22
Oct
Questions around how government would finance the payments have swirled since South Africa announced its participation in the bank‚ especially as the February budget made no allocation for it.
However‚ today Finance Minister Nhlanhla Nene announced that the remainder of the approximately R25 billion made from the sale of its 13.8 percent stake in Vodacom in July‚ would be used to make the first payment.
The BRICS or New Development Bank requires all participating nations – Brazil‚ Russia‚ India‚ China and South Africa – to contribute $10 million each.
However‚ only 20 percent or $2 billion (approximately R26.8 billion at current exchange rates) of this needed to be paid upfront‚ with the remaining 80 percent to be made available only when called upon.
The $2 billion will be paid in seven tranches. The first‚ totalling approximately R2 billion‚ is due soon.
The bank will be headquartered in China‚ but Johannesburg will play host to a regional office.
It is envisaged that it will fund development projects at preferential lending rates.
Nene said the first payment was being made via special appropriation whereafter payments would be “done through the normal budget”.
He said the reason for this was that the first payment was due before the February budget.
The remaining R23 billion was used to recapitalise Eskom.
Nene said the sale of non-core assets to support the budget would not be standard practice. “The sale of non-core assets is always as a result of need. I can’t say we are all out looking for non-core state assets to sell‚” he said.
Source: http://www.timeslive.co.za/politics/2015/10/21/Nene-finds-cash-for-BRICS-bank