Minister of Finance Calle Schlettwein says he never told The Namibian newspaper that the Government Institutions Pension Fund (GIPF) has been directed to recall its investment from abroad to boost its depleted cash reserves as a result of cashflow problems.
Schlettwein noted that as a registered pension fund, the GIPF trustees have an unfettered mandate to invest assets under their control, while the only limitations for investment are contained in the domestic asset requirements, as per regulations 28, 15 and 29 of the Pension Fund Act and regulations under the Common Monetary Area regime.
In a statement released on Saturday, Schlettwein emphatically denied a report published in The Namibian on October 16, entitled “Govt cash crunch hits Katutura hospital”, saying the article contains factually incorrect information and is grossly misleading. The article alleged that the GIPF has been directed by the minister of finance to recall its N$90 billion invested abroad to boost the government’s depleted cash reserves.
The same article further alleges that expenditure cuts announced by the minister of finance a week earlier have come into effect and that the Katutura Hospital took the first knock as a result of such cuts by closing the Triage Department last month, leaving hundreds of critically ill patients and the emergency unit of the hospital stranded.
“The combined total assets from all Namibian institutional investors that are invested abroad stand at about N$61.9 billion as at the end of September 2015. Although GIPF assets form a substantial share of such savings, it is impossible, and therefore false to allege that GIPF has invested N$90 billion abroad. The allegations are not only devoid of material facts, but misleading,” said Schlettwein.
“With regard to the expenditure cuts being contemplated by government, this is not a new practice. In fact, it is part of best practice measures all over the world to improve the quality of spending and redirect resources to areas where resources are most needed. It is important to recognise that for quite some time now, some budgetary allocations have been left unspent and returned to the Treasury, leaving some critical needs and services unmet.
“Therefore, the purpose of the expenditure review that government is introducing is aimed at addressing this problem. Moreover, the review is specifically aimed at assessing the level of potential savings from least productive and non-essential items and to redirect these to the provision of essential services within the vote ceilings, without negatively affecting service delivery,” remarked Schlettwein.
He went on to explain that to ensure no harmful effects occur as a result of the realisation of budgetary savings, each line ministry was mandated to assess the budget allocations to the various least-priority programmes and projects, whose budgeted amounts are not likely to be fully spent during the year. The provision of social services, healthcare, education and social safety nets are essential services, to which government has allocated a substantial share of the budget. These are essential services, which are not affected by the proposed realisation of savings.
“There is thus no proposition from the side of government to cut the budgetary allocations to the provision of critical health services. To the extent that shortfalls have been realised, as far as the alleged situation at Katutura Hospital, such a situation cannot be attributed to the savings measures being contemplated. It, therefore, suffices to say that the statement in the article that ‘Budget cuts announced last week by the Minister Calle Schlettwein have come into effect with Katutura Intermediate Hospital taking the first knock’, is not true,” Schlettwein maintained.