Business - Windhoek Observer - Windhoek Observer

Urban land is cheaper in Keetmanshoop, followed by Rundu and Katima Mulilo, while it remains expensive in Windhoek and Swakopmund, the First Capital House Building Cost Index shows.

The index is derived from weighted prices of building materials and labour required to build a standard three bedroom house.

Since land is part of the required components in the house construction value chain, the report has also taken stock of urban land prices overtime.

Milner Siboleka, Assistant Portifolio Manager & Economist at First Capital Treasury Solutions, said on average it will cost N$14,300 in Keetmanshoop for land measuring 375 square meters, whereas the same land would cost N$115,500 in a middle-class location such as Khomasdal in Windhoek.

“Other than the mismatch between demand and supply of urban land, inefficiencies in land servicing as well as speculative motives among private developers equally contribute to high urban land prices. If land was serviced by local authorities who of recently have limited capacity due to financial constraints, the average prevailing cost of land could be reduced by at least 20 percent,” Siboleka said.

In terms of cost of building materials, he said the highest price is in Katima Mulilo (N$218,600) and Swakopmund (N$218,000) while Keetmanshoop, Rundu and Windhoek offers the cheapest building materials compared to other towns.

“The differences in building materials cost by town reflects varying prices due to supply sources that are largely unique to every town,” he said.

Overall, the index reached 114.2 in August compared to 109.7 index in August 2017, representing an increase of 4.1 percent in the cost of building a house.

The report said cement prices remained somewhat stable with a marginal increase of 3 percent in August.

“Prices are further expected to remain stable throughout the last quarter of 2018 leading to 2019 due to the combination of increased production capacity and slowing demand. With the entrant of Whale Rock cement, local production capacity more than doubled from 1 to 2.2 million tons of cement per annum, while domestic demand of cement has been gradually declining after peaking at 795,000 tons in 2015,” Siboleka said.

The price of super bricks increased by 3.5 percent in August compared to the same period last year.

Siboleka said the increase of brick prices is in line with the average price increase of cement, sand and transportation costs.

“With increasing competition among brick suppliers, it is expected prices will stabilise with the possibility of a marginal decrease. This is evident in towns like Windhoek and Keetmanshoop where some suppliers are now selling super bricks at N$1.90 per brick.”

Prices of sand increased by 5.3 and 6 percent for building and plastering sand respectively in August mainly influenced by extraction site landscape and transportation cost from the quarrying to the construction site.

Siboleka said the recent move towards regulating sand mining, could see environmental non-compliant suppliers closing down, thereby reducing competition in the market which could lead to high sand prices.

The prices of electrical building materials were 4.9 percent higher in August compared to a year ago, mainly as a result of a weak Namibia dollar compared to the US dollar.

Siboleka said the price of land serviced and sold by local authorities increased by 5 percent in August compared to the same period last year mainly because it was carried out by private developers unlike local authorities who receive government subsidies.

The fuel price increase announced this week is expected to push transport inflation higher into double-digit figures, which will ultimately contribute to rising inflation rates, the Economic Association of Namibia has said.

“Motorists need to explore ways to use transport equipment more efficiently in order to cushion against rising costs of transport,” the association said in a statement.

The Ministry of Mines and Energy (MME) announced a fuel price increase of 50 cents per litre with effect from Wednesday.

It said the increase was as a result of the depreciation of the Namibia dollar against the US dollar and rising global oil prices.

The increase means pump prices at Walvis Bay will be Unleaded Petrol (N$13,45), Diesel 500PPM (N$13,78) and Diesel 50PPM (N$13,83).

The Organization of the Petroleum Exporting Countries (OPEC) basket price averaged around US$83.28 a barrel this week.

Economic Association of Namibia said based on daily South African Reserve Bank exchange rates, the Namibia dollar weakened by 4.8 percent against the US dollar between August (monthly average of N$14.06 per US dollar) and September 2018 (monthly average of N$ 14.79 per US dollar).

In addition, monthly average oil prices in US dollar for Europe Brent oil increased by 7.8 percent to US$78.09 per barrel between August and 24 September 2018.

It is the highest monthly average oil price since November 2014 and 39.1 percent higher than a year ago, the association said.

The combined effect of currency depreciation and higher global oil prices resulted in the cost of oil in Namibia dollar increasing in September by 13 percent compared to August and by 56.6 percent compared to September 2017.

“While Namibians are facing the highest petrol and diesel prices so far, they are still below prices in South Africa. South Africans have to pay ZAR15.49 per litre at the coast and ZAR16.08 per litre in Gauteng for petrol,” the association said.

It said the main root causes of rising oil prices are the withdrawal of the USA from the Iran deal and the re-implementation of sanctions against the country as well as the turmoil in Venezuela that has resulted in a drop in oil production.

The Automobile Association (AA) of South Africa on Friday warned that fuel users are facing unprecedented price increases that it described as “catastrophic” for road users.

The AA noted that the major culprit is the country’s economic policy which has left South Africans defenceless against upticks in international oil prices.

Bank Windhoek sees huge appetite for energy projects funding

The slowdown in the property market has resulted in more companies seeking funding for renewable energy projects, Bank Windhoek Managing Director, Baronice Hans, disclosed in an interview this week.

Hans said there has been an increase in the frequency of renewable energy projects seeking funding compared to those of large scale property developments indicating that the use of renewable energy is gaining momentum in Namibia.

She attributed the slowdown in the property market mainly because of the new regulatory requirement of a 10 percent deposit for property funding.

Hans said another attraction for renewable projects was that most of them have NamPower as an uptaker.

“They are also guaranteed of a tariff with an inflationary increase,” she said.

Hans said most of the projects that Bank Windhoek has funded are joint ventures between local and foreign investors.

“We work with various international banks on these projects to make sure that we do a proper due diligence.”

Bank Windhoek is set to fund an additional five renewable energy projects in the coming few months.

“The projects we are looking at are very attractive and also very sustainable,” Hans said.

According to the 2018 Integrated Annual Report of the Capricorn Group, the mother company of Bank Windhoek, the bank through funding and technical assistance obtained from the Sustainable Use of Natural Resources and Energy (SUNREF) initiative, was able to connect financial institutions and clients to a number solar energy projects that will address some of Namibia’s long term challenges.

The projects include N$38 million for a solar plant at Aussenkehr, N$100 million for one at Trekkopje, close to Arandis, N$100 million for a wind farm at Namdeb Elizabeth Bay Diamond Mine, close to Luderitz and N$100 million for a solar plant at Okatope, close to Ondangwa.

Minister of Mines and Energy, Tom Alweendo, recently said Namibia must explore viable alternative sources of electricity generation.

