The Government Institutions Pension Fund (GIPF) has expressed concern over the moratorium placed by the state on the recruitment of civil servants.
The Fund says it is currently experiencing an imbalance between its income and what it pays out.
The imbalance stems from the high number of members going on retirement who are then paid their pension claims, a rate that has now turned out to be higher than what the institution collects.
The GIPF’s outgoing CEO David Nuyoma said the Fund’s survival is dependent on its multibillion-dollar asset base which is at N$157 billion.
“There is a situation where we are experiencing relaxed recruitment compared to those that are exiting service, thus resulting in an imbalance in contribution and payment ratio. However, this is not unique to GIPF, but what is important is, what are you going to do about it? And the only way is by making meaningful investments, maintaining and growing our liquidity, so that we can be able to offset the margin when a shortfall arises,” Nuyoma said.
Due to a ballooning wage bill that takes about 42% of the national budget, the government decided to freeze recruitment of new staff members, however, placing leniency on critical positions.
This was further exacerbated by the underperforming economy and increasing public debt that is estimated to reach N$138 billion, equivalent to 70% of gross domestic product (GDP).
Namibia has a civil servant workforce of over 100,000, which costs the government about N$2.4 billion monthly in salaries.
“Therefore, this situation will persist longer, for as long as we are not getting a higher member input into the fund. It is only through a recruitment drive that we can receive more, thus cementing our sustainability,” Nuyoma reiterated.
