‘Private equity: Lesson for Namibia’ , BoN study

THERE is need to import skills and a focus towards skills formation to support the local private equity industry.

In a latest research study conducted by the Bank of Namibia (BoN) entitled “Private equity: Lesson for Namibia”, it was noted that although there was sufficient scope for private equity industry in the country, there was need for policies and incentives which could stimulate the development of private equity or venture capital in Namibia. The study also established that strong partnership between the public and private sectors and skills development were equally vital; adding that in the last regard the Ministry of Home affairs should be lenient in terms of immigration rules to allow expertise from other countries to be used in the domestic economy.It was also recommended that the Namibia Stock Exchange should “vigorously undertake awareness campaigns and educate the investment community about the true value and risks to be found in venture-capital companies as this could improve investors” appetite for such investments’.Private equity initiatives in the country currently are Stimulus Private Equity Fund, African Mining Development Company, Government Institutions Pension Funds and Namibian Harvest Investment (NHI).According to the study these initiatives aim at filling the financing gap faced by the medium-scale enterprises and injecting private equity capital in other areas of the economy which are experiencing financial constraints.The 46-paged draft study – complied by researchers Bernie Zaaruka, Ebson Uanguta and Gerson Kadhikwa – was under discussion at a BoN seminar in Windhoek on Thursday.Topics covered in the study include private equity in Namibia, experiences from other countries, lessons for Namibia and recommendations.Private equities are equity securities of companies that have not “gone public”, in other words, companies that have not listed their stock on a public exchange.Private equity can be used for various reasons such as to develop new products and technologies, expand working capital or strengthening a business’ balance sheet.International evidence has proved that private equity and entrepreneurship can contribute to economic growth through the development of successful businesses.The study also established that strong partnership between the public and private sectors and skills development were equally vital; adding that in the last regard the Ministry of Home affairs should be lenient in terms of immigration rules to allow expertise from other countries to be used in the domestic economy.It was also recommended that the Namibia Stock Exchange should “vigorously undertake awareness campaigns and educate the investment community about the true value and risks to be found in venture-capital companies as this could improve investors” appetite for such investments’.Private equity initiatives in the country currently are Stimulus Private Equity Fund, African Mining Development Company, Government Institutions Pension Funds and Namibian Harvest Investment (NHI).According to the study these initiatives aim at filling the financing gap faced by the medium-scale enterprises and injecting private equity capital in other areas of the economy which are experiencing financial constraints.The 46-paged draft study – complied by researchers Bernie Zaaruka, Ebson Uanguta and Gerson Kadhikwa – was under discussion at a BoN seminar in Windhoek on Thursday.Topics covered in the study include private equity in Namibia, experiences from other countries, lessons for Namibia and recommendations. Private equities are equity securities of companies that have not “gone public”, in other words, companies that have not listed their stock on a public exchange.Private equity can be used for various reasons such as to develop new products and technologies, expand working capital or strengthening a business’ balance sheet.International evidence has proved that private equity and entrepreneurship can contribute to economic growth through the development of successful businesses.