At the BRICS Interbank Coordinating Mechanism meeting, the 2011 BRICS ICM Cooperation Framework Agreement was revised to include the new countries. Picture: Alexandr Kryazhev / Photohost agency
The Development Bank of Southern Africa (DBSA) participated in the BRICS Interbank Coordinating Mechanism (ICM) annual meeting where the revision of the 2011 BRICS ICM Cooperation Framework Agreement (ICMCFA) was on the agenda.
The meeting which ran from October 20 to October 23, 2024 in Moscow was held to prepare for the inclusion of new members in the BRICS ICM Cooperation Framework Agreement (ICMCFA).
The DBSA chairperson Ebrahim Rasool as well as the DBSA CEO Boitumelo Mosako represented the bank at the meeting.
The DBSA said that the ICMCFA is still a reflection of the different member banks’ desire to cooperate and work closely for mutual development and meaningful economic growth.
The ICMCFA does not constitute any legal, financial or other rights or obligations on any member bank, according to DBSA.
This is the purpose of the ICMCFA:
– to strengthen the financial cooperation; enhance the economic and trade relationship among member countries and their enterprises; promote the flow of goods and services among the member countries;
– To enhance the cooperation in financing, guaranteeing and other financial mechanisms to support projects of interest and cross-border transactions.
– To boost the variety of credit services and enhance the overall competitiveness of member banks.
– Study possibilities of providing local currency financing among member banks.
– Enhance the capacity of member banks serving the real economy, limiting exchange rate risks.
– Offer assistance on the requirements of the financial institutions and enterprises of getting access to the capital markets
– Facilitate and coordinate, as far as practically permissible under regulations, laws and policies, knowledge sharing initiatives and the training of personnel of member banks.
After the ICMCFA was signed in 2011, different areas for cooperation were identified and agreed upon through memoranda of understanding (MOUs) and agreements by member development finance institutions (DFIs).
In 2011, the personnel training and experience-sharing was signed to facilitate capacity building and skills development, and in 2013, cooperation was agreed upon in respect of projects and initiatives related to sustainable development.
In 2014, innovations finance was introduced as an important cooperation area to explore.
In 2015, a local currency credit line agreement, to serve as a guide for member banks to make credit facilities available, was reached. However, as of now, no bilateral credit line contracts have been signed and no credit line was signed at the BRICS ICM 2024.
In 2015, joint cooperation with the New Development Bank (NDB) was also agreed on as an area for joint and individual cooperation between members and the NDB.
Later in 2016, an emerging markets-focused credit ratings agency was an area of focus.
“In closing this session of BRICS, it is essential to reflect on key touchpoints from the 2011 agreement, now framed within a global landscape marked by significant concerns,” the DBSA said.
These include global developments like geopolitical tensions, a global election year, and slow economic recovery. These urge DFIs to continually reassess investment risks.
Locally, the economic outlook in South Africa has been boosted by the new government of national unity (GNU), along with low inflation and interest rates which are driving renewed business and consumer confidence.
The DBSA said that the energy and logistics recovery plans are laying the foundation for sustained infrastructure investment and across Africa, and positive growth prospects are allowing for more investment opportunities.
“In conclusion, the hosting of the Finance in Common Summit and G20 by South Africa in February 2025 provides an avenue, not only for dialogue but for investing in the African continent.
“DBSA continues to find value in participating across all workstreams in the BRICS ICM in pursuing its just cause to bend the arc of history towards shared prosperity in the African continent,” it said.
IOL