Join the party GIPF

08 August 2013
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The announcement by the Government Institutions Pension Fund this week that it has committed N$2.3 billion to its unlisted investments portfolio seems like welcome news.

What the GIPF has done appears fully consistent with the Government’s intention to ensure that our financial institutions invest more of their funds in the local economy rather than export their capital outside the country.

Recently appointed GIPF CEO David Nuyoma has a good track record when it comes sound judgement that he has accumulated over many years in the investment field.

He first served at the Namibia Development Corporation (NDC) and then the Development Fund of Namibia that later evolved into the Development Bank of Namibia (DBN).

We should therefore give him the benefit of the doubt when it comes to the new unlisted investments the GIPF has made.

His admission that the GIPF faced a “myriad of challenges associated with this alternative asset class” no doubt contains an element of measured and deliberate understatement.

The debacle of the GIPF’s previous foray into the minefield of unlisted investments remains fresh in most people’s memory, especially in the minds of public servants and other employees of public institutions.

Their pensions took a major bath through bum investments in all sorts of dodgy companies.

They and the rest of the country certainly hope we will see better results, and above all better investment returns this time around.

The new GIPF unlisted investments cover a broad range of sectors including support to SMEs through procurement financing and for SMEs involved in renewable energy.

It has also made provision for venture capital funding to start-ups such as MobiPay.

Other areas include healthcare through Ongwediva Medipark, and a wide variety of infrastructure projects through the Omignam Expanded Infrastructure Fund.

The largest chunk however, seems to have gone into property investment.

The few mild criticisms one might have about the GIPF’s unlisted investments relate to the emphasis and perhaps the question of transparency.

One cannot help feeling that a disproportionate amount of the funds has gone to property investments that might just help to fuel the fires of an already overheated property market.

Some might question the economic value and developmental benefits of more shopping malls and office complexes such as Gwashamba, Grove Mall, Otjiwarongo Town Square and Ballot Street.

The shopping malls will only end up housing more of the ubiquitous South African retailers like Shoprite, Pep Stores and Jet Stores that blight the landscape of this country and only help to ship our hard-earned dollars to South Africa.

The GIPF, of course, does not have a development mandate but exists primarily to maximise returns for its members and ensure they have good pensions in their golden years of retirement.

However, one would think the GIPF could do more to help its members with the immediate crises they face while at the same time ensuring the soundness of their pensions.

The immediate problem public servants face is that they need affordable housing right now – not tomorrow, next month or next year but right now today.

Nuyoma mentioned that the GIPF invested N$4.9 million in the First Capital Real Estate Finance Fund, which has a mandate to provide mortgage loans to both GIPF and non-GIPF members.

That seems a pittance given the magnitude of the housing crisis.

With its massive financial resources, the GIPF sits in an enviable position as far as the positive contribution it could make towards helping to solve the huge backlog the country faces in low and middle-income housing. With all the talk about public-private partnership to help solve the national emergency the country faces with regard to housing, one finds it surprising that the GIPF seems hesitant or even reluctant to join the party.

The GIPF could play a pivotal part by helping to finance the servicing of residential land, which could help speed up housing delivery. As far as transparency goes, we think it would go a long way towards reassuring public servants and Namibians at large if the GIPF disclosed the names and faces of the principals behind some of the companies it has invested in.

Who are Kongalend Renewable Energy Fund, Konigstein Capital, Preferred Investment and Tunga Real Estate?

The GIPS itself is a public institution and we therefore think that public servants as well as everyone else has a right to know.

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The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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