GIPF considers increasing local investments to stimulate economy

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Edgar Brandt

WINDHOEK – During the last nine months, the Government Institutions Pension Fund (GIPF) has made 25 investments in the domestic economy, which in total is worth about N$485 million. Now, CEO of the fund, David Nuyoma, has expressed interest in increasing the local investments as well as fully delving into infrastructure investment to provide much-needed stimulation of the local economy.

During an exclusive interview with New Era this week, Nuyoma noted that while the Ministry of Finance has increased the domestic asset requirement from 35 percent to 45 percent, GIPF is already at 43 percent. “We can still go higher with our domestic assets but we need to be mindful of our diversification objectives,” said Nuyoma.
Today, GIPF’s assets under management has grown to about N$113 billion as at the end of April 2018 and the Fund is by far the most significant player in terms of Namibia’s Gross Domestic Product (GDP).

“There is no question that GIPF is a major investor in the domestic economy. In fact, to date, GIPF has committed N$5.48 billion into the local economy through its unlisted investment programme. This confidence in the Namibian economy has greatly impacted the development of the local unlisted market, particularly in the areas of property, private equity, debt and infrastructure. GIPF is also working on actively participating in infrastructure financing that can yield economic returns. For this purpose, we recently appointed six investment managers because we believe there is huge potential in infrastructure. However, while we are cognisant of the fact that infrastructure development is imperative to economic growth, we have to do our due diligence and we have to pursue infrastructure investment correctly,” Nuyoma told New Era.

In terms of diversification, GIPF invested globally. Currently the fund invests 43 percent of its assets in Namibia, 25 percent in South Africa, 26 percent internationally (outside Africa) and six percent on the African continent. In terms of asset allocation, the Fund invested in bonds, cash, equity and property. These classes are further broken down into different risk portfolios.

“Even with property, we look at every aspect in a different light. One aspect remains clear and that is our returns must beat inflation at all times. Unlisted investments make up a tiny bit of GIPF in the sense that it is regulated. The maximum unlisted investments the fund can be exposed to is 3.5 percent while the minimum is 1.7 percent. We are however looking to increase this figure,” said Nuyoma.

Regarding the possible investment into MTC, Nuyoma said investigating acquiring shares in the mobile communications giant is an ongoing exercise being discussed between all stakeholders. “We expect to make an announcement on this issue in due course. It will be a wise decision to investigate all options. Overall, there are also some other exciting projects that GIPF is investigating,” he added.

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