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.”