Pan-African Parliament and FAGACE Sign Strategic Agreement to Advance Resource Mobilization and Development Financing

MIDRAND, South Africa: The Pan-African Parliament (PAP) and the African Guarantee and Economic Cooperation Fund (FAGACE) have signed a Memorandum of Understanding aimed at strengthening resource mobilization, institutional capacity and access to development financing for priority programmes of the continental Parliament.

The agreement establishes a formal framework through which the two institutions will cooperate in mobilizing financial and technical resources, building the capacity of parliamentarians and supporting the implementation of initiatives under the Pan-African Parliament’s Strategic Plan.

It was signed during a high-level meeting led by the President of the Pan-African Parliament, H.E. Dr. Fateh Boutbig, and Mr. Amidou Amadou, FAGACE’s Advisor for International Cooperation and Partnerships, who represented the Fund’s Chief Executive Officer and Managing Director.

Members of the PAP Bureau, the leadership of the Permanent Committee on Monetary and Financial Affairs, parliamentarians, senior officials of the Parliament and representatives of FAGACE attended the signing ceremony.

Agreement Provides Framework for Practical Cooperation

The Memorandum of Understanding provides the legal and institutional foundation for converting the emerging relationship between PAP and FAGACE into practical programmes with measurable outcomes.

Under the agreement, the institutions will cooperate in parliamentary capacity-building, technical exchanges, policy and legislative support, youth employment, entrepreneurship and the mobilization of financing for eligible activities identified under the PAP Strategic Plan.

FAGACE will also assist the Parliament in identifying and engaging banks, development finance institutions and other prospective partners capable of providing financial or technical support for PAP programmes.

The partnership is particularly significant at a time when African Union institutions are seeking more sustainable, diversified and African-led approaches to financing continental priorities.

The African Union has consistently acknowledged that excessive dependence on external partners undermines institutional sustainability and has called for alternative and additional sources of funding that would enable Africa to finance more of its own programmes and development agenda.

Boutbig Calls for Measurable and Accountable Implementation

President Boutbig described the signing of the agreement as an important milestone in efforts to strengthen the institutional effectiveness and financial sustainability of the Pan-African Parliament.

He commended the preparatory work undertaken by the Permanent Committee on Monetary and Financial Affairs, the PAP Secretariat and FAGACE, whose engagements paved the way for the formalization of the partnership.

The PAP President, however, emphasized that the value of the agreement would ultimately be determined by its implementation.

He therefore called for the Memorandum of Understanding to be operationalized through clearly defined priorities, measurable activities, transparent institutional responsibilities and effective accountability mechanisms.

The emphasis on implementation reflects the mandate of the newly elected PAP Bureau to provide strategic direction and ensure the effective management of the Parliament in accordance with African Union legal and financial frameworks. Dr. Boutbig was elected President of the Seventh Legislature on 30 April 2026 alongside four Vice-Presidents representing the other regions of the continent.

FAGACE to Bring Guarantee and Investment Expertise

Speaking on behalf of FAGACE, Mr. Amadou outlined the Fund’s role as an international financial institution specialising in financial guarantees and the promotion of public and private investment.

Through its guarantee instruments, technical assistance and resource-mobilization expertise, FAGACE helps Member States, financial institutions and businesses share investment risks and improve access to finance.

The Fund’s interventions are particularly relevant to small and medium-sized enterprises, which frequently struggle to obtain financing because of collateral requirements and the perceived risks associated with lending.

FAGACE’s portfolio guarantee mechanism, for example, enables participating banks to make guarantee facilities available to qualifying small and medium-sized enterprises. The Fund also provides technical assistance and other financial instruments designed to facilitate investment and economic development.

Established in Kigali, Rwanda, in February 1977 and headquartered in Cotonou, Benin, FAGACE was created to support African economies through the promotion of public and private investment.

Its mission is to contribute to the economic and financial development of its Member States by facilitating the financing and implementation of development projects, particularly through loan guarantees.

FAGACE currently has 14 Member States and has mobilized more than CFA francs 2.5 trillion in support of their economies over the course of its operations. Its capital was increased from CFA francs 350 billion to CFA francs 500 billion in 2023.

Partnership Builds on PAP Committee Mission to Benin

The agreement is the outcome of sustained engagements led by the PAP Permanent Committee on Monetary and Financial Affairs.

In December 2025, members of the Committee undertook a benchmarking mission to FAGACE’s headquarters in Cotonou, where they examined the Fund’s guarantee mechanisms, financing instruments and institutional model.

The mission also explored opportunities for the Pan-African Parliament to strengthen legislative, policy and advocacy frameworks supporting development financing, access to credit and investment across Africa.

Those discussions highlighted the complementary mandates of the two institutions.

