Retirement can boost infrastructure investment

Retirement funds have been urged to recognise their importance to economic development and increase their involvement in local infrastructural developments.This was the message shared on Tuesday by Deputy Minister of Finance Natangue Ithete at the annual conference of the Retirement Funds Institute of Namibia (RFIN).While their primary purpose is the financial independence of their members, Ithete said retirement funds play an important role in the economy through accumulation of savings, their contribution to GDP and development of financial markets. Citing the 2014 Namibia Financial Institutions Supervisory Authority (Namfisa) annual report, Ithete said retirement funds were said to hold total assets worth N$119.6 billion that year, equivalent to approximately 85% of the country’s GDP.About 41% of those assets, he said, were invested in Namibia.“While there is no empirical study on the exact contribution of retirement funds to the development of the Namibian economy, there is no doubt that the assets invested in Namibia, coupled with the amounts paid out to the retirement funds’ members, which was about N$13 billion for the past five years, had a positive impact on the development of the economy,” he said.Namibia recently introduced new policies requiring pension funds to invest at least 35% of their assets locally.While the rationale behind these policies was understood, Ithete said most retirement funds preferred to invest in local equities, ignoring other asset classes.“Economically investment in infrastructure has many advantages as it enhances economic productivity, enhances economic competitiveness, encourages job creation, reduces poverty, and improves delivery of social services such as healthcare and education,” the deputy minister said.“Pension funds are therefore encouraged to consider investing in infrastructure in various sectors such as water, power, housing, transportation, ICT and so forth, without compromising their ability to meet their liabilities.”Citing a 2014 Bank of Namibia study, he said there was a good case to be made for investment by pension funds in Namibia’s infrastructure, as both had long-term investment horizons.“Investment in infrastructure has attractive yields, albeit may potentially have higher volatility,” he said.In smoothing the way for investors, he said the government was working on its framework for public-private partnerships (PPPs), which would provide further guidance on how private entities, including retirement funds, can partner with public entities. DENVER ISAACS

Retirement can boost infrastructure investment

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Namibian Sun 2025-09-05

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Retirement can boost infrastructure investment

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Namibian Sun 2025-09-05

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