The Namibia Depository Guarantee Authority (NDGA) says its investment value increased to N$16.2 million by the end of the 2022 financial year attributed to premiums received and interest earnings.
NDGA head, Florette Nakusera, said the fund’s assets remained safe and secure, having been invested in line with the approved investment policy and guidelines.
“In this regard, the market value of the Deposit Guarantee Fund stood at N$16.2 million by the end of the reporting year, representing a significant increase from N$10.3 million the year before,” Nakusera said.
“The high returns for 2022 are attributed primarily to N$5.2 million received in premiums, as well as interest earnings of N$790,963 during the review period. The NDGA continued to strengthen and enhance its operations and to grow as an institution during the reporting year.”
Established in 2020, the NDGA is administered by the Bank of Namibia. It safeguards depositors’ money by compensating them in case a member bank fails. This not only protects individual depositors but also promotes financial stability within the banking sector and the country as a whole by insuring a portion of bank deposits.
Meanwhile, NDGA Board Chairperson Ebson Uanguta said the NDGA audit report was done at a time when economic developments, both globally and domestically, remain subdued.
He said the global economic activities slowed in 2022 relative to the substantial improvement recorded in 2021, mainly due to persistent inflationary pressures and subsequent tightening of financial conditions in most regions.
“The global economy is estimated to have registered 3.4 percent growth in 2022, which represents a slowdown from the 6.2 percent recorded in 2021. The tempering of economic activity is being buoyed by the escalation of the Russia-Ukraine war, coupled with inflationary pressures that are persistently higher than those seen in the past few decades,” Uanguta said.
Locally, Uanguta said in 2022, Namibia’s economic performance is estimated to have improved slightly, compared to the previous year, with real gross domestic product (GDP) growth increasing to about 4.6% compared to 3.5% in 2021.
“The estimated improved growth for 2022 is largely based on higher production volumes from the diamond mining sector. Nonetheless, the banking sector remained resilient despite various challenges,” Uanguata said.
“The industry reported good balance sheet growth, strong capital, profitability, and adequate liquidity levels. Moreover, the steady economic recovery during the reporting year resulted in the industry recording elevated growth in earnings.
“The banking industry, thus remained well capitalised, with a notable improvement in asset quality and total income during the review period. The total eligible capital ratio increased to 17% up from the 15.9% reported for 2022. The improvement in asset quality as measured through non-performing loans (NPLs) was due to a combination of repayments, write-offs and debt restructuring measures,” he added.
In addition, Nakusere reckoned the development of NDGA’s first Strategic Plan 2023-25 as one of the key achievements in 2022.
The plan, she said, is anchored on four strategic objectives focused on enabling the Authority to realise its vision and deliver on its mandate.
“The enhancement of the NDGA’s risk management framework, in line with our commitment to good governance, constitutes another key achievement during the year under review. In this regard, the adoption of a Risk Register and developing a Risk Management Policy will greatly enhance operations and strengthen the Authority’s institutional architecture,” she added.
