Private funds should invest in infrastructure: Gawaxab
WINDHOEK – Executive Chairperson of Eos Capital, Johannes Gawaxab is appealing to stakeholders in the pension fund and long term insurance industry to consider private equity and infrastructure development.
Gawaxab made this appeal during a business breakfast to discuss private equity and infrastructure investment in Windhoek on Tuesday.
He said one of the biggest pension funds in the country, the Government Institutions’ Pension Fund, has announced its intention to invest more in infrastructure development, and he wants others to follow suit.
Gawaxab told Nampa after the event there are a number of potential investment areas such as water, airports, rail, and student accommodation.
“Alternative sources for funding of infrastructure have become critical as never before as infrastructure boosts economic productivity, helps create jobs, improves trade flow and improves the overall competitiveness of countries,” he said.
Stressing the need for investment in infrastructure, he cited Bank of Namibia estimations in 2014 that the infrastructure requirement for Namibia was N$225 billion, of which N$73 billion was expected to be acquired through loans and Government subsidies.
Gawaxab said the reprioritisation of Government’s capital expenditure due to fiscal constraints and the fiscal situation over the years is not expected to improve in the short term.
This, he said, resulted in the gap of N$150 billion in 2014 to finance infrastructure projects, which has now grown to about N$200 billion.
He said studies have shown that poor road, rail and port facilities add about 40 per cent to the costs of goods traded among African countries.
“Investment in infrastructure is key in unlocking the growth potential that will attract new investors, therefore, time has come for us to consider alternative infrastructure funding mechanisms to boost economic growth in Namibia.”
Eos Capital is a Namibian private equity fund manager.
Guest speaker at the breakfast, Chief Executive Officer of the Public Investment Corporation (PIC) in South Africa, Daniel Matjila agreed and threw a challenge at Namibia to utilise the 5 percent the PIC has set aside in its budget for development in Africa to be invested in infrastructure.
“Namibia will get a fair share of our cake in the form of infrastructure,” said Matjila.
Established in 1991, the PIC manages funds deposited by some public entities and clients in South Africa, with the goal of generating benefits for clients and contributing to the development of South Africa. – Nampa