The Namibia Financial Institutions and Markets Bill which is being considered by parliament aims at improving the quality of regulations in the financial sector
The bill further seeks to make the regulations cost-effective and in tune with economic growth objectives, job creation and national competitiveness.
In addition the Financial Sector Strategy (NFSS) aims at deepening the local financial markets, expand financial inclusion, and improve the localization and skills development in the financial sector.
This was said by Namibia Financial Institutions Supervisory Authority (NAMFISA)’s chief executive officer Mr Kenneth S. Matomola. Matomola was on 30 January 2020 speaking at a media briefing in Windhoek about the challenges, new plans and the way forward in regard with the regulations of Pension Funds.
“The objective of amendments [of Pension Fund Regulations] aims at fostering prudent investing by restricting the maximum exposure to each asset class, to ensure that pension fund investments are properly diversified across both asset class and geographic region, as well as to promote investments by pension funds in Namibian assets,” Matomola explained.
Matomola further indicated that since the country’s First National Development Plan (NDP1) actual growth in employment has mainly been below the NDP targets.
“As a result high unemployment remains a serious concern, and the creation of employment opportunities is a national priority.
“Hence, it has now become imperative to foster the stimulation of economic growth, so that institutional investors, such as pension funds, should be encouraged to contribute to this national priority.”
Matomola pointed out that the new bill, the amendments to the pension fund regulations, as well as the Financial Sector Strategy will give more teeth to NAMFISA to not only ensure full compliance by pension funds with their national obligations, but also for the financial regulator to successfully curb the outflow of capital to foreign markets.
“We will also make pension funds’ domestic savings fruitful for Namibia’s economic and social development.”
Yet Matomola admitted that Namibia has for too long continued to be a net exporter of savings due to the size of the economy, but also due to weaknesses in the financial system, which include: a shallow and under-developed capital market; outdated, inadequate and less effective regulatory framework; limited access to financial services; not much trading on the Namibia Stock Exchange, and the dominance of dual listed companies on NSX.
CAPTION: NAMFISA Chief Executive Officer Kenneth S. Matomola