In support of these objectives, the ministry in 2017 finalised both the National Energy Policy and Renewable Energy Policy.

“Government not only remains committed to supporting renewable energy technologies, but is intent to actively introduce and proliferate the use of these technologies to complement conventional energy sources,” Alweendo said.

Rising fuel prices eroding business competitiveness

The Namibia Chamber of Commerce and Industry (NCCI) say rising fuel prices are eroding the competitiveness of local businesses as they are adding to the cost of doing business in an already depressed economy.

According to the chamber, the transport industry has been the worst hit by fuel price increases.

This comes after the Ministry of Mines and Energy (MME) announced a fuel price increase of 50 cents per litre with effect from Wednesday last week, the third time it has done so this year.

The ministry attributed the increase to the depreciation of the Namibia dollar against the US dollar and rising global oil prices.

NCCI Acting CEO, Charity Mwiya, said in an interview that the fuel price hikes will be catastrophic as the slowdown in the local economy has already eroded consumers’ spending power.

“Companies that are focused on delivery and transportation are often heavily impacted by the fuel price increases,” Mwiya said.

“If they wish to save on fuel costs, they often must trim their geographic target service regions or find other ways to reduce costs in their existing service areas, by altering routes or driving practices.”

Mwiya said the NCCI was worried that rising fuel costs will have a negative impact on SMEs since most micro enterprises are dependent on hired transport to fetch items from wholesalers and manufacturers.

“They must make a series of decisions to sustain their business models as fuel costs impact their supply and overhead expenses.

“This reduces the competitiveness of the smaller businesses,” she said, adding that rising business costs will likely lead to further retrenchments.

“This is a worrying factor considering that the economy has already experienced a number of workforce retrenchments in various sectors over the past months, adding to the already high levels of unemployment.

“I have a case of a plumber who informed me that many potential customers refused to pay an increased service call charge of N$130, up from N$100, after his fuel costs rose by 20 percent over the past two years. Businesses must balance the need to meet the rising fuel costs with the risk of losing revenue,” she said.

Investment firm, IJG, recently said that the transport sector has been under pressure following consecutive months of fuel price hikes, with hikes this month being the latest.

Currency weakness observed in August coupled with the increase in the price of Brent Crude oil drove the increase in fuel prices, the firm observed.

“As long as these pressures and under-recoveries remain, we expect that the Ministry of Mines and Energy will continue hiking fuel pump prices,” IJG said.

Christo Viljoen, Head of Agri and Tourism at FNB Namibia, said small businesses and poorer households will bear the brunt as their transport costs account for a large portion of household expenditure.

He said sustained fuel price increases will further erode disposable income and cause financial stress.

“We might face a dim festive season if the current pace of fuel price increases is sustained in the two months ahead.”

The increase is also likely to affect the new planting season for summer crops.

“The higher crude oil price, which has now breached the US$80/barrel level, is a double whammy due to the direct influence on the fuel price and the indirect influence on oil derivatives such as fertilizer, pesticides and agrochemicals all of which are inputs in crop farming.”

Capricorn Capital ready to fund projects

Diversified financial services group, Capricorn, has launched Capricorn Capital, a corporate advisory firm with offices in Windhoek and Johannesburg.

Capricorn Capital provides strategic, corporate finance, capital raising and specialised finance advice to public and private companies, private equity firms, family offices, governmental and other bodies located in or wishing to invest in southern Africa.

The Windhoek Observer’s Chamwe Kaira (CK) asked Mark Durr (MD), Managing Director of Capricorn Capital on how the firm hopes to navigate the current tough business environment.

CK: How will the Namibian business community benefit from the services of the recently launched Capricorn Capital?

MD: Capricorn Capital is founded on three pillars: Corporate Finance, Capital Markets and Specialised Finance. Each pillar has its own areas of specialisation and, together, they provide the Namibian business community with a comprehensive suite of investment banking advisory services.

Our services empower business owners and executives to achieve the next level of their growth aspirations. Our services include, inter alia, assisting in the formulation of an acquisition or funding strategy and ultimately on origination of deals and getting these deals to closing.

We guide our clients through the entire process, be it a disposal, acquisition, capital raising or structured finance deal, from inception to closing.

We are skilled at originating deals, establishing the deal architecture, structuring, preparing the necessary valuations, assisting executives in negotiating the deals, navigating the regulatory requirements and commercial review of the legal agreements.

CK: Capricorn Capital comes at a time when both Namibia and South Africa are in a recession, how do you hope to succeed in this tough economic environment?

MD: Markets and economies always have and will forever move in cycles and there are great businesses that are founded during both the highs and during the lows which outlast cycles.

In addition, tough times often present great investment opportunities and can lead to increased merger opportunities. We’re building a great business with great people and great partners and we will proactively work with stakeholders to create and unlock opportunities, sometimes where opportunities are hard for others to see.

CK: Will Capricorn Capital fund projects or will the firm help the Capricorn Group/Bank Windhoek, Bank Gaborone/Cavmont identify projects for funding?

MD: In time, we may evolve the balance sheet side of Capricorn Capital’s advisory business to partner clients with either equity or acquisition finance.

We are content in the foundational phase to introduce opportunities for the banks within our broader group where it may make sense for them to participate, otherwise we will assist both clients seeking to raise capital and local and external sources of funds seeking local opportunities to invest in.

Despite the current economic environment, there are pockets of opportunity which we intend to facilitate, thus fulfilling one of our objectives of being a key driver of positive economic change in the region.

CK: The statement you issued last week said in addition to advising clients, Capricorn Capital will assist Capricorn Group to expand its operations in southern Africa. May you give more details on this?

MD: The Capricorn Group is a dynamic, forward looking business with a keen interest on acquisitive growth and we are constantly hunting for and evaluating opportunities for the group to benefit from potential value accretive deals across the region. Never waste a good recession; there’s always opportunity to position for growth when the cycle turns.

CK: What are some of the potential funding areas that are unexplored in Namibia, Botswana, Zambia and South Africa?

MD: We can assist both large, listed companies and smaller, unlisted companies (South Africa) N$300 million and (Namibia) N$100 million raise equity, debt and Mezzanine debt, thus increasing liquidity in the region. This is where potential clients should come and speak with us.

Still no oil find in Namibia …. As Chariot’s well comes out dry

Independent oil and gas company, Chariot Oil and Gas, has failed in its latest bid to find oil offshore Namibia, the company announced on Thursday.

The company drilled in its Central Blocks licence offshore Namibia in which it owns a 65 percent stake, Azinam (20 percent), NAMCOR (10 percent) and Ignitus (5 percent).

