Infrastructure Fund to be operational by the end of October

In order to give effect to economic growth dimension, the Ministry of Finance have engaged with the public and private sector to establish an Infrastructure Fund at the Development Bank of Namibia which will be ring-fenced for funding current and future priority economic infrastructure.

According to the Minister Calle Schlettwein, the Fund will be operational by the end of October this year and it will draw capitalization from the domestic financial and capital markets, with amortization provided for under the budget over time as a measure to embed sustainability and fiscal transparency.

Schlettwein added that this intervention has latitude of complementarity with the infrastructure financing through the African Development Bank and Private Public Partnership infrastructure financing arrangements.

Namibia currently has an estimated N$255 backlog on infrastructure development and was ranked 11th on the infrastructure development index released by the Africa Development Bank in May 2016.

“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,” Schlettwein said at a press briefing on Wednesday.

Furthermore he said that the drag on the economy comes from the contractions in the construction sector as it adjusts to the bust period in both public and private investment, the wholesale trade and retail sector due to subdued consumer demand and resource stock related pressures in the fisheries sector.

“To conclude, we see the pace of economic activity improving. The extent of the estimated contraction for Quarter 1 has been revised and the direction of change point to improving activity rate going forward. No doubt, timely implementation of a package of policy reforms is critical to reinvigorate potential growth,” the minister concluded.