WINDHOEK, (The Southern African Times) – Namibia plans to set up a sovereign wealth fund (SWF) before the end of the year to secure the country’s future savings and transform the economy, Finance Minister Iipumbu Shiimi said Monday evening.
According to Shiimi, the country will invest in equities as well as overseas shares.
“The investment return that you can get on shares and equities are much higher than from other money market instruments,” Shiimi said.
The SWF will have a short-term and a long-term fund.
“The objective for the (short-term) stabilization fund will be liquidity. The risks we take will be very low,” Shiimi said, adding that the underlying assets will be interest bearing assets, treasuries, bonds and similar money market investments.
According to him, the intergenerational wealth fund will have a balanced mandate where 70 percent of the assets bought are risky assets such as equities while the rest are fixed income assets, real estate and private equity.
Shiimi said about 2.5 percent of the intergenerational fund will be invested in infrastructure projects with socio-economic benefits for future generations.
Shiimi said the fund will be set up with financing from savings, proceeds from the green renewable sector, mining royalties, fishing quotas, divestiture of state-owned enterprises as well as Southern African Customs Union receipts.