“The well has been safely drilled to a total measured depth of 4,165m to test the stacked targets in Prospect S. The well penetrated the anticipated turbidity reservoir sands, in line with the pre-drill prognosis, however the reservoirs were water-bearing,” the company said.

It said data collected will be used to calibrate the existing data sets to understand the implications of the well results on the prospectivity of the surrounding area.

The well, which was drilled by the Ocean Rig Poseidon drillship, will be plugged and abandoned.

“Whilst very disappointing that we have not established a hydrocarbon accumulation in the prospect, we have learnt valuable information about the reservoir potential of these turbidite systems which form the primary targets across many of the prospects within the Central Blocks portfolio. We will further evaluate the extensive data gathered in the well to understand the implications for the Central blocks portfolio,” said Chariot CEO, Larry Bottomley.

Last month, Tullow Oil also announced that its Cormorant-1 exploration well in the PEL-37 licence, offshore Namibia had encountered non-commercial hydrocarbons.

Tullow’s first exploration in Namibia cost US$30 million (N$420 million).

Tullow also has PEL 30, but its spokesperson, George Cazenove, refused to comment on which licence the company will focus on next.

The Cormorant-1 exploration well was drilled to a total depth of 3,855 metres and penetrated the objectives of the Cormorant prospect.

The drilling was also carried out by the Ocean Rig Poseidon drillship at a water depth of 548 metres.

Tullow operates the PEL-37 licence with 35 percent equity and is partnered with ONGC Videsh Ltd (30 percent), Pancontinental Oil & Gas (30 percent) and Paragon (5 percent).

Chariot Oil & Gas Limited spokesperson, Henry Lerwill, said last month that the gross cost of drilling the well was going to be between US$20 million and US$25 million.

Oil companies have invested N$25 billion drilling for oil offshore Namibia since 1990, the Namibia Petroleum Operators Association said in April.

The number of oil exploration licences issued by the Ministry of Mines and Energy has jumped from two in 2007 to 14 in 2018.

The Chamber of Mines of Namibia is set to present recommendations to Minister of Mines and Energy, Tom Alweendo,

which will contain guidance on long term solutions government can implement to boost the economy once all issues to do with water as an enabler are resolved, the chamber’s president, Zebra Kasete disclosed to the Windhoek Observer this week.

Mines are one of the biggest consumers’ water in Namibia.

“The Chamber’s position on water will be formally presented to Honourable Tom Alweendo, Minister of Mines and Energy at the Ministerial round table on November 28, 2018,” he said, but declined to give details on what is contained in the grouping’s recommendations.

Last week, during a meeting with finance minister, Calle Schlettwein, Kasete urged government to come up with long term resolutions to shortages of water.

The chamber contends that despite good remains in the past two seasons, water security remains a threat to mines, especially in the central part of Namibia.

The mine most at risk in the central area is Navachab ,which could be negatively impacted through reduced gold production, undermining the mine’s profitability and consequently the socio-economic contribution to the national economy.

Rossing Uranium was granted an Environmental Clearance Certificate in 2016 to construct its own desalination plant at a cost of N$200 million, which would alleviate pressure on the national utility, NamWater ,but government has dragged its feet on the issue of the required water permits.

Orano Resources Namibia is the only mine at the moment with its own desalination plant, which has a capacity of 20 million cubic meters of water per annum.

The plant, which also supply’s water to other mines and municipalities at the coast, was built to cater for Orano’s now mothballed Trekkopje operations.

Mines at the coast include Langer Heinrich Mine, Rössing Mine and the Husab Mine.

According to the Chamber of Namibia statistics, the total water consumption in Namibia is about 327 million cubic meters per annum of which the mining industry consumes about 9.13 percent.

Mines in southern Namibia use water from the Orange River, while those in the central regions ,whose total consumption is about 35 million cubic meters, rely on dams.

Kasete also disclosed that the chamber is seeking an audience with Schlettwein to discuss the impact the proposed tax changes will have on the industry.

“Regarding the proposed tax changes, we have shared a proposal with the Minister of Finance, Honourable Calle Schlettwein and awaiting confirmation to meet and discuss the subject further with him.”

Economist Rowland Brown warned of dire consequences to the Namibian economy if government goes ahead with its proposed tax changes announced recently by the finance minister in the Draft Income Tax Amendment Bill. The Bill among other things will scrap certain exemptions, introduce withholding tax on dividends paid to Namibian citizens, and reduce tax rates for low-income-earners.

The tourism sector’s contribution to GDP has again come under spotlight amid concerns that revenue generated through foreign agents was not being repatriated to Namibia.

They speculate that tourism’s contribution to GDP might increase from the current 15 percent if more bookings where done in Namibia.

These financial sector players conjectured that because of the existing practice, where some funds remained abroad for activities carried out in Namibia, the impact of the industry on the Namibian economy was not showing any growth.

Tourism operators, however, defended the practice, saying without foreign agents, most Namibian companies would be forced to open offices in Europe or close down completely causing even a greater drop in tourism’s contribution to the GDP. Hosting and staffing overseas offices is an extremely expensive venture and is not viable.

Executive Officer of the Hospitality of Namibia, Gitta Paetzold told the Windhoek Observer that without European agents, local operators would find it difficult to attract tourists from Europe.

“Each Namibian booking and travel agent would need an office and pay tax in Europe. It will be expensive – it is not practical,” she said, admitting that a portion of the money generated from tourism bookings stays abroad to pay for the travel services provided by overseas agents sending clients to Namibia.

Jofie Lamprecht, who promotes hunting safaris, told the Windhoek Observer that it is the industry standard that a lot of booking agents are used to try to gather in as many paying clients as possible. In order to market the product, pay for ads, services, fees and other expenses, a portion of the money paid for the trip to Namibia remains abroad to cover those costs.

“The overseas agents market the trip packages, sell the product to potential tourists, receive the funds from the clients who chose to come to Namibia, hold the funds, take their commissions and then they transfer the invoiced amount to the Namibian operator. As I said, this is common practice,” he said.

Lamprecht argued that with the increase in the number of tourists to Namibia, its contribution to GDP should positively increase.

“The spending power of tourists will be a big factor here. A tourist on a self-drive safari who will be camping, will spend a lot less than a client that stays in lodges and charters private planes. One has to look at the market sectors that are increasing to establish why its contribution to the GDP is not increasing.”

Talking from a hunting point, Lamprecht said to ensure funds are received in Namibia, exported trophies must be cross-checked with what is invoiced and paid for by professional hunters.

According to Lamprecht, Namibia is the leading hunting destination in Africa. However, some airlines have stopped carrying hunting trophies as part of a misguided international campaign to stop all trophy hunting.

