Maihapa Ndjavera

WINDHOEK – Kenneth Matomola, the chief executive officer (CEO) of the Namibia Financial Institutions Supervisory Authority (Namfisa), revealed yesterday that 40% of contractual savings are invested in the local economy with the remaining 60% exported to foreign markets, including the rest of Africa and the Common Monetary Area (CMA), which links South Africa, Namibia, Lesotho and Eswatini into a monetary union allied to the Southern African Customs Union (SACU).
Matomola noted this during a briefing on Pension Fund Regulations, specifically regulations 13 to 40. At the event he confirmed that Namibia’s contractual savings have been invested in different regions such as locally, in CMA, in the rest of Africa (excluding the CMA) and internationally.
Quarter three for 2019 show that besides the 40% invested locally, 24.5% went to the, 5.1 to the rest of Africa (excluding CMA) and 30.5% internationally.
Matomola added that since the first National Development Plan (NDP1) mid-term review, Namibia has had four additional national development plans and is currently implementing the fifth NDP. He stated that critical lessons learned from previous national development plans include inadequate investments and positive growth rates that do not translate into adequate employment creation opportunities.
He further outlined the importance of the financial markets in stimulating the local economy. “Namibia’s development goals on unemployment since NDP1 indicates that actual growth in employment has mainly been below the NDP targets. High unemployment remains a national concern, and the creation of employment opportunities is a national priority. Hence, it has now become imperative to foster the stimulation of economic growth, thus institutional investors, such as pension funds, should be encouraged to contribute to this national priority. The policymakers made deliberate efforts to accelerate the achievement of the national goals by encouraging the channeling of contractual savings into domestic investments (equity and debt instruments) to curb the outflow of funds, and to stimulate the real sector of the Namibian economy” said the CEO.
Matomola added that Namfisa looks forward to fostering an enabling regulatory environment that facilitates financial markets deepening and development. This, he said, is in collaboration with the Namibia Financial Sector Strategy (NFSS), which is aimed at financial markets deepening, safety nets, financial inclusion, localisation and skills development in the financial sector. The Financial Institutions and Markets Bill (FIM Bill), which aims to be a flexible, potent and responsive piece of legislation, which was drafted and currently under consideration in Parliament, will further promote this objective.
According to Matomola the envisaged regulatory regime would harmonise and increase collaboration among regulators to improve the quality of regulations and make them cost-effective, compatible with economic growth objectives, job creation, and competitiveness. This, he said, would result in the continuous improvement of prudential and market conduct standards regarding the pension fund regulations.
In Namibia pension fund savings are invested as prescribed by Regulation 13 of Pension Fund Regulations as prescribed by the Pension Funds Act (Act No. 24 of 1956).
Pension funds can be invested in different assets such as credit balances, Government bonds, State-owned enterprises, local authority and regional council bonds, corporate bonds, foreign bonds, property, shares, unlisted investments, as well as other claims and assets.