Bill to Unlock Pension Funds to Buy Land, Rural Houses

THE Minister of Finance, Saara Kuugongelwa-Amadhila, has tabled a bill to amend the Pension Funds Act of 1956 to enable members to access their money for buying houses.

Kuugongelwa-Amadhila said the bill will seek to provide guarantees to members when they want to use some of their contribution to buy houses in communal areas or upgrade their homes in communal areas. The amendment will also allow for pension funds benefits to be used to access private bank loans for home acquisition.

She said this was a move to address the acute shortage of houses, especially for the poorer segments of the population because of high housing costs and restrictive access to finances.

Kuugongelwa-Amadhila added that in spite of their efforts, a significant number of Namibians are unable to access loans to buy homes because they live in communal areas where due to the current land tenure system, they face even greater challenges.

“I must emphasise, however, that this facility is providing guarantees for loans that must be repaid by members. Failure by members to repay their loans will result in the cancellation of their pension benefits,” she explained.

Many lawmakers supported the bill with the Minister of Defence, Nahas Angula, saying it is a very innovative product that has the potential of meeting two important goals – rural development and the ownership of fixed assets for people in communal areas.

“It’s important to have a shelter. Permanent dwelling improves sanitation and it is also likely to be electrified, so they can live in a good place,” Angula said.

Minister of Mines and Energy Isak Katali and the Minister of Fisheries and Marine Resources, Bernard Esau, also supported the bill.

Last year, the Government Institutions Pension Fund (GIPF) trustees amended the fund’s rules to pave the way for its members’ housing scheme. The amendment allows the GIPF to grant loans and to provide guarantees to loans.

Source : The Namibian