Total investments in unlisted companies’ committed capital have risen by 12% to N$5.09 billion last year with farming and agriculture, manufacturing, and renewable energy dominating, official data reveals.
According to the Namibia Financial Institutions Supervisory Authority’s (NAMFISA) annual report for the financial year ended March 2023, the surge in committed capital reflects the continued dedication of pension funds to adhere to regulations, allocating additional capital for investments in unlisted companies through Special Purpose Vehicles (SPVs).
The report further highlights a shift in investment strategies, with total investments made in the form of equity decreasing from 64% to 56.2% by 31 December 2022, while investments made in the form of debt funding increased to 43.8%, up from 36% in the same period.
Notably, three sectors, “farming and agriculture, manufacturing, and renewable energy – emerged as the primary targets for investments, accounting for 18.7%, 16.3%, and 15.9%, respectively, of the total commitments in unlisted investments as of 31 December 2022”.
“This increase in renewable energy compared with the same period in 2021 reflects a growing focus on energy independence and reduced reliance on South Africa for electricity,” the report states.
NAMFISA also indicates that Namibia’s commitment to increasing energy generation through green energy aligns with international efforts to combat climate change and reduce carbon emissions, further motivating investments in renewable energy.
Meanwhile, the report disclosed that the total assets under management in linked investment service providers decreased by 1.9% to N$14.98 billion at the end of December 2022, compared to N$15.3 million registered at the close of 2021.
“The decrease in assets under management in linked investment service providers highlights the evolving dynamics of the financial sector,” the report noted.
Geographically, 55.8% of these assets were invested domestically, with 43.3% in the Common Monetary Area (CMA) and 0.9% in offshore markets.
“Investment managers have consistently held above 50% of their total assets in domestic assets over the five-year period from 2018,” the report observed, underscoring their commitment to domestic investments.
Investment managers saw a 1.5% increase in assets under management, reaching N$210.9 billion as of 31 December 2022, compared to the previous year.
“The significant increase in assets under management by investment managers reflects a robust financial sector in Namibia,” the report stated, highlighting the sector’s resilience.
