The finance ministry yesterday confirmed that a N$1.5 billion loan for Namibia has been approved by the African Development Bank (AfDB) to finance the Namibia Governance and Economic Recovery Support Programme (GERSP).
Government requested financial support from the AfDB in June last year through a Covid-19 Rapid Response Facility (CRF) to address the impact of the pandemic and to help maintain state welfare programmes. Government is also awaiting word next month from the International Monetary Fund on a N$4.5 billion loan application.
A statement from the finance ministry’s Executive Director, Ericah Shafudah, noted the request was unanimously approved by AfDB’s board of directors on 17 March 2021 to the tune of US$100.27 million (N$1.5 billion).
“The approval follows the completion of the Economic Governance and Competitiveness Support Programme (2017-2020), which has achieved significant results in the areas of fiscal consolidation, public financial management and improvement in the business environment. However, the Covid-19 pandemic threatens to reverse some of those gains,” read the statement.
It further noted that as Namibia prepares for a post-pandemic era, government is pursuing reforms in a wide range of areas.
“The proposed GERSP operation is designed to support the government’s response and help to achieve inclusive post-pandemic economic recovery through improved governance and real sector reforms.”
The three main areas of focus are fiscal sustainability, private sector-led agriculture and industrial sector transformation, and economic and social inclusion.
The loan is expected to assist in the creation of fiscal space to finance critical development spending, implement reforms that will help maintain macroeconomic stability as well as transform key sectors such as agriculture and industry, and improve economic and social inclusion.
The AfDB loan is payable over a period of 15 years and according to finance minister Iipumbu Shiimi, the approval of the loan comes at an opportune time as Namibia starts the process of rebuilding the economy and implementing the Harambee Prosperity Plan 2 (HPP2) with the view of achieving sustainable and inclusive transformation.