Heads of Development Finance Institutions (DFIs) from various countries of Southern African Development Community (SADC) countries dispersed from a two day strategic workshop in Gaborone at the end of this week with a renewed sense of vigour.
The forum, which targeted Chief Executive Officers (CEOs) of DFIs from SADC countries, highlighted the importance of sharing experiences between DFIs in the region in order to come up with models suited for effective implementation of their mandates.
Dr Thapelo Matsheka, CEO of Botswana’s Citizen Entrepreneurial Development Agency (CEDA), said in an interview, “We are very delighted to have an opportunity like this one to share ideas and learn how others have succeeded in their own pursuit of excellence.”
Matsheka intimated that his organisation cherished the continued networking of DFIs in the region as it was resourceful in terms of shared ideas.
Again the network offered a benchmarking platform to determine best practice both within the SADC region and internationally.
“Besides, we are proud to acknowledge that as CEDA we were able to train more than 30 members of our staff through various programmes, including one director who trained on corporate governance,” he said.
Other specific training areas from which CEDA and other DFIs benefited comprised mentoring, corporate governance investment appraisal and training of directors.
From Zimbabwe, Fortunate Sekeso, General Manager Small Enterprises Development Corporation (SEDCO) pointed out that DFIs generally tend to face the same challenges regardless of geographical location.
“Undercapitalisation is always a common factor in the operations of DFIs thereby threatening viability and sustenance of corporations, especially small and medium scale enterprises (SMEs),” said Sekeso.
Special mention was made of the apparently exciting presentations made by Vincent Potloane, Chief Treasury Officer of the Land Bank and colleague, Higgo du Toit, Chief Director, Governance and Financial Analysis in the National Treasury Department of South Africa.
Du Toit indicated that leaders of DFIs should be mindful of the fact that their institutions are used as conduits to promote economic development.
He said, it was therefore important that they ensure that implementation of their mandate was not divorced from government policy.
“Notwithstanding the similarities in most of the challenges faced by DFIs in the region as elsewhere, it should be noted that no single model for development finance system (DFS) exists,” explained the South African government official.
On the contrary, each system reflects its unique national circumstances, history and different institutional arrangements.
Thus, it was stated that the success of a DFS is dependent on the commitment of the government to effectively align DFI mandates with its development policy objectives as well as the extent of the independence of the Board and the Executive of the DFI.
In addition, need for proper and effective coordination, as well as reliable and effective monitoring and evaluation systems came up as one of the critical factors that would determine chances of success of DFIs.
Potloane concurred with du Toit thus, “However, even with nearly everything in place, truthfulness to the shareholders is as crucial as is shareholder support in every step of the way.”
The other important element raised by Potloane was that simplicity, precision and proper order of priorities, must show in the DFIs proposed plan of operation or even turnaround strategies, so that it secures the support of shareholders without much effort.