By Mathias Haufiku

WINDHOEK – Debate on the much-awaited Bill that would allow people to construct or buy houses in communal areas with money borrowed from their pension funds kicked off this Tuesday in the National Assembly, with huge support from MPs. 

But some of the concerns of parliamentarians are that the loans still carry interest and that the laws regulating pension funds are too strict on the usage of funds by members. 

The Bill proposes that the money borrowed from the pension fund be used only “to erect a dwelling on a portion of land” for which the person borrowing money has the Customary Land Right or Right of Leasehold in terms of the Communal Land Reform Act, 2002 or any other applicable legislations, and that such dwelling is occupied or would be occupied by the pension fund member or dependant of the pension fund member.  

The Pension Funds Amendment Bill on borrowing from the pension fund to construct houses in communal areas has been much awaited, especially by members of the Government Institutions Pension Fund (GIPF). Two months ago GIPF rolled out the granting of home loans to its members at cheaper rates and better consideration than commercial banks. 

“The proposed amendments will allow pension funds to allow their members to access a part of their benefits to acquire or upgrade their homes in communal areas,” said Minister of Finance Saara Kuugongelwa-Amadhila in the National Assembly when seeking approval from fellow law makers on the Bill that would authorise pension funds to grant loans and provide guarantees to members for the acquisition of houses in communal areas.

The parliamentarians warned that interest rates charged on the loans should not exceed that of commercial banks.

The Bill to amend the Pension Funds Act, 1956, was prompted by the fact that the country is faced with an acute shortage of houses, high cost of housing as well as restricted access to finance for home acquisition in communal areas.

Minister of Fisheries and Marine Resources, Bernard Esau, said, if amended, the Pension Fund Act would empower members of the public because they would be able to access their pension funds to acquire property in order to address their basic needs.

“This amendment should be applicable to all pension funds, whether it is public or private. For me pension funds are savings, therefore if we unlock the savings we can address the issue of unemployment and poverty,” Esau said.

Rally for Democracy and Progress MP, Jesaja Nyamu, was concerned about the taxing of pension money saying the loans should be interest free because “pension fund members are simply withdrawing their own money instead of borrowing”.

“Currently the money in GIPF is ‘bad money’ because it is not being used by the people, we need to respond to the reality on the ground by giving people full access to their money. When you give me my money why do you want to punish me? You give me a portion of my money then you still want to ask for interest,” Nyamu said.

“Through this amendment you create interest in the minds of people to develop the areas where they hail from and as a result money will go into the areas which it is currently not getting into,” said Nudo MP, Arnold Tjihuiko.

Meanwhile, another MP, Isak Katali, said the terms and conditions of the pension fund must be the same or better than those of commercial banks. “The ideal situation is that the scheme must be better than the current situation, we need clarity on this,” said Katali, a former schoolteacher.