E252 Million which represents a 84%  uptake.  I must point out that the Stock Exchange is one such platform that is often ignored and under-utilized in most developing countries yet it has great potential.

25. Successful resource mobilization has the great potential to unlock new opportunities in the market place and further increase scale and scope. Using the financial resources we mobilized in the last four years, we have been able to double our investment in Swazi Economy through SME and General Purpose Finance increasing the quantum from E480 Million in 2012  to E1, 021 Billion in 2016.  We have increased our branch network from 2 to 6 branches; increased number of clients from 9 000 to 16 000;  and finally increased our workforce from 56 to 103. Profitability levels have risen to unprecedented levels. FINCORP now has two subsidiaries namely FIRST FINANCE and FINSURE INSURANCE BROKERS all aimed at increasing access to broadbased financial services. This we believe has resulted in increased contribution to Gross Domestic Product (GDP; financial inclusion; creation of jobs and finally the reduction of poverty levels in communities. 

26. To date we have provided credit cumulatively exceeding E3.1 Billion to more than 80 000 Swazi Nationals who have improved their lives one way or the other and some are continuing to do so even today.  Feedback received from various  independent sources suggest that we are the leading SME Development Agency in the country both by way of outreach and value of financial assistance offered solely to the SME Sector.

27.  Drawing to a conclusion, let me take this opportunity to wish you successful and very rich deliberations during the next three days and I am confident that you will come out of this training course ready to make positive impact at your respective organisations.

28.  I thank you for your kind attention – and I leave you with a quote from  Michael Eric Dyson who said  “My message to all of you is that of hope, courage and confidence. Let us mobilize all our resources in a systematic and organized way and then tackle all the under development that confront us  as nations with grim determination and discipline worthy of a great nations.

29. Do enjoy the rest of the week.

Dumisani J. Msibi

Group Managing Director  – FINCORP