Kudzai Dominic Chiwenga, an Associate Professor at the University of Zimbabwe, has discussed currency strategies and drawn comparisons between the World Bank’s International Monetary Fund (IMF) and the BRICS New Development Bank (NDB).
According to Chiwenga, the NDB offers more flexible and supportive terms compared to the IMF. As the Chairman of the Zimbabwe-Russia Youth Foundation, he noted that the NDB was created to establish a ‘fairer system’ for its member nations and other developing countries.
Chiwenga pointed out that although the IMF was initially founded to assist developing countries, many nations, such as Zimbabwe, have become caught in debt cycles due to high interest rates and unfavorable borrowing terms. In contrast, he believes the NDB offers more equitable financial support and serves as a ‘breath of fresh air’ for countries seeking alternatives to traditional global financial institutions.
BRICS | We Want an Alternative Financial System to Support African Development https://t.co/XQgXEkAXid
— Violet Ikahu (@IkahuGmail) July 30, 2024
He emphasized that the NDB operates with an ‘open-door policy’ that welcomes other nations.
The NDB was founded in 2015 by the BRICS nations – Brazil, Russia, India, China, and South Africa – to mobilize resources for infrastructure and sustainable development projects in the bloc and other emerging markets.
As part of its expansion, the bank welcomed Bangladesh, Egypt, the United Arab Emirates, and Uruguay as new members in 2021. In September 2023, Algeria was also granted membership.
Egypt to Join BRICS Development Bank to Cut Dollar Reliance
Countries are ditching the US Dollar 👀#Bitcoin is the only HOPE!https://t.co/gzoBDXPRlr
— ₿itcoin Xoe 🇭🇹 (@Bitcoin_Xoe) March 19, 2023
The NDB provides loans based solely on economic need and repayment terms without linking them to political conditions.
In contrast, the IMF often includes requirements such as:
- Democratic reforms
- Human rights considerations, and
- Preferential trade agreements with Western countries
as part of its lending conditions.
The New Development Bank successfully raised 1.5 billion ZAR (equivalent to $79 million) during its inaugural South African bond auction in August 2023.
“NDB is seeking to increase its presence in the local capital markets of its member countries, to fund its robust portfolio of local currency loans,” Leslie Maasdorp, NDB’s chief financial officer said at the time.
“The proceeds will be used to fund infrastructure and sustainable development projects in South Africa.”
BRICS | The BRICS Bank Issues Maiden South African 🇿🇦 ZAR Bond Becoming the Highest Rated Issuer Since 2015
The New Development Bank, established by the BRICS group of emerging economies, has successfully raised 1.5 billion ZAR (equivalent to $79 million) during its inaugural… pic.twitter.com/wfG2cv88KN
— BitKE (@BitcoinKE) August 19, 2023
Zimbabwe. ravaged by years of:
- Inflation
- Currency devaluation, and
- Western sanctions,
stands to gain from this alternative route with ‘no strings attached.’
The NDB route can be added to ongoing initiatives to anchor the country’s new currency, the Zimbabwe Gold (ZiG), to its natural mineral resources such as gold.
INTRODUCING | Zimbabwe Introduces Zim Gold, the New Currency Backed by Gold and Precious Minerals – https://t.co/ncKtxrEzpg
— Jack Straw (@JackStr42679640) April 8, 2024
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