8 0 S O U T H E R N A F R I C A N D E V E L O P M E N T C O M M U N I T Y involve partnerships in the sense that government STRATEGIES creates a separate, contractual "partner". a) Harmonising and achieving best practice in the Policy, Legal and Regulatory Environment. TARGETS Harmonising the policy, legal and regulatory frame- • Creation of Public-Private Partnership Units and work for managing financial and capital markets is capacity building thereof in Member States by critical. Implementing best practice in adopting the 2005; policies and laws for dealing with financial regulation. • Development of PPP policies, strategies and b) Promote broader participation by the population in guidelines in Member States and harmonisation of equity markets through the restructuring of State Own PPP regulatory framework at the regional level by Enterprises and other empowerment mechanisms. 2007; and Governments can encourage the participation of the • SADC countries will need to shift from 100% population in equity markets through the re- physical structuring of State Owned Enterprises by offering infrastructure to a 70:30 ratio of public-to-private part of the equity to the broader section of the finance by 2010 and a 50:50 ratio by the year 2015. population at a discount. Governments can also reliance on public finance for encourage private sector to spread the participation in shareholding to a broader section of the population 5.3.2 SADC Financial and Capital Markets whenever there is an initial public offering (IPO). The presence of well-developed and robust financial systems will increase flows of foreign investment into the TARGETS region. However, the SADC region has a narrow range of • Full implementation of the MOUs and programmes intermediaries and limited financial instruments. The lack of CCBG, DFIs, CISNA, Stock Exchanges, Banking of liquidity, due to the limited number of market Association; participants and the low market capitalization also poses • Development and implementation of programmes a barrier to investment in securities, as it is difficult to and strategies to increase the participation of the determine a market price for an investment in an illiquid broader population in the equity markets by 2008. market and the investment risk increases owing to the additional risk that the investor may not be able to dispose of the investment at the expected price. 5.3.3 Private Equity and Venture Capital Funds The SADC Committee of Stock Exchanges is an Private equity provides equity investment (risk capital) to initiative to fast tract the development of capital markets enterprises not quoted on a stock market. It is used in in the region by improving the liquidity of trade in developing new products and technologies, to expand equities, bonds, derivatives and other financial working capital, to make acquisitions, or strengthen a instruments in Southern Africa, so as to raise capital for company's balance sheet. Private equity also resolves regional economic development and to make the SADC ownership and management issues: a succession in securities markets more attractive to local and family-owned businesses, or management buy-out or international investors. The Committee's strategy is to buy-in (MBO/MBI). Venture capital, which is a subset of keep national markets autonomous and to find ways of private equity, provides equity investment (risk capital) using technology, skills-sharing, dual-listing and cross- for early stage of business development including seed or border investment within the SADC to accelerate launch, start-up, and early expansion. development of a regional capital market. The vision is to The recent direction in private equity and venture have established an integrated real-time network of the capital is the development of transnational private equity region's national exchanges by the year 2006. This funds where institutional investors to the fund come from initiative should improve the liquidity and attractiveness various countries and the fund's mandate is to invest in of small national stock exchanges. different countries or regions. The infrastructure funds