“The airlines that have stopped the export of trophies are just narrow minded, uninformed about the benefits of controlled, regulated professional hunting and against the Namibian constitution that enshrines the “sustainable use of Namibia’s natural resources. However, about 25,000 trophies are still being exported annually.”

Talking about the current state of the tourism industry, Paetzold said although it is high season at the moment, tourist numbers are down by about 10 percent this year compared to last year due to various factors including Namibia becoming more expensive as a tourist destination compared to some of its neighbours.

“Prices in Namibia go up every year,” she said.

Paetzold said other factors which may humper growth going forward include the recent spate of attacks on tourists and the bad state of some of the roads leading to World Heritage Sites in the Kunene Region.

Paetzold, however, expressed happiness that the government plans to spend N$95 million to upgrade the Hosea Kutako International Airport.

“This is the first point of entry for tourists arriving by air, we cannot allow it to be closed and downgraded.”

Lamprecht said that the issues surrounding safety and standards at Hosea Kutako airport must be stabilized. The country (and thus, potential tourism) gets worldwide negative publicity when questions about the viability and safety of the main international airport arise.

“These issues need to be sorted out. It is a negative image that is broadcast to the entire world.”

He said attacks on tourists have a similar effect as the airport situation. “Negative reports on our country damage our reputation as a destination and these attacks need to be stopped.”

Minister of Environment and Tourism, Pohamba Shifeta last month said attacks on tourists will reduce the number of visitors, which will eventually affect the sector’s contribution to the Gross Domestic Product (GDP).

According to the 2017 Bank of Namibia Annual Report, the growth of the tourism sector, which is measured by activity under hotels and restaurants, generally slowed in 2017, as reflected in the lower growth of room and bed nights sold, in spite of rising international arrivals.

The Bank of Namibia said the sector’s growth rate is estimated to have slowed to 3.5 percent in 2017, compared to 5.9 percent in 2016.

Namibia has dropped one place on the Global Competitiveness Report with a ranking of 100 out of 140 countries.

The report said Namibia is the 6th most competitive economy in Sub-Saharan Africa behind Mauritius (49), South Africa (67), Seychelles (74), Botswana (90) and Kenya (93).

Except for Seychelles that moved up 10 places compared to 2017, other countries lost ground in competitiveness: South Africa (-5), Botswana (-5), Namibia (-1).

There are no results for Mauritius and Kenya for 2017.

Namibia ranked best in the pillar ‘labour market’ (39), followed ‘financial system’ (47) and ‘institutions’ (51).

The country is lagging behind in terms of ‘business dynamics’ and ‘market size’ (both 121), health (117) and ‘ICT adoption’ (105).

Namibia’s good ranking in the ‘labour market’ pillar is supported by the labour tax rate (rank 8), redundancy costs (rank 29) and workers’ rights (rank 32), while insurance premiums as percent of GDP (rank 13) and non-performing loans (rank 19), and support the positive ranking of the country’s financial system.

Namibia performed well in the pillar ‘institutions’ regarding the efficiency of the legal framework and press freedom (both rank 24), budget transparency and judicial independence (both rank 27) as well as property rights (rank 31), while the homicide rate (rank 128), e-participation (116) and quality of land administration (110) , are dragging the ranking down.

Namibia ranked low in terms of life expectancy (rank 116), time to start a business (135), quality of research institutions (111), insolvency regulatory framework (110), as well as in indicators related to internet uses (between 101 and 103).

The GCI is based on 12 pillars: Institutions, Infrastructure, ICT adoption, Macro-economic stability, Health, Skills, Product markets, Labour market, financial system, Market size, Business dynamics and Innovation capacity, which are similar to the previous sub-pillars under the three main pillars.

Namibia is the ninth most competitive countries on the African continent, since three North African countries are ranked better: Tunisia (87), Algeria (92) and Egypt (94).

Commenting on the report, Klaus Schade, research associate - Economic Association of Namibia said although Namibia improved her scores, while better ranked countries such as South Africa and Botswana lost some ground, and slipped only one place compared to other African countries that ended up much lower, more efforts are needed to turn around the loss of competitiveness and catch up with other countries on the continent.

“Despite the launch of the NamBizOne portal and the establishment of the Business and Intellectual Property Authority (BIPA), business registration remains cumbersome and time consuming.

New technologies are hardly applied and business persons have to drop hard copies of application and registration forms still at various institutions instead of emailing soft copies including proof of payment to a one-window institution,” said Schade.

He said more also needs to be done to improve ICT skills and access to fast ICT services in the country that are vital for businesses to compete on a regional and global scale and to attract domestic and foreign direct investment.

“New technologies, such as renewable energy sources, provide an opportunity to accelerate access to electricity and hence to ICT services, which will open new business opportunities. Private investment into these sectors should therefore receive much stronger support, which would in turn reduce the reliance on public funds,” he said.

Schade said some of Namibia’s weaknesses are relatively low hanging fruits that could be turned around in a short period of time. He said this includes hiring of foreign labour, while others in the area of health and education in particular need longer-term and implementable strategies.

Namibia will add an additional 220MW to its power grid in three years’ time, if plans announced by the Minister of Mines and Energy, Tom Alweendo last week come to fruition.

The additional 220MW planned to be installed in the next three years, is meant to ensure that NDP5 targets and other national targets are reached.

“This capacity is exclusive of any embedded generation or roof-top installation done by REDs, private companies and individuals,” said Alweendo.

He said the 220 MW allocation will be split with 150 MW allocated to NamPower and 70 MW allocated on a competitive bidding process as per current government procurement laws, to IPPs for implementation.

The technology split for 70 MW is 20 MW Solar in 2020 and 50 MW Wind in 2022, he said.

The tenders for the projects are expected to be conducted before the end of the year, to ensure the plants are commissioned on schedule, Alweendo said.
In 2017, only 41 percent of energy demand was generated locally, the 59 percent shortfall was sourced from outside, according to statistics provided by Alweendo.

He said Namibia needs to invest in its own generation capacity in case imports from the Southern African Power Pool (SAPP) become restricted.

Statistics provided by Alweendo last week showed that 19 Independent Power Producers (IPPs) have signed Power Purchase Agreements (PPAs) with NamPower to supply 175.5 MW of renewable energy generation projects by 2020.

The energy ministry has also developed a National Integrated Resource Plan (NIRP). This is a 20-year development plan for Namibia's Electricity Supply Industry (ESI), spanning the period 2016 to 2035. It provides projections of the future electricity demand and identifies a mix of least-cost electricity generation options to meet the country's electricity needs in a reliable and efficient manner.

