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Govt delays Sovereign Wealth Fund launch

The Ministry of Finance says Namibia’s much-awaited Sovereign Wealth Fund, dubbed the Welwitschia Fund, will only be launched during the first quarter of 2022.

A Sovereign Wealth Fund is a state-owned investment fund composed of money generated by the government, often derived from a country's surplus reserves invested for the benefit of a country's economy and its citizens.

Wilson Shikoto, Finance ministry’s Spokesperson, told The Brief on Friday that the delay in launching the Welwitschia Fund was caused by operational issues as Cabinet has already approved its funding model.

“The Welwitschia Fund will be launched during the first quarter of 2022. In the meantime, the technical team is seized with finalising a few pending operational issues. Yes, the funding model of the Welwitschia Fund has been finalised and approved by the Cabinet,” he said.

The shift in the lunch dates comes after Finance Minister Iipumbu Shiimi had announced in October plans by the government to set up the Fund before the end of the year to secure the country's future savings and transform the economy.

The Fund, structured into short and a long-term, will have a balanced mandate where 70% of the assets bought are risky assets such as equities while the rest are fixed income assets, real estate and private equity.

About 2.5% of the intergenerational fund will be invested in infrastructure projects with socio-economic benefits for future generations.

Government aims to set up the Fund with financing from savings, proceeds from the green renewable sector, mining royalties, fishing quotas, divestiture of state-owned enterprises as well as Southern African Customs Union receipts.

Government has mulled the possibility of using 50% of proceeds from the Mobile Telecommunications Limited (MTC) Initial Public Offering (IPO) totalling N$1.27 billion as seed capital to kick start the much-anticipated.

Quizzed if the government has now secured its share of the IPO proceeds, Shikoto said “The proceeds from the MTC listing have not been utilised by the Government yet. The holding company, the Namibia Post and Telecom Holdings is yet to declare a special dividend and therefore the funds have not been paid over to the State yet.”

Hyphen Hydrogen Energy, which has won two bids to construct Namibia’s inaugural green hydrogen projects, has also committed 2.5% of the annual revenue to be generated from the project to go to the Sovereign Wealth Fund.

African Sovereign Wealth Funds are worth an estimated US$16.4 billion according to Global SWF.


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Last modified on Wednesday, 05 January 2022 06:42

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