Finance minister outlines youth entrepreneurship fund plans

Minister of finance Ericah Shafudah at the National Assembly, Windhoek, 2 September 2025

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I stand before this august House to provide a comprehensive briefing on the National Youth Entrepreneurship Fund (Nyef), outlining its objectives, structure, operational framework, and anticipated impact on youth empowerment and national economic growth.

Background and context

In line with the National Development Plan 6, the government remains firmly committed to implementing targeted initiatives that address youth unemployment while fostering the development and sustainability of youth-owned enterprises. The Nyef represents a key instrument in this strategy, designed to provide enhanced funding mechanisms and support for young entrepreneurs across the country.

The Ministry of Finance has been tasked with the development of the Nyef and the mobilisation of resources amounting to N$500 million. This capital is intended to empower the youth to initiate, sustain, and expand business ventures across multiple sectors of the economy.

Fund allocation and strategic alignment

For the 2025/26 financial year, N$257 million was earmarked for the Nyef. This allocation complements similar youth-focused programmes implemented under other offices, ministries and agencies (OMAs), including the ministries of gender equality and child welfare, education, innovation, youth, sport and culture, industries, mines and energy (Equipment Aid Scheme), and the Social Security Commission. Collectively, these programmes create a comprehensive ecosystem of support for youth entrepreneurship.

The Nyef is structured to establish a sustainable entrepreneurial ecosystem that aligns with the 2024 cabinet-approved National Policy on Informal Economy, Startups and Entrepreneurship, the Swapo Party election manifesto and implementation plan, and national employment creation objectives. By doing so, the fund aims to act as a cornerstone in the government’s efforts to generate economic opportunities for young Namibians.

Additionally, the Nyef will align with national financial frameworks, including the recently approved Namibia Financial Sector Development Strategy (2025-2035) and the proposed National Integrated Financing Framework. These initiatives underscore the government’s commitment to developing a robust financial system capable of supporting youth entrepreneurship, facilitating employment creation, and contributing to the broader objectives of the Sixth National Development Plan.

Operational framework and fund management

As outlined in Annexure 1, the fund will be hosted within the Ministry of Finance while leveraging multiple development finance institutions (DFIs) as conduits for financing youth enterprises. This multi-channel approach ensures accessibility, reduces bottlenecks in processing, and enhances overall efficiency in the disbursement of funds.

Reliance on a single channel has historically resulted in delays and restricted access to funding. By diversifying the channels through which resources are disbursed, the Nyef aims to provide more equitable and timely financial support to eligible youth enterprises.

Thus, the Development Bank of Namibia, Environmental Investment Fund, Agribank, and Nampost serve as intermediaries for fund disbursement. These institutions will operate under uniform lending terms and conditions consistent with the Common Guidelines. While Nampost has indicated that it is not yet ready to participate, it has expressed a willingness to join the initiative once operationally prepared.

The fund is designed with sustainability as a core principle, incorporating an endowment component. This ensures that interest income generated from the capital can be reinvested on a revolving basis, providing ongoing financial support for youth enterprises while attracting additional resources from external financiers.

The fund also has an ecosystem development component, which is to ensure business development services such as mentorship, coaching and market access support among others.

Monitoring, evaluation, and data integration

The Nyef will implement rigorous monitoring and evaluation mechanisms to continuously assess the impact of its activities. These measures will track the number of enterprises initiated, sustained, or expanded; the employment and self-employment generated; the delivery of business development services such as mentoring, coaching, and advisory support; and the effectiveness of resource mobilisation from the endowment capital.

To enhance operational efficiency, the Ministry of Finance, in collaboration with the National Planning Commission and the Ministry of Information and Communication Technology, will establish an integrated data platform linking all conduit systems. This platform will enable real-time monitoring, improve decision-making, and ensure that the fund remains adaptive and responsive to the needs of the youth segment.

Furthermore, the centralised system will connect to all OMAs supporting youth initiatives, promoting inter-institutional collaboration, reducing duplication of funding, and improving overall resource allocation. To address financing costs, the fund will employ policy-based finance principles, which include credit enhancements, guarantees, and business development support to correct market failures and improve access to finance for underserved segments of the economy.

For the Nyef, directed lending will be structured through the designated conduits and will be capped at maximum 4%, thereby reducing financial barriers and supporting equitable access for young entrepreneurs.

Sustainability, equity, and development impact

Historically, lines of credit have been priced based on the prime rate, which is typically 300 basis points above the repo rate. By adopting the repo rate as the benchmark, the Nyef significantly lowers the cost of finance for youth beneficiaries. Directed lending guidelines will also ensure equity by addressing regional imbalances, promoting women’s empowerment, and supporting marginalised communities.

The Nyef’s developmental impact will be measured through multiple criteria:

• Number of businesses initiated, sustained, or scaled up
  
• Employment and self-employment created
  
• Provision of business development services to targeted beneficiaries
  
• Effectiveness of the endowment in mobilising additional resources
  
• Support to implementing agencies to create a viable ecosystem of agency banking and entrepreneurship support
  

The Nyef is distinguished as a host fund, adopting a youth-focused philosophy and mandate, ensuring sustainability through its endowment, and establishing a network of implementing agencies. It promotes financial innovation, particularly in addressing collateral constraints, and encourages inter-institutional collaboration through integrated data platforms, breaking away from siloed approaches previously observed in financing mechanisms.

A review of existing schemes and DFI portfolios indicates challenges such as fragmented approaches and repayment difficulties. The Nyef addresses these challenges by fostering collaboration, integrating existing programmes, and supporting directed lending initiatives. Early observations from the SME Credit Guarantee Scheme demonstrate promising examples of public-private collaboration that can be scaled through the Nyef framework.

Anticipated outputs and impact

Once operational, the Nyef is expected to:

• Reduce youth unemployment by creating new jobs and business opportunities
  
• Alleviate poverty through increased youth income and improved living standards
  
• Promote economic inclusion by integrating marginalised youth, including rural communities, women, and persons with disabilities, into the formal economy
  
• Drive sustainable economic growth through youth-led businesses that enhance productivity, innovation, and GDP
  
• Strengthen social stability by mitigating youth disenfranchisement and associated social risks
  

Through the Nyef, the government is establishing a transformative platform to empower the youth of Namibia, stimulate entrepreneurship, and contribute to sustainable economic growth. We remain committed to monitoring progress, fostering innovation, and ensuring that the fund delivers meaningful and lasting impact for the young people of this country.

Pre-implementation phase

To assess the operational readiness of the fund, the Ministry of Finance, in collaboration with regional governors and regional councillors, initiated a pilot phase from 1 August to 25 August 2025, which was subsequently extended to 4 September 2025 in response to requests from governors and applicants.

The purpose of this pilot was to evaluate the level of youth engagement in entrepreneurial activities, assess applicants’ writing and planning skills levels, and determine overall readiness for the full roll-out of the fund.

Following the 4 September 2025 deadline, the governors will submit the applications to the Ministry of Finance. In consultation with the DFIs, who will adjudicate the applications and select successful proposals for award.

After the official launch, eligible youth will be able to submit applications to the various DFIs for funding support.

I thank you.

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