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Monday 21 January 2019
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Namibia’s Money Game

…..The Winners and Losers, Givers and Takers, Game Changers and Bureaucrats!

 

An Investment Conference analysis on inclusive growth and financial development shows that Namibia has more than N$200 billion in foreign assets of which N$133 billion is managed by GIPF, how can these assets fuel local growth?
The Pensions Funds Act requires that pension schemes(GIPF) assets to be invested in Namibian unlisted investment. A cumulative figure of maximum 10% of its overall assets since 2008 was mandated for domestic investment. Various arguments where brought forth by one of the moderators at the recently-concluded Invest in Namibia Conference, Josephat Mwatotele, on how these funds could play a role in boosting the domestic finance cycle to improve industrialization, manufacturing and support for collateral, etc.

Hon. Minister Calle Schlletwein – The Gamechanger and Winner (“Calle-nomics”)

  • Government assures deeper participation in local business initiatives, but through a change in current rules and practises, those that have must be willing to share with others that don’t have.
  • Calls for widespread participation from state owned enterprises like NHE, Nampower, Namwater to adopt and operate on flexile rules for business inclusion. They also use these entities to build strong capital formation via projects.
  • Capital infrastructure is financed for tax and customs revenue but funds for projects are depleted, thus Public Private Partnership(PPP) is a paramount rescue plan.
  • Donor funding is something of the past. (I wonder how this statement helps Hon. Tom Alweendo in this hard times)
  • Urges for sectors to avail more funds to pursue mine ownership and other growing sectors and also urges people to take part in initiatives identical to NEEEF and share their assets with those that don’t have to bring about reform.
  • Believes there are many feasible projects that banks can play a role in and like other countries did. Hypothetically saying, – “banks must stop making excuses.”
  • Boasted on NHE’s success of seeking venture funds for affordable housing that will commence next year.

Governor Iipumbu Shiimi and Junias Mungunda (Standard Bank CEO)
I call them the Bureaucrats and Givers and Takers because their strategy is linked with what is already adopted and do not add much flexibility and resilience from what their institutional viewpoint is.

Iipumbu Shiimi – Governor of the central Bank “Bureaucrat and Intellect but Policy Defender and Financial Strategy Henchman”:

  • Banks are just role players like everyone else and we need dependency on the entire financial ecosystem. (I want to urge my elder to review the Financial Charter for black inclusion please.)
  • The financial sector strategy addresses solutions to issues like need for collateral already.
  • Banks play in high risk avenues, consider short loan approaches where risks can be shared.

Mr. Junias Mungunda – Standard Bank CEO “Taker and not a Cheerful Giver but Intellectual Bureaucrat”:

  • Banks account to GDP growth and this adds to development and banks operate in competitive space with strict requirements to match world class standards.
  • We must look at other players, just like our inclusion of IFC (World Bank) to help develop the 10% employment equity fund as diligence mechanism have high requirements. (Food for thought, I feel we are so underestimated, was this a board decision?)

Mr David Nuyoma – “The smart, smooth operator Billionaire that needs a bit of patriotism.” High Intellectual but failed the housing game.” The bond market is triumphing over him like a morning ritual along with Mr Namene Kalili.
He said – “I thought that I would change the game when I entered GIPF but saw the real picture once in the system. The pension industry is highly regulated.”

  • Wanted to invest the required 35% assets locally but stresses possibility market shocks if he puts the entire 35% in Namibia.
  • Sees the need for robust capital markets in Namibia and continually exercises their minds on tapping into industrialization strategies.
  • Calls for regulators and policy makers to make more space for domestic investment – Please Mr Shiimi, this is an appeal to you.

Mr Carmelo Cocuzza – EU Investment Bank (I call him speculator, why only invest in Trustco Bank)

  • Told Namibia to remove these collateral issues for SME’s by learning from the G20. (Mr Junias and Shiimi please take note of that).
  • Invested in projects in Energy in Katima and Ohorongo cement and willing to look at PPP projects with government and parastatals in form of guarantees and equity.

Dr Leake Hangala on PPP – I give him 10 out of 10(Winner),  PPP must pull up its socks!

  • Government is not competent enough to deal with high level business initiatives that have hardcore rules for on-time delivery. We cannot come to government and deal with inexperienced civil servants, there must be shared vision and experienced, committed people.
  • Regional authorities need qualified and able minded people because they are responsible for distributing economic resources (water, electricity, land) but yet they are so inexperience and take two years to assess a simple project.
  • Does PPP have a clear feedback and assessing mechanism with static timelines, because they must be wary of greedy private sector companies.
  • Let’s invest more in schools and kindergartens at regional levels.

In conclusion, I have few questions on PPP:

  • Will all government tenders go to PPP companies and will this not be uncompetitive? This is a critical risky situation if we look at August 26 and will they not eliminate smaller enterprises? We need more work on this one.
  • Government will not give cash collateral to PPP – I don’t call this business, I can inclusive development project because higher risks are linked to money. Partnership means risks and technical resources are shared, where will government carry risks on specialised technical industries like phosphate, perhaps consider having various technical committees for each sector.
  • The government is facing many lawsuits and losing them each time, is PPP legal framework in check and flexible to fish-out lawsuit vultures?

Rodney Dan-Ao !Hoaeb is a Trade and Investment Researcher Committed to seeing a radical economic shake-up in Namibia.




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