the payment, clearing and settlement systems. notably the private sector has also initiated activities which will undoubtedly increase access to financial services. to this effect, the first mobile payment service provider was licensed to allow the transfer of money using mobile phones. in the same spirit of extending banking services to the unbanked, we approved a banking license to the first micro finance bank in namibia – that is built on the grameen bank concept. ladies and gentlemen, while these achievements are praiseworthy, it is important to note that more needs to be done. certain segments of our economy are still not benefiting from access to finance. in particular, small and medium - sized enterprises ( smes ), rural communities and the poor are still experiencing difficulties in accessing the services offered by the financial sector. according to the latest fin scope survey, more than 51 percent of the economic active namibians are unbanked or do not have access to financial services. the picture does not get any better with smes. the ncci namibian business climate survey of 2009 indicates that about 55 percent of informal business could not access credit, and 37. 1 percent of those that had access to credit, obtained this from friends and relatives. director of ceremonies, this trend is disheartening, especially for a country that exports national savings to other countries on a daily basis. last year alone, namibia recorded a net outflow of capital to south africa to the tune of n $ 7. 7 billion. year to date, the net outflows are already standing at n $ 8. 9 billion. imagine, what the impact would have been, had we retained just a fraction of that money for investment within the domestic economy. this trend is not sustainable for a country that aspires to be a developed nation by 2030. ladies and gentlemen, we cannot and should not continue with this status quo. we should, therefore, take tough decisions to reverse these trends, with the aim of further increasing access to financial services. our financial sector must become an important pillar of strength to our economy through financial inclusion. every economic activity, geographical region and segment of society must have access to financial services to ensure a more balanced economic growth and development. director of ceremonies, increasingly, world leaders have realised the importance of financial inclusion, as a critical ingredient for a stable economic growth and poverty reduction. therefore, financial inclusion is one of the issues to feature prominently on the agenda of g20 summit in seoul this november. a number of

. there are surely many reasons for this, partly related to various administrative restrictions, different tax treatments and protectionist trade policies. but also political considerations, influenced by a perceived need to maintain special economic and political links to france, appear to have dominated at the expense of regional economic considerations. after 1994, efforts have been made to strengthen regional economic and monetary integration. the objective is to establish a common market based on a customs union and the harmonization of the tax system. economic policy coordination through regional surveillance has also been put on the agenda. one overriding lesson i will draw from these experiences is that the current exchange rate regime can be a basis for stability and economic growth. however, economic development does not follow automatically from this monetary policy arrangement. consequences of inflation targeting in south africa as monetary conditions in namibia are so closely linked with those in south africa, the conduct of monetary policy in that country is naturally of special interest to us. the adoption of a formal inflation targeting framework for monetary policy is a move which the monetary authority and the financial community in namibia has to follow closely. first, it is important for us to understand what inflation targeting is all about. under this system, a specific target for inflation in the medium term is publicly announced. inflation targeting is therefore a monetary policy framework that explicitly recognizes price stability as a medium - term objective. with inflation targeting, monetary policy decisions are guided by expected future inflation relative to the announced inflation target. this system has been adopted in a number of countries in recent years, replacing either a formal intermediate monetary target or an exchange rate target. second, we have to ask ourselves whether the adoption of an inflation targeting system will have any consequences for monetary conditions in the cma countries. one important reason given by the south african authorities for the change is that an explicit inflation targeting framework will be more transparent than the previous framework. to the extent the inflation targeting system and the monetary policy decision - making process is perceived by market participants to be more transparent, this will be a positive development for the other cma countries and for namibia. this should reduce unwarranted market reactions, which at times result in disruptive movements in exchange rates and interest rates, with negative consequences for trade and other economic activities. it is also important for us to note that the adoption of inflation targeting will not in any significant way change the practical implementation of monetary policy. the main operational instrument will continue to be the repo mechanism and the reserve bank does not foresee any need to change