Windhoek-The total assets of the Government Institutions Pension Fund (GIPF), as at the end of August this year, stood at approximately N$105 billion or roughly 64 percent of the country’s Gross Domestic Product (GDP). However, during the last 12 months, the fund’s return on investment was a mere 7.2 percent, which is considerably lower than the mid-teens or even early 20s the fund experienced in the last few years.
“As a result (of the lower returns on investment), we have to think about what we can do and what we cannot do,” said GIPF CEO, David Nuyoma, speaking at a media workshop in the capital yesterday.
At the same workshop, GIPF’s General Manager for Investments, Conville Britz, noted that the fund already meets local requirements in terms of domestic asset allocation, as it currently invests close to 50 percent in the domestic market. However, Britz stressed that GIPF needs to do more to limit its exposure to dual-listed shares.
Namibia has to increasingly mobilise domestic resources to finance its national development agenda. As such, the policy to raise the domestic asset requirement threshold is now due for implementation with the gazetting of amendments to domestic resources requirement expected this month.
These amendments, which will apply to financial institutions like banks, insurance companies and pension funds like
GIPF, will lift the domestic asset requirements from the current 35 percent to 40 percent by January 2018, 42.5 percent by April 2018 and 45 percent by October 2018. These policy changes are expected to release substantial savings into the domestic economy for listed and unlisted opportunities.
This, according to Finance Minister, Calle Schlettwein, is in recognition of the fact that no country can rely on other countries’ resources for its own development.
Furthermore, Nuyoma added that while GIPF is at a fairly advantageous position, as it still has room to manoeuvre. “We have to remain a step ahead to pre-empt any investment policy changes,” said Nuyoma.