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Home / Domestic asset requirements increase to 40 percent
Domestic asset requirements increase to 40 percent
2017-09-29Staff Report 2 Edgar Brandt Windhoek-Namibia has to increasingly mobilise domestic resources to finance its national development agenda. As such, said Minister of Finance, Calle Schlettwein, given the investment opportunities that have emerged on the domestic investor space, the policy to raise the domestic asset requirement threshold is now due for implementation with the gazetting of amendments to domestic resources requirement expected in the first week of October. These amendments, which will apply to financial institutions like banks, insurance companies and pension funds, will lift the domestic asset requirements from the current 35 percent to 40 percent by January 2018, 42.5 percent by April 2018 and 45 percent by October 2018. These policy changes are expected to release substantial savings into the domestic economy for listed and unlisted opportunities. This, said Schlettwein, is in recognition of the fact that no country can rely on other countries’ resources for its own development. During an update on the economy on Wednesday, Schlettwein pointed out that when the international community adopted the Addis Action Agenda as a means of financing the Sustainable Development Goals, strong emphasis was laid on domestic resource mobilisation, as a sustainable means of financing national development objectives. “As fiscal policy has assumed a consolidation phase, it is material that the implementation of structural policy forms and alternative means of financing are pursued and implemented timely. The interventions to create an enabling environment for investment is one such intervention, but we are also pursuing means of financing through public, private partnership (PPP), bridging the information gaps on the implementation of the Public Procurement Act through targeted training for stakeholders,” Schlettwein explained. In addition, to promote economic growth, government has engaged the public and private sector to establish an Infrastructure Fund at the Development Bank of Namibia, which will be ring-fenced for funding current and future priority economic infrastructure. The fund, which is expected to be operational by the end of October, will draw capitalisation from the domestic financial and capital markets, with amortisation provided for under the budget over time, as a measure to embed sustainability and fiscal transparency. “This intervention has latitude of complementarity with the Infrastructure financing through the African Development Bank and PPP infrastructure financing arrangements. These measures will be a good shot in the arm for the construction sector, which is now bottoming out of the severe effects of the steep consolidation phase,” stated Schlettwein. Regarding the state of the economy, Schlettwein said there is reasonable optimism that economic activity and outlook for this year is better than a year ago, for which the activity rate stood at 1.1 percent. The Ministry of Finance now anticipates growth to be in the range of 1.8 and 2.3 percent for 2017. “While we see the green shoots budding on the economic landscape, it is material that domestic economic and fiscal policy reforms are increasingly leveraged to help lift the activity rate,” Schlettwein concluded. 2017-09-29Staff Report 2