Namibia's maximum demand stood at 652 MW last month. The country has a total installed electrical generation capacity of 557MW. Although the installed capacity is 557MW, the available capacity is 467MW due to aging Van Eck power station which is capable of only delivering 30MW from the installed capacity of
120MW.

He said six solar PV IPP power plants are currently under construction and will be commissioned by December 2018, adding an additional capacity of 72 MW.

He added that a second wind power plant will start construction soon and is expected to be commissioned by 2020, adding a further 44 MW of renewable energy capacity.

“In total about 183MW of generation capacity will be added by IPPs by 2020. This illustrates the increasing role of IPPs in Namibia's electricity mix, and is testimony of the growing involvement of private sector entities in a steadily changing electricity supply industry,” the minister said.

IJG Namibia said in its 2018 Economic outlook that energy demands are forecast to reach 930MW in 2025 before escalating to 1,330MW by 2035.

“These forecasts signify a possible perpetual reliance Namibia will have on imports if effective steps are not taken to grow domestic supply,” the firm said.

The government’s external debt is expected to surge in the third quarter of this year due to further currency depreciation and another disbursement of the African Development Bank loan agreement,

Head of Research at PSG Namibia, Eloise du Plessis said in a report this week.

“The increase in debt servicing costs crowds out government expenditure on economic development. The government is not expected to tap Eurobond markets anytime soon and has adopted a fiscal tightening stance to curb the deterioration of the public debt-to-GDP ratio,” she said.

Finance Minister Calle Schlettwein will give an update of the government’s fiscal policy targets during the Mid-year Budget Review in the final week of October.

Latest Bank of Namibia statistics showed the central government’s debt increased in the second quarter of this year by 5.8 percent compared to N$78.3 billion in the first quarter.

The central bank said the increase was due to a rise in domestic borrowing to fund public expenditure and higher foreign debt stemming from the depreciation of the Namibian dollar.

Total domestic debt went up by 2.8 percent to N$50 billion owing to higher issuance of Treasury bills and Internal Registered Stock (IRS).

In turn, the country’s external debt rose by 11 percent to N$28.3 billion owing to the depreciation of the local currency against major trading currencies.

The Namibian dollar fell from N$11.86 per US dollar at the end of the first quarter of 2018 to N$13.77 per US dollar at the end of the second quarter.

“Looking at a breakdown of the government’s foreign debt, Eurobond debt (60.5 percent) remained the major contributor to the government’s external debt stock, while the share of multilateral loans declined slightly to 18.4 percent in the second quarter from 19.8 percent in the first quarter.

Furthermore, the share of bilateral loans (10.9 percent) and JSE listed bonds (10.2 percent) remained largely unchanged in the second quarter compared to previous quarter. Nearly 61 percent of government’s total outstanding foreign debt is denominated in US dollars, while roughly 22 percent is denominated in the rand.

Finance minister, Calle Schlettwein has admitted that manufacturing incentives, which government offered as part of its Vision 2030, flopped.Finance minister, Calle Schlettwein has admitted that manufacturing incentives, which government offered as part of its Vision 2030, flopped.

He last week said that 12 years before 2030, by which Namibia was envisaged to become an industrialised country, manufacturing has averaged at 11.7 percent not much different from 11.1 percent at the introduction of the manufacturing incentive regime in 1995.
“This is especially so because the growth in manufacturing over the past years has largely been driven by mineral beneficiation. The overly generous incentive regime has an associated tax expenditure outlay of about N$305 million. This is to be seen against the tax capacity of the beneficiary sector, for which the effective tax rate, once all exemptions, deductions and losses are carried forward are considered, amount to an effective rate of about five percent,” he said.
Schlettwein said government has now proposed graduating the net loss regime into a Special Economic Zone and cease perpetuating net economic loses.
“If the policy intervention does not contribute to the net economic gains, but only perpetual net losses, it does not make economic sense to continue with the same,” he said.
Namibia remains a destination for basic consumer goods and staple food, which according to Schlettwein, account for over 11 percent of the total import bill or N$10 billion annually.
“If a substantial lot could be produced, processed and sourced locally, this would imply large local flows.”
He said government has now introduced special designed facilities and these include the SME Financing Facility under the new approved SME Financing Strategy, comprising the Venture Capital Fund, Credit Guarantee Scheme, which will include training and mentorship.
“A youth skill based lending facility is also being set up to serve youth entrepreneurs. Cabinet has approved for the establishment of a Provident Fund at DBN,” she said.
Schlettwein said a targeted public investment stimulus through AfDB funding to the tune of N$2 billion will be made available for SME funding.
According to the 2017 Annual National Accounts, the manufacturing sector is estimated to have recorded a slow growth of 1.3 percent in real value added for 2017 compared to a strong growth of 5.6 percent recorded in 2016.
Meat processing registered a decline in real value added of 14.4 percent, other food products declined by 4.6 percent.
Textile and wearing apparel recorded a decline of 3.2 percent during the period under review.

As the Namibia Stock Exchange (NSX) moves to lure more companies to list deepening investment options available, the bourse says the June decision by the Ministry of Fisheries and Marine Resources to exclude listed companies from applying for fishing quotas hampers its growth drive. As the Namibia Stock Exchange (NSX) moves to lure more companies to list deepening investment options available, the bourse says the June decision by the Ministry of Fisheries and Marine Resources to exclude listed companies from applying for fishing quotas hampers its growth drive.

