Pandeni Mwandingi Kapia
The Covid-19 pandemic has affected every country and economies in the world, the pandemic is without a doubt the single biggest event in world history since World War II. As a direct consequence of the outbreak, organisations all over the world have to change how they operate in order to achieve their goals and the Environmental Investment Fund of Namibia is no exception.
The core mandate of the fund is to mobilise adequate resources in support of projects and programmes that promotes sustainable utilisation of natural resources and to procure funds for the maintenance of an endowment that will generate a permanent stream of income. These funds are invested towards the protection and wise management of the environment, sustainable use of natural resources for economic development, and conserving biological diversity and ecological life-support functions.
Although the fund expects to receive its annual funding from the government, the impact of Covid-19 has put a strain on the already limited resources nationally. The fund budget is made up of four income streams, 60% of the budget is from the environmental taxes, government contribution 10%, 25% donor funding (management fee of projects), 5% loan portfolio. How then does the fund ensure that the income stream is maintained? It is difficult to assess whether the Covid-19 outbreak will continue for a prolonged period. Cash is king: the critical element during any time of uncertainty is to ensure that the organisation’s liquidity position can be maintained and buy time to recover. The unexpected crisis raises questions around the fund’s existing risk management frameworks in terms of their effectiveness and agility. Four main risk categories have been materially impacted under the crisis and have direct implications for funds’ capital management, namely, operational risk, liquidity risk, market risk and credit risk.
The fund’s management has devised a strategy to counter and mitigate the aforementioned risks. The emerging risk profiles have been integrated into the existing risk management committee of the fund. The committee monitors the level of impact on the business, periodically and as needed and report to the board on the status of key performance indicators for critical business units. This includes reviewing the pace of expenditure in relation to the business’s operations; re-prioritising the allocation of resources to unaffected business lines or areas; maintaining regular contact with debtors – as they are critical to cash flow and are likely to be facing the same challenges; developing a six months cash flow forecast to identify stress points, and where changes are required; identifying measures for controlling budgets and making cost savings and exploring opportunities for collaboration with new strategic business partners for new market development and to meet customer needs.
Without a doubt, Covid-19 has changed the world and going forward the fund cannot proceed operating as usual. An adaptive management approach that is flexible is being pursued by the Fund coupled with an upgrade in our work environment with regards to health and safety issues. Likewise, the Fund has to adopt new ways of interacting with its stakeholders and generally improve the pace of its operations. Furthermore, this pandemic has highlighted the importance of having a secured revenue stream and the fund is working towards being 100% self-sustaining. The pandemic has also proven the importance of incorporating the latest ICT technology. Covid-19 has shown mankind how interconnected we are to each other, therefore taking care of ourselves is indirectly taking care of the next man. As the fund navigates its way from the deadly Covid-19 storm, it’s all hands on deck.
Do your part, stay alert, control the virus, save lives. Together we can beat Covid-19.