Infrastructure Fund will be ring-fenced for priority projects

Windhoek-Government has engaged the public and private sectors to establish an Infrastructure Fund at the Development Bank of Namibia to be operational by the end of this month. The Fund will be ring-fenced for financing current and future priority economic infrastructure projects.

Ring-fencing funds means setting aside money for a specific purpose.

The Fund will be operational by the end of October this year and it will draw capitalisation from the domestic financial and capital markets, with amortisation provided for under the budget over time as a measure to embed sustainability and fiscal transparency. This intervention has latitude of complementarity with the infrastructure financing through the African Development Bank and PPP (public-private-partnership) infrastructure financing arrangements. These measures will be a good shot in the arm for the construction sector, which is now bottoming out of the severe effects of the steep consolidation phase, said Finance Minister, Calle Schlettwein.

During a media briefing in the capital last week, Schlettwein noted that the Infrastructure Fund forms part of specific policies to be tabled in the Mid-Year Budget Review to support the economy and to address macro-fiscal risks.

According to the Namibia Statistics Agency (NSA), the construction sector recorded a decline in real value added of 26.5 percent in 2016 compared to a robust growth of 26 percent in 2015. The real value for construction works by government slowed to 5.6 percent in 2016 from a growth of 31 percent recorded in 2015.

Other policies aimed to support the economy and address macro-fiscal risks, include carrying through with the fiscal consolidation policy to achieve the expressed objective of stabilising growth in public debt and eventually reducing the debt level. In addition, the policies are meant to increasingly mobilise domestic resources to finance the national development agenda.

Source: New Era Newspaper Namibia