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GIPF will be able to meet obligations despite COVID-19: Nikanor

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GIPF Acting Chief Executive Officer, Desmond Nikanor has given his reassurance that no matter how long the COVID-19 pandemic lasts or the impact it has on the market, GIPF will still be able to meet its maturing obligations. In a […]

GIPF Acting Chief Executive Officer, Desmond Nikanor has given his reassurance that no matter how long the COVID-19 pandemic lasts or the impact it has on the market, GIPF will still be able to meet its maturing obligations.

In a recent interview with Nampa, Nikanor said the Government Institutions Pension Fund has long-term investments that allow them to withstand market shocks such as the one brought on by COVID-19.

GIPF’s recent financial report stated that the fund’s investments dropped from N.dollars 117.5 billion in April 2019 to N.dollars 108.5 billion by March 2020. The report said this was due to instabilities being experienced on regional and international stock markets mainly due to the impact of COVID-19.

“I can assure that people’s investments are safe, the fund is healthy. Because we plan long-term, we are set up in a way that our diverse investments allow the fund to withstand incidental drops in the market without affecting our ability to meet our obligations. In simpler terms, I am saying we have many diverse and long-term investments that have proven with time that we can withstand things like a dip in the market,” Nikanor said.

He explained that the loss in investment that they recorded during the 2019/20 financial year was not physical money that was lost, but was a decline in the fund’s asset value due to a dip in the global stock market which has since recovered.

Nikanor said the unrealised loss happened when the market shrank in the first three months of the year due to the panic caused by the COVID-19 pandemic and the further shutdown of business that was imposed by most countries in March.

He said GIPF made significant gains since March 2020 which brought the fund’s asset base to N.dollars 125.4 billion as of November 2020.

Economist Mally Likukela said although the loss directly impacts GIPF clients who expect their investment to grow, N.dollars 9 billion is not significant to an institution like GIPF which has huge investment portfolios.

“But if the pandemic persists and the market continues to shrink, that would be a concern because it will eat into their investments as well as their technical reserves which are supposed to cover short-term shortfalls,” he said.

By the end of March, the fund had 101 764 active members, 39 504 active pensioners, and 22 190 inactive pensioners. They also had more than 42 unlisted investments in different companies.

Source: Namibia Press Agency

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