Cabinet backs SADC regional development fund agreement
Cabinet has approved Namibia’s participation in the agreement on the operationalisation of the SADC Regional Development Fund (RDF).
This decision follows a request by finance minister Ericah Shafudah for Namibia to sign the agreement, enabling the fund’s operationalisation.
Namibia’s participation in the RDF is grounded in the preamble of the SADC treaty of 1992, specifically Article 26A, which provides for the establishment of the fund. It is aimed at mobilising resources from member states, development partners and the private sector to drive regional development and deepen integration.
The overarching objective of the RDF is to establish a regional financing mechanism for economic development and sustainable growth within the region.
During a meeting of senior treasury officials in December last year, SADC executive secretary Elias Magosi reiterated the treaty’s call for a dedicated regional development fund.
He said the RDF is intended to act as a key financing instrument to promote economic development and regional cohesion.
Funding challenges and solutions
Magosi acknowledged fiscal pressures as a significant barrier preventing member states from meeting their capitalisation obligations to the RDF.
He urged finance ministers to engage with the discussion paper on the fund's operationalisation, which outlines various mechanisms to accelerate both membership and capitalisation.
One proposed mechanism allows member states to access concessional funding from the African Development Fund (ADF), a soft loan window under the African Development Bank (AfDB).
This funding could be utilised to invest in the RDF, offering a financial workaround for low-income countries. Magosi pointed to documented success stories of ADF utilisation across Africa.
For instance, in 2015, the ADF provided 19.87 million units of account (UA) to assist Benin, Ethiopia and Côte d'Ivoire in their equity contributions to the African Trade and Investment Development Insurance Agency (ATIDI), enhancing private sector insurance coverage on the continent.
In 2018, Nigeria received UA10.21 million from the ADF for a similar equity investment in ATIDI.
Magosi concluded by stressing that with AfDB’s commitment secured, SADC must act swiftly to deliver on the fund.
Member states, he said, must now meet their responsibilities to ensure the RDF becomes operational without further delay.
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This decision follows a request by finance minister Ericah Shafudah for Namibia to sign the agreement, enabling the fund’s operationalisation.
Namibia’s participation in the RDF is grounded in the preamble of the SADC treaty of 1992, specifically Article 26A, which provides for the establishment of the fund. It is aimed at mobilising resources from member states, development partners and the private sector to drive regional development and deepen integration.
The overarching objective of the RDF is to establish a regional financing mechanism for economic development and sustainable growth within the region.
During a meeting of senior treasury officials in December last year, SADC executive secretary Elias Magosi reiterated the treaty’s call for a dedicated regional development fund.
He said the RDF is intended to act as a key financing instrument to promote economic development and regional cohesion.
Funding challenges and solutions
Magosi acknowledged fiscal pressures as a significant barrier preventing member states from meeting their capitalisation obligations to the RDF.
He urged finance ministers to engage with the discussion paper on the fund's operationalisation, which outlines various mechanisms to accelerate both membership and capitalisation.
One proposed mechanism allows member states to access concessional funding from the African Development Fund (ADF), a soft loan window under the African Development Bank (AfDB).
This funding could be utilised to invest in the RDF, offering a financial workaround for low-income countries. Magosi pointed to documented success stories of ADF utilisation across Africa.
For instance, in 2015, the ADF provided 19.87 million units of account (UA) to assist Benin, Ethiopia and Côte d'Ivoire in their equity contributions to the African Trade and Investment Development Insurance Agency (ATIDI), enhancing private sector insurance coverage on the continent.
In 2018, Nigeria received UA10.21 million from the ADF for a similar equity investment in ATIDI.
Magosi concluded by stressing that with AfDB’s commitment secured, SADC must act swiftly to deliver on the fund.
Member states, he said, must now meet their responsibilities to ensure the RDF becomes operational without further delay.
[email protected]
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