DBSA Charter, Strategy & Key Initiatives

Presentation to Select Committee on Finance,

21 June 2006, Cape Town

DBSA TEAMAdmassu Tadesse: Head, Corporate Strategy, Office of the Chief Executive

Bethuel Netshiswinzhe, Regional Manager, Northern RegionReuben Matlala: Programme Manager, DBSA Development Fund

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Outline of Presentation

• PART ONE DBSA Charter, Strategy and Key Initiatives

• PART TWOSiyenza Manje Initiative

• PART THREESustainable Communities Initiative

• PART FOUR Local Investment Agency Initiative

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Basis of Charter

• MANDATE – DBSA Act of 1997– Regulations

• MISSION– finance & expertise

• GUIDING PRINCIPLES– Additionality– Development impact– Sound banking practices

• POLICY/INVESTMENT DIRECTIONS– Constitution & Legislation– People’s Contract– MTSP/MTEF– Dept/Sector Policy Frmwrks, Initiatives

& Programmes – ASGISA, PGD Plans & IDP– SADC RISDP– NEPAD & MDGs

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DBSA’s Vision 2014 is:

• the progressive realization of an empowered and integrated region free of poverty, inequity and dependency;

• to serve as a leading change agent for sustainable socio-economic development in the SADC region, and as a strategic partner in Africa south of the Sahara.

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Our Single Overarching Goal is:

• Improve the quality of life of the people of the region;

Our Five Core Objectives are:1. Co-deliver social & economic infrastructure

2. Build human & institutional capacity

3. Promote broad-based economic growth, job creation, cooperation, integration & prosperity

4. Serve as a centre of excellence for development financing, innovation & effectiveness

5. Ensure internal financial sustainability

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DBSA’s Core Strategies

• Invest in assets, hard (physical) and soft (human & institutional), that serve the poor, directly and indirectly, and that create broad-based wealth creation (infrastructural and productive capital);

• Mobilise, develop, apply and manage knowledge in support of development effectiveness, innovation and generally an enabling developmental environment;

7 50s 60s 70s 80s 90s 00s

17/05/05

social infrastructure (R13b in 2004)

Economic infrastructure 2004 (R40 Billion)

0

2

4

6

8

10

12

14

16%

of G

DP

Infrastructure Investment as a % of GDP

Infrastructure Investment as a % of GDP

Source: RMB Economics & Reserve Bank Quarterly Bulletin

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Infrastructure service backlogs

0

2

4

6

8

10

12

14

Ho

use

ho

lds

(Mil

lio

ns)

1996 2001 1996 2001 1996 20011996 2001

Water Sanitation Electricity Telephones

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1 - Broadening & DeepeningDevelopment Impact

7. PerformanceRecognition & Reward

3. KnowledgeManagement

4. SmartPartnerships

5. Innovation & CorporateEntrepreneurship

6. Responsible Risk Taking& Risk Management

2. Black Economic Empowerment

8. Alignment of Strategy, Structure,Processes & Culture

Vision 2014 Strategic Thrusts

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Key Strategic Initiatives• Siyenze Manje (ST 1, 3, 4)• Sustainable Communities Initiative (ST 1, 2, 3, 5)• Local Investment Agency (ST 1, 2, 3, 6)• Vulindela Academy (ST 1, 3, 4)• Strategic & Operational Support to

•Expanded Public Works Programme (ST 1, 2, 3, 4)•Project Consolidate (ST 1, 3, 4)

• New Pricing Model (ST 1, 2, 5, 6)• Targeted Infrastructure Programme (ST 1, 6)• Soccer World Cup 2010 (ST 1, 4)• LG Network & Resource Centre (ST1, 3, 4, 5)• Internal Corporate Entrepreneurship & Innovation (ST 1, 3, 5)• South African DFS Forum (ST 3, 5)• Knowledge Management Africa (ST 1, 3, 4)

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DBSA Execution ModalitiesFINANCIER PARTNER ADVISOR

Grant-maker Catalyst Policy analysis

Lender Lever Advocacy

Investor Implementation Agent

TA & training

Under-writer Collaborator

(Development

Facilitation)

Research & Evaluation

Arranger Integrator Development

Information

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DBSA’s Differentiated Roles in the Wider Regional Context (a)

FINANCIER

Role/Scope

ZA SADC ASoS

Grant-maker

Lender

Investor

Under-writer

Arranger

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Key Goals of Government’s Contract with the People

1. Reduce poverty by ½, via economic development, improved household & community assets

2. Provide skills & resources, build capacity

3. Reduce unemployment, new jobs, skills development, sustainable livelihoods

4. Reduce diseases, malnutrition, HIV/AIDS & preventable causes of death

5. Position RSA as effective force in global and regional relations – African growth & prosperity

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DBSA Targets Toward Government’s People’s Contract (a)

DBSA TARGET TARGET LEVEL

GOAL IN PEOPLE’S

CONTRACT

1/ Contribution to Employment Creation in South Africa (due to loan finance)

- Total (absolute numbers)- Skilled- Semi-skilled- Unskilled

126 52814 07755 55956 892

Goals 1, 2, 3

2/ Number of households connected to one or more basic services

2,421,117 Goals 1, 3, 4

3/ Income Contribution to Low Income Households in South Africa

R 3,1 billion

Goals 1, 3

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DBSA TARGETTARGET LEVEL

GOAL IN PEOPLE’S

CONTRACT

4/ Contribution to Growth of the South African Economy (GDP)

R 22,2 billion

Goals 1,3

5/ Number of projects appraisals and feasibility studies undertaken or funded 2 000

Goals 1,3, 5

6/ Number of government officials, service delivery staff and other development organisation staff trained

50 000Goals 2, 4

7/ Number of municipalities assisted in the establishment and development of financial management systems and capacities

136

Goal 2

DBSA Targets Toward Government’s People’s Contract (b)

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DBSA TARGETTARGET LEVEL

GOAL IN PEOPLE’S

CONTRACT

8/ Number of municipalities assisted in the establishment and development of performance management systems and capacities, (especially planning, budgeting, revenue collection and credit control)

136Goal 2

9/ Number of municipalities and provinces assisted in development planning and project preparation

All provinces &

municipalities

Goals 1, 3, 4

DBSA Targets Toward Government’s

People’s Contract (c)

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DBSA TARGETTARGET LEVEL

GOAL IN PEOPLE’S

CONTRACT

10/ South Africa local capacity building and technical assistance grants R 1 billion

(spend)

Goals 2, 4

11/ South Africa infrastructure spend R 30,4 billion

Goals 1, 2, 3, 4

12/ Southern Africa infrastructure and economic growth spend (excl. RSA) R 15,2

billion

Goals 4, 5

DBSA Targets Toward Government’s

People’s Contract (d)

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Thank You