The Government Institutions Pension Fund (GIPF) has painted a rosy picture of one of Namibia’s post-independence financial scandals, saying it made a profit of N$146 million from its infamous and now defunct Development Capital Portfolio (DCP),
which ran from 1996 to 2006.
The DCP has been a subject of investigation by the police and regulatory bodies for a decade now, after GIPF wrote off over N$600 million in bad investments.
But speaking during a recent media engagement, GIPF’s Manager of Unlisted Investments, Sara Mezui-Engo, said the fund made a profit of N$146 million out of the DCP, with only N$70 million lost.
“One can write off losses on some investments and realise profits and increase in value from others,” Mezui-Engo said, adding that the fund’s success stories include the Windhoek Country Club investment and shares in FNB Namibia.
She said while there were companies that did not return a single cent, others did to varying degrees.
“When we aggregate the ones that returned capital and take into account the businesses that increased in value, we see that our gains are more than our losses,” Mezui-Engo added.
The DCP granted loans to Namibia Grape Company, Namibia Plastic and Liquid Foods Project, Windhoek Country Club, Swakopmund Station Hotel and Namibia Pig Farm. Other beneficiaries were, Omaheke, Tsongang Investments Company, Sepiolite Investment, Omna Investments and Multitime Investment (Pty) Limited.
Conville Britz, GIPF’s General Manager of Investments, said the country’s biggest pension fund is now responsible for the management of its N$104 billion asset base.
GIPF assets amount to about 64 percent of Namibia’s GDP.
Unlisted
Following the disastrous DCP, GIPF came up with another programme, the Unlisted Investment Programme, in 2011 and committed N$2,1 billion in investment funds.
GIPF has since signed another programme with 25 asset managers, committing N$12 billion to be invested in projects by companies that are not listed on the Namibian Stock Exchange.
The investments are in the areas of procurement debt funding, property, lending to solar energy projects, private equity, venture capital, infrastructure funding and housing.
Cash cow
Figures released by GIPF, showed the extent that it eased Government’s liquidity crisis in 2015 and 2016. At the height of the crisis, the Government found itself short of cash and the country’s foreign reserves dipped to an all-time low.
The Ministry of Finance then requested pension funds to move their investments from South Africa and invest them in Namibia.
GIPF swapped N$3, 04 billion from South Africa in November 2015, and invested the money with the Bank of Namibia.
The second swap took place in October 2016 when the fund brought back N$4,88 billion worth of assets from South Africa and invested them with the central bank.
The Bank of Namibia has previously said that the investments will earn yields at the same rate like in South Africa.
In another development, GIPF has formed a new treasury department, which has so far invested N$8,9 billion in bonds and N$2,3 billion in money markets.