Minister of Fisheries and Marine Resources, Bernard Esau, in June 2018 told Parliament that fishing companies listed on the stock market will not qualify for fishing rights going forward, since the fishing rights were exclusively meant for Namibians, and it is difficult to monitor listed companies because share ownership changes constantly.
The move would have affected listed Bidvest Namibia’s Bidfish, whose unit previously consisted of Namsov Fishing Enterprises, Trachurus Fishing, United Fishing Enterprise, Twafika, Telelestai and Pesca Fresca. However, the company opted to dispose of its entire fishing business by selling it to Tunacor Fisheries Limited.
Bidvest Namibia, through its wholly owned subsidiary Bidfish, indirectly owned 69.55 percent of Namsov Fishing Enterprises, which is the holding company of Bidfish’s primary fishing operations, which had been receiving sufficient levels of fishing quotas since 1997.
Erongo Marine Enterprises, a unit of the Oceana Group, refused comment on the government decision.
NSX Chief Executive Officer, Tiaan Bazuin said the policy decision was not made from an informed point of view.
“I think it is discriminatory and misses the point about what a listed company is. Any business form’s shareholding can change from time to time, listed companies make it easier and fully transparent as to who owns what, when,” he said.
Bazuin who has led the exchange since 2012, maintains the platform has a role to play when it comes to contributing towards government efforts to increase local participation and ownership in companies under the New Equitable Economic Empowerment Framework, but warned such a move could have a negative impact on the listed company share price.
“There should not be restrictions on who buys and sells. There is nothing to protect local investors from. If the foreign buyer wants to buy at a higher price than a local buyer then he should, as he may tomorrow want to sell again and then a local may want to buy. That’s what the exchange is there for – to create and regulate a market. What we can do is give preferential access in initial public offerings to locals first as has been done in the last IPOs such as Letshego and Bank Windhoek,” he said.
“If the rules of the game are clear we can make sure we create a solution, such as a restricted trading market (where only a certain portion of people may trade, as seen in BEE restricted markets) for locals only.”
He, however, warned that these types of solutions may keep the price lower than if everyone is able to trade freely.
On whether the current listing requirements of the NSX are a hindrance to indigenous business persons also trying to raise capital, he said, “Our requirements are quite low if compared to more mature markets, so I believe they are fairly easy to reach.
“The international requirements such as proper corporate governance and IFRS externally audited financial statements cannot be lowered as any investor needs these to be in place as a minimum.”
Bazuin said to cater for small to medium cap companies to list, the NSX had set up the Development Capital Board.
“We already set up the Development Capital Board with lower entry requirements. However as most of our local investors are institutions such as pension funds, they are mostly prohibited by their investment mandates to take higher risk investments into these types of businesses,” he said.
Bazuin said the passing of the Financial Institutions Markets Bill (FIM BILL) in Parliament, which seeks to consolidate and harmonise the laws regulating financial institutions and financial markets in Namibia, will allow for the setting up of a Central Securities Depository in the country, while companies continue to show interest on possible listings.
“For the CSD, we require the FIM Bill to be enacted and that appears to be well on track. On listings, we don’t predict, but certainly there is a renewed interest in listing since there is somewhat more regulatory certainty this year,” he said, although mum on whether it has engaged the Bank of Namibia (BoN) over its calls for local banks to list.
In June, BoN Governor Iipumbu Shiimi, advised foreign owned commercial banks to float shares on the NSX in order to meet local empowerment requirements.

Pension money awash, but little investments

Namibia still offers low viable investment opportunities for pension funds despite recent regulatory changes which demand that more of their funds be invested locally.

Pension funds will be required to reach the 45 percent threshold of investing their assets locally by April next year.

According to Government Gazette 132 issued in August, 40 percent of assets must have been invested locally by 31 August, 42.5 percent must be invested in Namibia by 30 November and 45 percent of the assets must be invested in Namibia by 31 March 2019.

The new regulations also require that 3.5 percent of the money be invested in unlisted companies.

Partner of Investments at Eos Capital, Ekkehard Friedrich, told the Windhoek Observer in an interview on Tuesday that although local asset requirements will oblige the pension fund industry to bring 45 percent of contractual savings and invest locally there is very limited opportunities to invest on the thinly traded Namibia Stock Exchange.

He said pension funds will find it difficult to invest 3.5 percent of their assets because they fluctuate all the time.

“It is very difficult for pension funds to maintain that limit because assets move down or up; you can’t take money out and put money in. One solution is that the limit on investments be increased to 10 percent so that you have more room to play with.”

He said lifting the investment limit will help pension funds find investments with suitable returns.

“Unless you find suitable ways to invest that money, the money will just sit in bank accounts and government bonds, with limited returns for the pensioner. Ultimately the pensioner will have to pay the price of not getting suitable returns. That is why we are saying lets lift the requirements and have some ways of meaningfully investing these funds.”

Pension fund assets as a percentage of GDP in Namibia are well above the global average, with pension fund assets close to 90 percent of annual GDP at N$290 billion, according to figures presented by Eos Capital this week.

This is more than double the assets held in the banking sector, estimated at N$120 billion.

CEO of Southern African Venture Capital and Private Capital Fund, Tanya van Lill, who spoke at an investment seminar organised by Eos Capital said pension funds are now faced with the challenge of investing 45 percent of their assets in Namibia ,where there are limited options to choose from.

“Many are already over-exposed to government bonds and there are only a handful of stocks to buy on the NSX. Thus, pension funds are bringing money back and placing it in banks and money market. This does not provide the most attractive returns for funds and does not provide the benefit for the economy that was intended,” she said.

Van Lill said one option for pension funds would be to invest in unlisted infrastructure funds which provide attractive returns over a long-term, typically around 15 years, mostly in the form of inflation-linked income as well as some capital gain over the long-term.

She said infrastructure assets provide returns of about 15 percent per annum, with these returns decreasing or increasing depending on the inflation rate.

Controversial additional mining conditions scrapped

Mines and Energy Minister, Tom Alweendo, has scrapped the controversial additional conditions on exploration mining licences that had threatened Namibia’s position as one of Africa’s top mining investment destination.

The additional conditions were introduced by Alweendo’s predecessor, Obeth Kandjoze, in 2015 as a way of increasing local participation in mining projects.

Alweendo wrote to the Chamber of Mines of Namibia last week informing its members that he had listened to their concerns and decided to scrape the conditions.

According to the scrapped conditions, the management structure of a mining entity should consist of a minimum 20 percent representation of historically disadvantaged Namibians and that at least 5 percent of the company shall be owned by Namibian persons or by a company wholly owned by Namibians.

Chamber Vice President, Hilifa Mbako, told the Windhoek Observer that the decision to scrap the additional conditions “was the most important fundamental decision for future investment into Namibia”.

“The minister has listened to the industry. The additional conditions were going to bring a lot of unintended consequences. Namibia will benefit from this decision.”

Mbako said the additional conditions and the uncertainties created by the New Equitable Economic Empowerment Framework (NEEEF) had badly affected investor confidence in Namibia.

Talk in the mining industry is that uranium company, Bannermann Resources, failed to meet conditions for a mining licence because of the additional conditions.

The chamber said in a statement that it was excited that all Additional Conditions pertaining to exploration licences had been dropped.

“The conditions posed serious challenges to exploration companies, but are plausible at mining licence stage. The final resolution to this long-outstanding matter is most welcome by the industry as it removes one of the main barriers to investment in exploration,” the chamber said.

It said the positive development should see further investment into exploration projects.

“Moreover, we are optimistic that this move will help improve Namibia’s attractiveness as a mining jurisdiction and investor sentiment.”

Results of the 2017 Fraser Institute Survey revealed that Namibia continues to deteriorate from its once prestigious position in 2014 as the most sought after mining investment destination in Africa.

The 2017 report highlighted that Namibia was ranked 6th in Africa in terms of its Investment Attractiveness Index.

Chamber CEO, Veston Malango, said in the 2017 Chamber of Mines Annual Report that the introduction of additional conditions to licences in 2015 had remained by far the biggest regulatory challenge faced by the industry since then.

