|
|
|
|
|
|
|
|
|
|
|
You Are
Here: |
Local News|
Friday, October 21, 2005 - Web posted at 6:49:41 GMT Investigators descend on GIPF *LINDSAY DENTLINGERFULL-SCALE, on-site investigations into all investments made by the Government Institutions' Pension Fund (GIPF) swung into action this week. |
|
This follows reports that GIPF has run up more than N$650 million in bad investment deals in recent years. Minister of Finance, Saara Kuugongelwa-Amadhila, announced in the National Assembly yesterday that the investigation would cover the Development Capital Portfolio, all loan assessment methods used, approval and disbursement processes. She was quick to try and allay fears that any bad investments GIPF might have made would affect its ability to make payouts to its members. Loans, she said, were only granted from surplus money. GIPF is the largest pension fund in Namibia, catering for at least 80 000 civil servants. The Namibia Financial Institutions' Supervisory Authority (Namfisa) initially started conducting off-site investigations into the affairs of GIPF from October 3. But this has now been extended. Namfisa has moved in to gain first-hand information on all investments made and the processes followed. Over and above this, the GIPF board of trustees has also commissioned a review of the investments using private accounting and law firms. Kuugongelwa-Amadhila revealed the information in response to a question from the CoD's Tsudao Gurirab in the wake of allegations that GIPF loans may have been utilised for purposes other than that for which they were granted. He questioned whether it would not be appropriate that she commission an independent inquiry into these allegations. "Once the inspection is concluded, we will be in a better position to express an opinion on the investments made of the Development Capital Portfolio and whether the loans granted were utilised for the purposes intended," said Kuugongelwa-Amadhila. The Minister said she expected the investigations to yield a detailed study of each investment and suggest a way forward for each project funded with GIPF money. "Any instances of misappropriation or otherwise misuse of the public funds that are detected will be dealt with decisively and thoroughly," the Minister said. Kuugongelwa-Amadhila said until the reviews were complete it was "hasty" and "unsupported by full facts" to say that N$650 million of the pension fund's money had gone down the tubes. She added that she would soon bring the GIPF's 2005 financial statements to the House, which would indicate that GIPF's assets were now valued at N$19 billion, compared to N$15 billion in 2004. An actuarial valuation of the fund is expected to be carried out next year, in accordance with a rule prescribing that this must happen at least every three years. The Minister said the 2003 actuarial valuation declared the fund in a sound financial position and the rates of contributions adequate to enable the fund to provide the benefits to which its members are entitled. Kuugongelwa-Amadhila reminded the House that the Development Capital Portfolio, from which most of the alleged dubious loans were granted, was established to promote investment in the local economy, with special emphasis on previously disadvantaged Namibians to help them enter the mainstream economy. "GIPF had ventured into this portfolio because it recognised the genuine need to assist people who could not secure finance from the traditional financiers, yet had a business plan that had great potential for success," said Kuugongelwa-Amadhila. GIPF investments were subject to inevitable risk, the Finance Minister said, but thanks to the Development Capital Portfolio, Namibia had "two fine hotels", the revival of copper mines at Tsumeb, large-scale agricultural projects in previously desolate regions of southern Namibia, an abattoir, fish canneries and pig farms. "The performance of the DCP investments have been targeted to strategic projects with a high potential for expanding the economy, creation of jobs and boosting national export earnings. In general the financial returns have been lagging behind expectations," said Kuugongelwa-Amadhila. She maintained that the projects weren't performing as expected for a number of reasons, including the poor management of some projects, unforeseen competition at international level and the exchange rate. "As GIPF was the only fund willing to provide financing to these companies, they were forced to take on the entire risk exposure of projects. GIPF could, like other institutions, [have] refused to finance these projects, but this would have been a neglect of its duty to invest in the local economy, and to help previously disadvantaged Namibians enter the mainstream economy," said Kuugongelwa-Amadhila. She said she expected the return on investments to improve in future, with projects now having been given time to get off their feet. No new loans have been granted from the DCP since 2002, but GIPF has extended additional funds to existing projects in the portfolio. |
|
||||
PO Box 20783 - Windhoek - 42 John Meinert Street Tel: +264 (61) 279600 - Fax: +264 (61) 279602
|