While FAGACE possesses expertise in guarantees, investment facilitation and financial-risk management, the Pan-African Parliament provides a continental platform for legislative dialogue, policy advocacy and parliamentary oversight.

PAP was established to promote the participation of African peoples in the economic development and integration of the continent. It presently exercises consultative, advisory and budgetary oversight functions within the African Union.

The new cooperation framework could therefore enable PAP to complement FAGACE’s financial expertise with parliamentary advocacy, policy development and engagement with national and regional legislatures.

Committee Pledges Institutional Continuity

The Chairperson of the PAP Permanent Committee on Monetary and Financial Affairs, Hon. Robert Nkili, reaffirmed the Committee’s commitment to sustaining the partnership and advancing the implementation of the agreement during the Seventh Legislature.

The Committee is expected to play a central role in developing relevant policy and legislative initiatives, coordinating technical exchanges and overseeing the institutional follow-up required to transform the agreement into concrete results.

Maintaining continuity will be particularly important because the partnership originated from engagements undertaken before the commencement of the Seventh Legislature.

By carrying the initiative forward, the Committee would demonstrate that strategic programmes of the Parliament can be preserved and strengthened across successive parliamentary leadership cycles.

Compliance With AU Financial Rules Remains Central

Both institutions placed particular emphasis on ensuring that all activities and potential financing arrangements arising from the agreement comply fully with the African Union’s Financial Rules and Regulations.

The cooperation framework does not give PAP unrestricted authority to borrow money, conclude financing arrangements or receive and expend funds outside established African Union procedures.

Rather, prospective programmes will have to undergo the appropriate institutional approval, budgeting, procurement, accounting, auditing and reporting processes.

This safeguard is critical to ensuring that resource mobilization strengthens the Parliament without undermining transparency, accountability or the financial governance architecture of the African Union.

The parties will consequently develop a detailed implementation framework setting out agreed priorities, institutional responsibilities, timelines, expected results and monitoring arrangements.

That implementation framework should also clarify the nature of FAGACE’s interventions, distinguish technical assistance from financing or guarantee commitments, and identify the African Union approvals required for each proposed activity.

Focus on Youth Employment and Entrepreneurship

The inclusion of youth employment and entrepreneurship among the priority areas gives the partnership a wider developmental dimension.

Africa has the world’s youngest population, but millions of young people continue to face unemployment, limited access to capital, inadequate technical support and significant barriers to establishing sustainable businesses.

Through the partnership, PAP could use its continental platform to promote stronger laws and policies supporting entrepreneurship, access to credit, financial inclusion and the growth of small and medium-sized enterprises.

FAGACE, for its part, could provide technical knowledge on guarantee instruments and risk-sharing mechanisms capable of encouraging financial institutions to lend to viable youth-led enterprises.

The cooperation could also strengthen parliamentarians’ understanding of development finance, public-private investment, credit guarantees and the legislative conditions required to attract responsible investment.

This would enable PAP Members to engage more effectively with governments, national parliaments, financial institutions and the private sector on the structural barriers limiting access to finance.

Expanding Engagement With African Financial Institutions

The agreement is also expected to support the Pan-African Parliament’s engagement with other continental financial institutions, including the African Development Bank Group.

Such engagement could create a broader network of African institutions working together to mobilise capital, strengthen domestic financial systems and finance continental development priorities.

The African Development Bank has highlighted the importance of African guarantee funds, including FAGACE, in strengthening the continent’s financial architecture and expanding the availability of capital for development.

For PAP, deeper engagement with African financial institutions could enhance its ability to undertake policy research, organize technical consultations, develop model laws and build the capacity of Members in areas such as public finance, debt management, investment governance and regional economic integration.

It could also strengthen the Parliament’s advocacy for African-led solutions to the continent’s development-financing challenges.

From Agreement to Results

The signing of the Memorandum of Understanding represents a promising step, but its long-term significance will depend on whether the institutions can translate its broad areas of cooperation into properly designed and adequately governed programmes.

Immediate priorities should include establishing a joint implementation mechanism, identifying a limited number of achievable projects, determining the resources required and agreeing on measurable performance indicators.

The partnership should also produce periodic reports detailing activities undertaken, resources mobilized, beneficiaries reached and progress made towards the objectives of the PAP Strategic Plan.

With proper implementation, the agreement could help the Pan-African Parliament diversify its partnerships, strengthen the technical capacity of its Members and expand its contribution to African development financing.

More importantly, it could demonstrate how cooperation between a continental parliamentary institution and an African financial institution can connect policy, legislation, investment and institutional development.

The PAP–FAGACE agreement therefore represents more than a resource-mobilisation arrangement. It is an opportunity to strengthen African institutional cooperation and advance the broader goal of enabling the continent to finance and implement more of its own development priorities.