Costed Action Plan for SADC Industrialization Strategy and Roadmap could be guided by experiences elsewhere, for example European Regional Development Fund and the Mercosur Development Fund in Latin America. To this effect, the Action Plan lays out interventions to speed up the operationalisation of the SADC Development Fund. Actions are needed to address illicit financial flows and to reform the financial sector to ensure adequate resources for industrialization. The role of Development Finance Institutions (DFIs) is critical in this context. National and multilateral development finance institutions have a central role in effective industrial strategies, together with measures to incentivise and facilitate increased private investment. To be effective, DFIs should support new industrial activities, which may initially provide lower initial rates of return and face higher risks than those that accrue from mining, import intensive retail sub-sectors and services sectors. Industrial financing should also be provided to sectors in distress arising from the local recession and negative cyclical market conditions. 7.4.2 Private Sources Stock exchanges in the region could provide critical resources for financing industrial activities. In particular, private equity and venture capital funds (risk capital) can be used to develop new products and technologies, expand and strengthen company operations. 7.4.3 Public-Private-Partnerships Public-Private-Partnerships (PPPs) are effective financing mechanisms for both national and regional development activities, especially infrastructure projects. PPP policies and strategies should allow consideration of a full range of PPP options to ensure optimal investment and financing choices. 7.4.4 Foreign Direct Investments FDI flows, already significant for some SADC countries especially those endowed with tradable natural resources, should be judiciously attracted to finance industry, tourism and infrastructure. To this effect, the micro and macro-economic environment for development should be significantly enhanced across the SADC countries. 7.4.5 External Assistance External financial and technical assistance should be well targeted to achieve long-term development objectives notably in the areas of industry and infrastructure and skills development. In the light of the financing constraint implicit in Tables 7.1 to 7.3, the Action Plan seeks to prioritize those activities most crucial to the successful implementation of the 59