Namibia: Depreciation of Rand Hits GIPF

The chairman of the 's board of trustees Mihe Gaomab II says the catastrophic depreciation of the rand has affected the fund's annual returns, and thus its asset value.

Gaomab II said this in his remarks during the annual stakeholders consultative meeting held in Windhoek yesterday.

He said as at the end of March 2016, the fund's assets were valued at N$ 93,3 billion, recording an annual return of 5,45% against the benchmark of 6,26%.

"Surely, the fund had nowhere to hide as the political situation in SA caused the rand to catastrophically depreciate against major currencies," Gaomab II said.

He further stated that economic conditions remained fragile internationally, with the perpetual migration crisis in Europe, while the slowdown in China's growth compounded this problem.

Despite this economic volatility, the GIPF takes pride in the fact that the fund's assets remain more than the liabilities, even after adjustments are made for actuarial reserves.

Gaomab was happy to report that the fund has made considerable progress in the of priority sectors, such as housing and infrastructural development through its special purpose vehicles (SPV).

"The GIPF has responded to the call by the nation to find a solution to the housing plight currently haunting our people," he said, adding that in this context, the fund had made a combined allocation of N$1,35 billion, of which N$750 million has so far been allocated to housing financing, while a balance of N$600 million has been used for developing and construction, land servicing and bulk municipal services.

He added that the board is assessing the possible further expansion of the housing portfolio, in line with the Harambee Prosperity Plan (HPP).

The GIPF's efforts to develop the local economy continue, and the fund believes that private equity has big potential in transforming local communities from being job-seekers to being entrepreneurs and business owners.

The fund's CEO David Nuyoma said the GIPF had extensively invested in housing solutions for civil servants and to date, three of its investments have mandates to service land as well as get involved in housing developments and mortgage financing.

Source: The Namibian