“It is the elephant in the room and has not added any value to the original objective of poverty eradication through job creation and empowerment, especially for Exclusive Prospecting Licences (EPLs).”

The chamber has repeatedly affirmed that additional conditions were doable at mining licence application level, but impractical for EPLs.

“To place a condition for BEE empowerment to be concluded before an EPL can be granted is unrealistic and flies in the face of government policy to make Namibia an attractive investment destination for mining and exploration.”

The Southern African Development Community Centre for Renewable Energy and Energy Efficiency (SACREEE) was launched in Windhoek on Wednesday by the Minister of Mines and Energy, Tom Alweendo.

The centre was established with technical assistance of the United Nations Industrial Development Organisation and the financial assistance of the Austrian Development Agency.

Alweendo said SACREEE supports SADC’s industrialisation programme known as “Promoting Infrastructure Development and Youth Empowerment for Sustainable Development”.

In 2015, SADC ministers responsible for energy affairs approved the establishment of a SADC Subsidiary organisation to coordinate renewable energy and energy efficiency issues in the region and Namibia agreed to host the regional body.

“The establishment of SACREEE comes at an opportune time in the region where there are diminishing electricity generation capacities,” Alweendo said.

He said over-reliance on fossil fuels which are finite and traditional biomass has been the status quo for many of the SADC countries.

“Nuclear energy, despite its limited greenhouse effects is also not a viable solution for the region due to high capital costs and the waste disposal, which has to be carefully handled.”

The minister added that over-reliance on big dams also has its own problems due to the consistent drought and flooding that is affecting the generation of power in the region.

“The SADC’s renewable energy resources are huge and underutilised. I believe therefore that the establishment of SACREEE will unlock this potential by providing business focussed guidance on the regional market opportunities and risks,” he said.

Alweendo said Namibia has taken big strides in the growth of the renewable energy industry and the involvement of Independent Power Producers (IPPs) which has led to 18 IPPs signing Power Purchase Agreements (PPAs) with NamPower to supply 170 MW of renewable energy generation projects by 2020.

As at September 2018, 11 renewable energy power plants had been commissioned, contributing 55 MW to the country’s electricity supply.

John Titus, Director of Energy at the Ministry of Mines and Energy, said the SACREEE Secretariat will be governed by a board of directors comprised of all the SADC Member States, represented at director of energy level and the main donor to SACREEE.

“It is envisaged that the SACREEE Secretariat will actively maintain links and pursue projects in the member States through nominated National Focal Institutions (NFIs),” Titus said.

SACREEE is expected to formulate a number of programmes and projects.

“These programmes and projects will be implemented in collaboration with partners, including the International Renewable Energy Agency (IRENA), the European Union (EU), Swedish International Cooperation and Development Agency (Sida) and the National Renewable Energy Agency (NREL). More projects are in the pipeline with other partners,” he said.

Titus said the centre has embarked on developing its Business Plan for 2019 to 2023.

“The sustainable energy field is not static hence; the Business Plan will no doubt be flexible and very dynamic to the dictates of the environment. Obviously, the Business Plan will need to develop best means and ways to address the plight of low access to clean and affordable energy, the issue of low participation of women in the energy sectors, information and knowledge management and contribution to SADC’s development agenda. We therefore request you to contribute by way of ideas to our Business Plan,” Titus said.

Managing Director of the Austrian Development Agency, Martin Ledolter, said over 50 percent of SADC’s population still has no access to electricity.

“Fortunately, there is huge untapped potential for renewable energies in the SADC Region and our efforts are especially important in those countries where the offer of sustainable energy services is still low and where we face an overdependence on fossil fuels and traditional biomass energy forms,” he said.

Eos Capital, a local private equity fund manager, has partnered with international firm, Phoenix Infrastructure, to set up the Investment Development and Investment Company (IDICON), which will finance infrastructure projects in Namibia.

The fund will have a funding capacity of up to N$1.5 billion.

Although expected to be launched in January next year, Ekkehard Friedrich, Partner of Investments at Eos Capital told the Windhoek Observer that the fund was still looking for more partners and is targeting to raise funds both locally and abroad.

The fund will focus on supporting infrastructure projects in the public services, energy, water, education and healthcare.

Friedrich said the infrastructure investments to be targeted will be sizable in nature and have a multiplier effect on the economy.

“We hope to launch early next year, we have one substantial investor and we are looking for other investors,” Friedrich said.

He said Eos will fund what he termed ‘hard and soft infrastructure.’

Hard infrastructure includes water supply projects.

“There is a lot to be done in this country in terms of water.” Eos is also planning to fund electricity generation projects, logistics and transport projects.

Soft infrastructure projects include partnering municipalities, in education and health care.

Nicole Maske, Partner: Value Add at Eos Capital said IDICON will fund projects of between N$100 million and N$500 million.

Currently, Eos manages the N$460 million Allegrow Fund.

Investments today include stakes in Elso Holdings, Fabupharm, Welwitchia Private School, Panel to Panel and Heat Exchange Products and Namibia Aqua Mechanica.

CEO of Southern African Venture Capital and Private Capital Fund, Tanya van Lill, who spoke at a seminar organised by Eos said the advantage of investing in an infrastructure fund is that pension funds can contribute to the growth of the Namibian economy with their investments.

“It has been shown that infrastructure investment has a multiplier effect on the economy, with the World Bank estimating that every 10 percent increase in infrastructure provision increases GDP by approximately one percent in the long term.

“Infrastructure such as hospitals and schools provide additional social benefits for citizens and pensioners alike, which have better access to the healthcare and schooling for their children,” she said.

Capricorn bets on Botswana and Zambian operations

Capricorn Group Financial Officer, Jaco Esterhuyse, believes that the company’s operations in Botswana and Zambia are primed for growth in the near future.

Bank Gaborone, a Capricorn unit, posted very solid results for the period ending 30 June 2018 by contributing 6 percent to the group’s profit after tax, compared to a 4 percent contribution in 2017.

The Zambia unit, Cavmont Bank, made a loss, resulting in management changes. The group is confident that the new team will help transform its fortunes in Zambia.

Capricorn currently gets 95 percent of its profit from its Namibian operations, with the group’s profit after tax increasing to N$934 million in 2018 compared to N$918 million in 2017, according to a 2018 Integrated Report.

Capricorn Group MD, Thinus Prinsloo, also believes that the Zambian operation has growth potential, especially with a population of around 2.5 million that is unbanked and operating on cash.

Prinsloo said rising copper prices are giving hope that the Zambian economy will recover thereby raising prospects for Covmont Bank, Capricorn’s subsidiary in Zambia.

