The Trade Union Congress of Namibia (TUCNA) has strongly come out in opposition to the Government Institutions Pension Fund (GIPF)’s new housing loan initiative, describing it a “ruthless, insensitive and self-centred”.
At a media briefing in the capital yesterday, the umbrella union said the scheme betrays the spirit of social justice.
Speaking at the briefing, TUCNA secretary general Mahongora Kavihuha slammed the GIPF housing plan, arguing it prioritises corporate profit over the well-being of Namibian workers, whose pensions make up the fund.
“Pension funds are the workers’ money. It should be one of the few instruments we can use to address inequality and drive inclusive development. Instead, what we see is a move that undermines the principle of equitable wealth distribution,” he said.
At the briefing, TUCNA questioned GIPF’s decision to channel the new housing loan scheme through only two pre-selected financial service providers, namely First Capital Housing Schemes and Kuleni Financial Services.
Kavihuha said this exclusive partnership raises serious questions about fairness, transparency and accountability.
“By concentrating this powerful instrument of wealth redistribution in the hands of just two entities, GIPF is entrenching the very system that keeps wealth in the hands of a few whiles, leaving the majority of workers behind,” he stated.
He added that such a strategy not only sidelines other potential players in the housing and financial sectors but also risks creating monopolistic practices that drive up costs for workers seeking affordable housing solutions.
“This is a classic case of profit being prioritised over people. GIPF must be reminded that its primary mandate is to serve the interests of the pension fund’s contributors, not to enrich a select few companies,” said Kavihuha.
In a statement issued by GIPF last month, the fund stated it is ready to implement a much-anticipated and fund-initiated pension-backed home loan scheme (PBHLS) following a public announcement by the finance minister Ericah Shafudah.
Meanwhile, GIPF has been proactively seized with this matter since 2016 when the board of trustees initially approved a proposal to amend its rules to allow for the pension-backed home loan scheme. In 2018, the rule amendment was approved by the Office of the Prime Minister.
The regulator, the Namibia Financial Institutions Supervisory Authority (Namfisa), paved the way for the establishment of the scheme in 2021.
“Active fund members are hereby informed and advised that the fund has identified First Capital Housing Scheme and Kuleni Financial Services as the two agents that will administer the home loan scheme. The two service providers will only be onboarded once all the necessary agreements have been signed,” the statement reads. Shafudah announced the approval in Parliament, noting that the scheme is the result of a joint effort by the finance ministry, the Namfisa and the GIPF with support from the Office of the Prime Minister.
“I stand before this August House to brief honourable members that the government, through the ministry of finance and in collaboration with Namfisa and GIPF, has endorsed and is implementing the PBHLS. This process is underwritten by the Office of the Prime Minister,” she said.
The facility is available to eligible GIPF members in both proclaimed and unproclaimed areas and may be used to purchase residential land or property, build or renovate homes, settle existing mortgages or improve basic living conditions.
Shafudah said the scheme is made possible by amendments to the Pension Funds Act 24 of 1956, which now permits pension funds to issue housing-related loans.
The interest rate on these loans is to be set at the Bank of Namibia’s repo rate plus 2.5% in a bid to maintain affordability.
-pmukokobi@nepc.com.na