Select Page

Lifting asset quotas will boost local infrastructure investment – Eos Capital

Lifting asset quotas will boost local infrastructure investment – Eos Capital

Joining a growing chorus of concerned voices, the Executive Chairman of Eos Capital, Mr Johannes !Gawaxab on Tuesday told an investors conference that Namibia’s anticipated allocation from the Southern African Customs Union may be in peril, following the downgrade of the South African sovereign rating.

Amplifying his argument, !Gawaxab said the projected growth for the South African economy for this year was 1.2% before Finance Minister Gordhan was fired. Since that event, the official growth forecast has been reduced to only 0.8% which implies an underperformance of the SACU revenue pool, which in turn, may result in a smaller allocation to Namibia.

On the Namibian fiscal situation, !Gawaxab said “The Namibian Government recently re-prioritised its capital expenditure due to fiscal constraints and the fiscal situation isn’t expected to improve in the short term” alluding to the perceived role of private investors to step in with private equity funding and infrastructure funding.

Quoting Bank of Namibia figures, he said the gap in Namibia for infrastructure finance has grown from N$150 billion in 2014 to close to N$225 billion this year. “Alternative sources of funding of infrastructure have become critical as never before” he added.

Explaining the critical need for infrastructure finance, !Gawaxab said “Infrastructure boosts economic productivity, helps create jobs, improves trade flows and improves the overall competitiveness of countries.”

Driving home the point of using a country’s long-term institutional savings to finance development, he said “Infrastructure investments appeal as investments beyond generating good rental for the use of our savings capital but also deliver a geared economic return from essential sectors such as water, energy, transport and education. Ultimately infrastructure investments improve the capacity of the economy and citizenry to be productive.”

“Studies have shown that poor road, rail and port facilities add between 30% and 40% to the costs of goods traded among African countries. Investment in infrastructure is key in unlocking the growth potential that will attract new investors” he said.

“The time has arrived for us to consider alternative infrastructure funding mechanisms to boost economic growth in Namibia. The GIPF, one of the biggest pension funds in the country, has announced their intention for more focused investing into infrastructure. I want to appeal to other pension funds and long-term insurance players to consider private equity and infrastructure as a requirement for a diversified portfolio” he added.

On the asset quotas set for investment managers by the Namibia Financial Institutions Supervisory Authority, he suggested that fund mandates must be liberalised to allow greater investment in specific asset categories saying “Our non-banking financial services regulators should also come to the table to accelerate infrastructure investing by pension funds and long-term insurers by re-visiting the current limits given the liquidity and fiscal challenges experienced by the country.”

The conference was also addressed by the Chief Executive of Eos Capital, Mrs Nicole Maske, the Chief Executive of Phoenix InfraWorks in South Africa, Mr Andrew Johnstone and the Chief Executive of the South African Public Investment Corporation, the SA government’s mega asset manager with R1.9 trillion in assets under management.

About The Author

Daniel Steinmann

Educated at the University of Pretoria: BA (hons), BD. Postgraduate degrees in Philosophy and Divinity. Publisher and Editor of the Namibia Economist since February 1991. Daniel Steinmann has steered the Economist as editor for the past 32 years. The Economist started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at It is the first Namibian newspaper to go fully digital. He is an authority on macro-economics having established a sound record of budget analysis, strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored hundreds of journalism students as interns and as young professional journalists. From time to time he helps economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. Since October 2021, he conducts a weekly talkshow on Radio Energy, again for a lay audience. On 04 September 2022, he was ordained as a Minister of the Dutch Reformed Church of Africa (NHKA). Send comments or enquiries to [email protected]

Rain Rate >UTC + 2 hrs = Namibian Time<