In terms of Botswana, Esterhuyse said President Mokgweetsi Masisi appears to be business-minded and has lifted investment sentiments in that country.

Esterhuyse also expects Entrepo Holdings, in which Capricorn recently acquired a 55.5 percent stake, to contribute about 10-15 percent to the group’s profit in 2019.

Entrepo is a financial service entity focused on providing micro-lending, life insurance and credit protection products.

Prinsloo said the company was proud of the opportunity it presented the Namibian public to acquire shares and participate in the ownership of the group when it listed in 2013.

“We remain committed being connectors of positive change and creating opportunities for all our stakeholders to enjoy the benefits of the shared value we can generate,” Prinsloo said in the report.

Country Club pays N$6 million in dividends

The once loss-making Windhoek Country Club Resort and Casino has continued with its profit making trajectory by declaring a N$6 million dividend to government this week.

The 2017/18 financial year dividend handover ceremony was attended by Minister of Environment and Tourim, Pohamba Shifeta, and Minister of Public Enterprises, Leon Jooste.

Sven Thieme, Chairman of the Board of Directors of the Country Club, expressed his satisfaction with the achievement of the hotel over the past financial year.

“As we all know, the economy has been facing tough times for the past two years and this has also had an impact on certain aspects of our business. Tourism, however, remains robust and in 2017 we were able to maintain the high performance and good results attained in the previous year.”

Thieme said he was delighted with the results achieved at the Windhoek Country Club Resort and Casino. “Once again, the team at WCCR can stand proud and I, for one, am excited about the achievements.”

“Highlights of the past year include the completion of the hotel refurbishment, the output of our own solar energy plant - saving money and electricity, and the many happy guests and conference attendees which frequented our hotel.

“It is worth mentioning, that the refurbishments were fully paid out of the WCCR’s own cash reserves and that, by itself, is a great accomplishment. We are grateful and excited to be able to pay dividends to government, thereby proving once again that the WCCR is a success story,” Thieme said.

Tony Boucher, General Manager of the WCCR said the last financial year proved to be a challenging one with focus on maintaining cost containment measures and implementing new, innovative ways of generating additional income streams.

“The hotel successfully improved occupancy, average rate, turnover and profitability despite the inclement economic conditions. Casino operations remain a focal point for the foreseeable future as a result of the ever-increasing pressure on the consumer’s disposable income levels,” Boucher said.

GIPF to breach N$46 billion in local investments ….says still pursuing MTC deal

The Government Institutions Pension Fund (GIPF) is set to repatriate about N$8 billion back to Namibia from foreign jurisdictions by the end of March next year as the country’s biggest pension fund moves to meet new regulatory requirements that pension funds should invest 45 percent of their assets locally by April next year.

Fund CEO, David Nuyoma, told the Windhoek Observer in an interview that by March next year, the fund would have in total invested about N$46 billion locally.

“We need to move and we are looking together with our specialist advisors how best to invest this money as well as comply with the regulations,” Nuyoma said.

Last week, Partner of Investments at Eos Capital, Ekkehard Friedrich, told the Windhoek Observer that although local asset requirements will oblige the pension fund industry to bring 45 percent of contractual savings locally, there are very limited opportunities to invest on the thinly traded Namibian Stock Exchange.

CEO of Southern African Venture Capital and Private Capital Fund, Tanya van Lill, also echoed the same sentiments.

Despite the limited investment options, Nuyoma said GIPF was committed to investing more money locally while avoiding potential bad investments in the process.

“We literally own everything on the Namibian Stock Exchange already. Without us, they won’t be a stock exchange,” he said.

GIPF’s last major investment was in March last year when it acquired a 25 percent stake in Capricorn Investment Group Limited, the mother company of Bank Windhoek, for N$2 billion.

Nuyoma added that the fund still has interest to buy shares in MTC, the biggest mobile carrier in Namibia and widely seen as an attractive investment proposition.

“We remain interested in investing in MTC. We are excited about it up to now. Once they get their house in order, we will look at it.”

In March this year, GIPF announced interest in buying shares in MTC saying that a potential investment in the company would fulfil the local investment requirements.

With limited options on the stock exchange, Nuyoma said the fund was also looking at investing in infrastructure projects.

“We want to venture into infrastructure. We see this as a viable proposition and an attractive one. We see the German Development Bank, KfW, China Development Bank and the Development Bank of Southern Africa playing in our space, in terms of long-term investments.

“These long-term investments could be suitable for pension funds and that is why we are saying, we can also play in that space. This process also gives us greater presence in the country in a meaningful way.”

He said the fund was looking at investing in infrastructure projects that yields income like port operations, energy and water.

“As a matter of fact, we have invested in renewable energy on a small scale through a 10 MW renewable project at Gobabis. We want to have more of this kind of investment.”

Nuyoma further said GIPF has written to the Minister of Finance requesting that he lifts the 3.5 percent threshold on unlisted investments so that the fund is able to invest more in local companies.

“The 3.5 percent limit won’t cater for us because we are almost at the brim. If we were to invest N$5 billion on infrastructure projects on the market, we would need that 3.5 percent to be breached. We have requested for permission from the regulator (Namibia Financial Institutions Supervisory Authority) and the Minister of Finance to raise this limit.”

At the height of government’s cash flow problems, two years ago, the GIPF was asked to swap some of its foreign assets and invest N$8 billion with the Bank of Namibia to boast the country’s reserves, an arrangement that Nuyoma says still stands.

“We are still at the same level that we were last year, which was N$8 billion. We can swap more assets, but it depends on Bank of Namibia, if they have appetite for it. The beauty of that facility is our yields will remain the same like in a foreign justification and Bank of Namibia is a good institution in terms of rating. It is one of the most secure transactions that one can engage in.”

Keetmanshoop has cheapest land prices

Fuel prices to push inflation to double digits

Bank Windhoek sees huge appetite for energy projects funding

Rising fuel prices eroding business competitiveness

Capricorn Capital ready to fund projects

Still no oil find in Namibia …. As Chariot’s well comes out dry

Mining industry to present water proposals to Alweendo

Tourism revenue practices under spotlight

Namibia drops one place on competitiveness ranking

Energy ministry plans 220MW of additional power

External debt expected to surge in third quarter

Manufacturing incentives flop

Govt policy impacts NSX drive

Pension money awash, but little investments

Controversial additional mining conditions scrapped

Namibia to host SADC renewable centre

Eos targets N$1.5 billion fund

Capricorn bets on Botswana and Zambian operations

Country Club pays N$6 million in dividends

GIPF to breach N$46 billion in local investments ….says still pursuing MTC deal