Johannesburg - The Development Bank of Southern Africa (DBSA) wants to keep on delivering on its mandate to South Africa and the rest of the continent, despite navigating through a depressed economy.
The group said Africa had been affected by the fall in commodity prices and a drop in oil prices, which made it difficult to deliver on some of the infrastructural projects during 2016.
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On Friday, the bank delivered its half-year results to end-September, in which it reported a 27 percent decline in profits to R1.04 compared with R1.43bn reported in 2015.
The bank said the decrease was due to a foreign exchange loss amounting to R474m, as well as a revaluation loss on financial instruments which amounted to R131m.
It said total assets declined 1.1 percent to R81.4bn, down from R82.3bn in March. “This was due to a sale of O3b Networks equity investment and excess cash surplus, which was used to fund disbursements,” the bank said.
In April the World Bank said economic activity in sub-Saharan Africa slowed in 2015, with gross domestic product (GDP) growth averaging 3 percent, down from 4.5 percent in 2014. This means that the pace of expansion decelerated to lows last seen in 2009.
The World Bank said the 2016 growth forecast would remain subdued at 3.3 percent. This is way below the robust 6.8 percent growth in GDP that the region sustained in the 2003 to 2008 period. Since then it has been plagued by the plunge in commodity prices - particularly oil, which fell 67 percent from June 2014 to December 2015, and weak global growth, especially in emerging market economies.
It said overall, growth was only projected to pick up in 2017/18 to 4.5 percent.
Despite these shortcomings the bank said it still wanted to deliver on its mandate by expanding access to development finance and effectively integrating and implementing sustainable development solutions.
Cash on hand declined by 12.98 percent to R1.81bn, compared with R2.08bn in 2015.
Looking ahead the bank said the initiatives put in place could help change its fortunes. “The success to the year ending March 2017 hinges on the DBSA’s ability to continue delivering on its mandate within the uncertain economic environment. The responsive initiatives that have been put in place would see the targeted results achieved.”
DBSA received a boost when its suspension by Futuregrowth was lifted following a rigorous due diligence process.
Chief executive Patrick Dlamini said the process confirmed that the DBSA had an appropriately constituted board with a suitable balance of skills and experience; a positive and constructive relationship between the board and executive committee; and evidenced application of policies and processes.
BUSINESS REPORT