One of the quietest revolutions to have taken place in post-apartheid South Africa occured at a nondescript, isolated building in Gauteng’s Midrand. The Development Bank of Southern Africa (DBSA), under the stewardship of CEO Mandla Gantsho, has done more than just change the way it does business.
The bank has evolved into an innovative development financier and, recently, it showed how it intends to shoulder higher risk as it chips in to help accelerate municipal infrastructure delivery.
A large part of the DBSA’s success has been as a result of Gantsho — a publicity averse but suave international development financier whose credentials make him sound more like a development economist than the chartered accountant he originally trained to be.
Economist Iraj Abedian, a board member of the DBSA for the past five years, attributes Gantsho’s success to a number of factors. ‘The first thing,†Abedian says, ‘is a commitment to development.â€
This is important in staying the course that development projects require as well as in picking yourself up after the many setbacks that these projects suffer, says Abedian. It is presumably also important in resisting the overtures of commercial banks, who must frequently beat a path to Gantsho’s door.
Secondly, says Abedian, ‘he brings a set of core expertise†that, harnessed with his formal education, lift those around him.
Gantsho’s continual quest for self-improvement has recently seen him complete a senior executive programme at the London Business School. He also has a master’s degree in project management from George Washington University in the United States.
His pride and passion is how he has managed to steer the DBSA towards inverting ‘the risk and reward model†to develop a new pricing method that allows municipalities to access funding at a lower rate. They will be able to also access projects that may not have qualified previously. ‘We want to challenge the idea that the poorer you are, the more you must pay,†Gantsho says of the model.
In assessing whether a project qualifies for funding, the bank will look its sustainability and not just at the financial state of the municipality proposing to undertake it.
For the coming financial year, the bank expects to deplete R1-billion of its surplus as it makes an impairment provision for loan repayments.
Gantsho expects 40% of projects approved in the new financial year to benefit from the new pricing model. In the year to March, it approved a total of R3,9-billion for 86 projects.
Further afield the bank takes even bolder risks with R8,8-billion invested in the region. It has helped the Zambian Electricity Supply Corporation rehabilitate its infrastructure and get into such good financial shape that it has advanced a $21-million loan.
The DBSA used the presentation of these results to show that development is not synonymous with frugality.
As in past years, their head office was used as a presentation venue, but that is where the cost-cutting ended. This year, plasma flat screens adorned the centre column so that all three tiers of seated guests had a clear view of the speakers as well as the video clips of the projects. Who says development activists lack class?