Bank of Namibia governor Johannes !Gawaxab stated that Namibia’s Welwitschia Sovereign Wealth Fund’s current balance has reached N$453 million. The Welwitschia Fund, which was launched in May 2022, commenced with an initial capital investment of around N$262 million.
The governor made these remarks last week during the repo rate announcement in Windhoek.
The Sovereign Wealth Fund originated as part of the government’s effort to position Namibia to take advantage of anticipated economic tailwinds that could potentially propel the country towards renewed growth and opportunity.
The fund was established with two objectives in mind, namely saving for future generations, and fiscal and official reserve stabilisation.
It is intended as a repository of the investment of a portion of defined proceeds from the present utilisation of natural resources and returns from divestiture in State assets. For the second objective, the fund aims to provide insulation to and stabilisation of the economy, the national budget and the country’s stock of international reserves against excess volatility in commodity prices and shocks emanating from fiscal accounts and the balance of payments.
When the fund was launched, late president Hage Geingob said a sovereign wealth fund can be a potent tool in achieving economic growth. Similarly, the fund can act as an important fallback and stabiliser during times of extreme economic shocks.
During the launch, Geingob affirmed there will be operational independence in the fund to ensure it serves its purpose. “Ownership of the fund is vested in the Namibian government, while the Bank of Namibia will be the fund’s primary custodian, responsible for its administrative function.”
The funding sources for the Sovereign Wealth Fund, he stated, comprise a combination of streams, including a portion of royalties collected from the sales of natural, renewable and non-renewable mineral resources, taxes, divestiture from public investment holdings as well as contributions from identified State-owned enterprises and other parties.