Embrace best practices of corporate governance and risk management says NAMFISA CEO
NAMFISA CEO Kenneth Matomola says for businesses to survive and thrive under these uncertain times it is important to embrace best practices of corporate governance and risk management.
Matomola made these remarks as part of his welcoming statement at an industry meeting for the Capital Markets industry, regulated by NAMFISA. Industry meetings are some of the platforms aimed at enhancing stakeholder engagement through which NAMFISA, as the regulator, would like to foster beneficial relationships premised on collaboration, trust and productive and active engagement.
On a high level overview of the industry, Matomola says the Capital Markets industry saw an increase in assets under management signifying good performance despite the challenging times following the 2020 economic shock overall, according to data received for Q2 2021.
NAMFISA has observed that many entities operating in the capital market arena, have started offering digital products and offerings, which is a commendable and responsible approach to remaining relevant in the market and to safely service clients.
Talking on the Economic outlook, the NAMFISA CEO says the International Monetary Funds’ latest World Economic Outlook update provides a glimmer of hope to these challenging times. The IMF predicts that after the 3.5% contraction in 2020, global growth is set to rise by 5.5% in 2021 and 4.2% in 2022.
Overall, the any hope of economy recovery in the world is attributed to government issuing stimulus packages to cushion financial burdens on businesses and the rolling out of vaccines.
The emerging markets are predicted to attain the most growth of approximately 6.3% in comparison to advanced economies attaining 4.3%. According to the Bank of Namibia, the domestic economy is estimated to have contracted by 7.3% in 2020, before returning to an expected moderate recovery of 2.6% in 2021.
The CEO says while the race to find an effective coronavirus vaccine is on-going as it is the only known gateway to leading normal lives without lockdowns, social distancing, wearing of face masks and travel restrictions, life and commerce must continue and is in fact going on.
“We need to device ways and means to rebuild a resilient Namibian economy under the current new normal. In the face of the COVID-19 pandemic, it is imperative that regulated entities are agile and embrace the opportunities that come with the devastating effect of the pandemic”. Ultimately, how companies/ businesses respond when disruptions occur as a result of the externalities such as the pandemic determines true agility, stressed Matomola.
He further updated the regulated entities on the ongoing NAMFISA legislative reform as follows:
a. The Minister of Finance, Honourable Shiimi, requested NAMFISA to draft regulations for Central Securities Depository that will be issued under the Stock Exchanges Control Act, which have been circulated for industry input. He urged the industry to provide their input for consideration.
b. The new NAMFISA Act was passed by the National Assembly and signed by the President of the Republic of Namibia.
c. The long-awaited FIM Bill was approved by the National Assembly and awaits presidential assent.
d. The National Council has also referred the FSA Bill back to the National Assembly for amendments relating to cross referencing to the NAMFISA Act and FIM Bill.
The core focus of the legislative change is the shift from compliance-based and standalone supervision, to a risk-based and integrated supervision, allowing for better preparedness, risk mitigation and efficiency in the supervision framework.
The envisaged legislative instruments further aim at correcting market inefficiencies, thus making the non-bank financial sector more relevant to the national development objectives and promoting national competitiveness through alignment with the best regional and global practices. Additionally, the legislative reform seeks to foster confidence in the financial system and soundness of financial institutions and financial intermediaries.
The Bills thus aim at maintaining the highest standards of conduct of business by non-bank financial institutions and financial intermediaries, and the reduction and deterrence of financial crime. The bid for greater consumer protection, transparency and highest standards of market conduct necessitated the need to introduce designate legislation for the speedy, accessible and cost-efficiency resolution mechanism for consumer complaints, ensuring that consumers of financial products and services are treated fairly.