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Role in SADC
The SADC-DFRC was established under the Principle of Subsidiarity, as approved by the SADC Council of Ministers meeting of October 2002 in Luanda, Angola. Subsidiarity was adopted by SADC member states as one of the Community’s core principles essential for facilitating delivery on SADC’s Common Agenda. By definition, the adoption of the principle of subsidiarity means that:
“….all programmes and activities should be undertaken at levels where they can best be handled based on consultations between governments and relevant stakeholders. The involvement of institutions, authorities, and agencies outside SADC structures to initiate and implement regional programmes using their own generated resources should be promoted and encouraged.”
The founding MOU establishing the Network and the amending addendum are incorporated into the Finance and Investment Protocol of SADC . Following its adoption by SADC Member States, the Protocol transformed the DFI Network and the DFRC into full-fledged Protocol-based organisations of SADC.
Relationship with SADC Secretariat
The SADC Committee of Ministers responsible for Finance and Investment (COMFI) is a permanent committee of the Integrated Committee of Ministers (ICM) which reports through to the SADC Council of Ministers. COMFI is supported by the Senior Treasury Officials and the Committee of Central Bank Governors.
The DFI Subcommittee, which is comprised of all national DFIs in SADC member countries, is a subcommittee of the Senior Treasury Officials of SADC, and reports through them to COMFI.
The DFIs, through the DFRC, enjoy a functional relationship with the SADC Secretariat. Their main interface is through the Directorate for Finance, Investment and Customs (FIC). However, operational links also exist between the DFRC and the Trade and Industry, Infrastructure and Services and Food, Agriculture and Natural Resources Directorates.
While all members of the Network are members of the DFI Subcommittee, not all DFIs represented on the Subcommittee are members of the Network. The Network is comprised of those DFIs that have signed the May 2000 MOU, which establishes it as an institutional mechanism of SADC.
The aim of the Network is to co-operate to ensure availability of adequate developmental finance in SADC. Currently, forty (40) DFIs from 15 SADC countries have signed the MOU and are members of the Network.
The DFRC is ‘owned’ collectively by all the DFIs in SADC as an ‘industry-owned’ self-help organization. It provides the vehicle for supporting advisory and capacity building services to the Network and the finance sector. The DFRC is expected to facilitate, through the Network, the emergence of a new ‘internal market forces dynamic’ aimed at addressing regional development financing needs. By being pro-active and acting on behalf of all its members, the DFRC plays an importanting role in shifting the region's development financing capacity, knowledge and skills base gradually towards the cutting edge of financial services delivery.
DFIs vis-a-vis NEPAD and AU
Development Finance Institutions play a critical role in the SADC region through, among other areas, the provision of long-term capital for development projects for infrastructure, for stimulating industrial development and value-adding, promoting entrepreneurship and private sector development, trade finance, capital markets development, financing of agricultural development, microfinance and gender credit and support.
As highlighted in the SADC RISDP, these areas are crucial for the successful achievement of regional integration and co-operation. SADC recognises the important role of the DFI Network’s financing activities in achieving the successful implementation of the RISDP and the attainment of its goals of sustainable and inclusive economic development, poverty alleviation and employment creation.
As a critical strategy of the African Union (AU), the New Partnership for Africa’s Development (NEPAD) initiative