Welwitschia Sovereign Wealth Fund grows to N$453 million

The Welwitschia Sovereign Wealth Fund has grown to N$453 million since its inception in 2022.

This was announced yesterday by the Bank of Namibia (BoN).

Central bank governor Johannes !Gawaxab said the fund has been performing beyond the bank’s performance benchmark.

“The welwitschia fund has been performing above the set performance benchmark. Currently, I believe it’s 18%,” said !Gawaxab.

The fund received seed capital of N$260 million in 2022 and has nearly doubled over the last three years.

Last year in August, !Gawaxab said the fund was standing at N$440 million

The fund is made up of two separate accounts: a liquid stabilisation account that will be used to safeguard the country from negative macroeconomic shocks and a longer-term intergenerational savings account which will be used to ensure distribution of wealth to all Namibians.

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

BoN, under the jurisdiction of the Ministry of Finance and Public Enterprises, manages both accounts.

Last year, !Gawaxab said the fund was able to grow without additional capital from the government, but rather with returns on investments.

“The money was invested offshore and there has been no capital injection since the seed capital, it’s all investment returns,” said !Gawaxab.

According to the central bank, the fund is structured into short and long-term, and has 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.

Namibia’s welwitschia fund has been benchmarked against the Norwegian Government Pension Fund Global.

Globally sovereign wealth funds have been financed by trade surpluses from oil.

Norway’s pension fund, which is one of the largest single owners of public equities in the world, is also oil-funded.

However, seeing as there has not been commercially viable oil discovered in Namibia, the fund is growing through foreign asset investments.