Select Page

There is an ocean between investment expectations and the government’s development agenda

There is an ocean between investment expectations and the government’s development agenda

The large gaps between the government’s development goals, what the law allows it, and what the private sector expects, surfaced unavoidably earlier this week at an all-encompassing infrastructure conference held in Windhoek.

From first impressions, it appeared that this will be a technical gathering catering for contractors, engineers, architects, quantity surveyors and others who love to wear hard hats every now and then as they strut across dusty construction sites.

From the exchanges, both from the podium and from the floor, it quickly became apparent there is an extraordinary large contingent of investment managers, fund administrators, financial planners, private equity investors and others who love to make projects horribly expensive by collecting fees and commissions for shoving capital to and fro.

The Lithon infrastructure conference was successful beyond measure effectively bringing together a spectrum of opinions and facts on a single platform between divergent parties, many of whom who would love to stick a dagger in the guts of many others. (Full disclosure: I was a presenter in one of the sessions so I am biased that the proceedings should go well.)

Nevertheless, as early as the first session, it was obvious that between the government’s goals, tactics and strategies, and what the private sector wants, there is an ocean dividing them.

For instance, we learned from the podium that Public Private Partnerships are just a procurement tool and that all projects will be submitted to the provisions of the new Procurement Act. This implied that unsolicited projects are a no no and even if some of these tie in with NDP5, they all will still be subjected to the same tendering mechanism for price and competence discovery.

From the floor came the retort that this does not make sense. Private investors are looking for a competitive edge and this can only come through a process of identifying, scoping and submitting projects that they feel will provide adequate financial returns while at the same time, promoting the development goals.

The disconcerting slant to this is that all the money pedlars want to convince the government of the need for this or that particular project while the government officials remained adamant that priorities will be set according to targets and objectives, and not the other way around.

In short, the exchanges all came down to two opposing views. From the government’s side, it has a clear strategy through the development plans, what must be built first, what are fundamental for further development, and how it must be financed. For the government, I gathered, it is very much a play of balancing priorities with affordability, hoping that a large measure of the risk and the funding will be carried by the investors.

From the investment community’s side, it was equally clear that they have their own priorities and that their main concern is tying investment capital to specific projects regardless of the return on investment. I dare say, it was quite glaring how many of the new hopefuls in investment management wanted to flog projects that will see them get a slice of the anticipated tsunami of funds that will become available once the finance minister’s new Domestic Asset Requirements are fully in place, or once the Regulation 29 dividends become real.

It is not my place to say who is right and who is wrong. But the whole Lithon approach is one based on ethics, so I believe there definitely is room to express an opinion about more appropriate investments, especially regarding infrastructure, and the more self-enriching type of investments.

Which side of the aisle you sit, is for you to decide.

I sense the infrastructure space is going to heat up, not so much from a project perspective but from an investment view. There is this pervasive feeling that the government will continue to borrow money only so that the ambitious infrastructure projects can go ahead. According to all conventional wisdom, they have little option not to carry on with this strategy that has dumped us into dire straits.

From the investor perspective, this leads to the expectation that every other well-connected individual only needs an institutional investor to back him, upon which he will go find, bribe or coerce someone somewhere in government to sign off a project, irrespective of the national development strategy and goals. Most importantly, this approach also has a complete disregard for whose money is being invested. The perception is: the money is there, the government needs it for its projects, we must only figure out a way to link the two then we cash in, big time.

My impression is that the government officials I heard speak, are nobody’s fools. I assume they are so familiar with the tactics of so many project promoters, that they now know where to cover for their wickets, or perhaps for the government’s growing debts.

What also struck me was the lack of technical knowledge of many of the investment hopefuls. They have smelled the money and they know they can enrich themselves and their patrons, if only they can cross this one annoying hurdle: How does one convince a civil servant to OK my particular pet project?


 

 

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 29 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 www.economist.com.na. It is the first Namibian newspaper to go fully digital. Daniel Steinmann 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 jourlists. He regularly 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. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to daniel@economist.com.na

Following reverse listing, public can now acquire shareholding in Paratus Namibia

Promotion

20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.