Cumulatively N$10,19 billion of Namibia’s savings were availed for unlisted space investment in 2022, however, as at 31 December 2022 only N$5.5 billion was disbursed.
This has left around N$4,69 billion of the committed capital lying idle.
This was indicated by the Namibia Financial Institutions Supervisory Authority (Namfisa) in its second and fourth quarter report of 2022.
The report provides an analysis of the unlisted investments industry for the second and fourth quarters of 2022, that is 1 July 2022 to 31 December 2022.
By the end of June 2022, N$5,1 billion of the country saving was committed to the unlisted companies and projects but only N$2,6 billion was disbursed or channeled to projects.
Six months to the end of the year, the total committed capital was N$5,09 billion as of 31 December 2022, while total investments in unlisted companies as of 31 December 2022 amounted to N$2,9 billion as some capital lay idle.
The consistent gap between capital commitment and disbursement has been observed in the economy as either capital struggles to find growing avenues or perhaps the available opportunities are not in line with the mandate given.
Neither in the Namfisa report nor anywhere in the publicly available reports havereasons been given why capital in the unlisted space are struggling to find projects.
According to Namfisa’s assessment, the increase in committed capital can be attributed to additional capital committed to Special Purpose Vehicles (SPVs).
“This increase in committed capital indicates that pension funds are continuing to comply with the regulations by allocating additional capital for investment in unlisted companies through SPVs,” the report stated.
The capital is channeled into the unlisted space either through equity or debts (mostly).
Total investment share made in the form of equity funding decreased to 56.2% as at 31 December 2022 compared to 64% during the previous period.
Conversely, total investments made in the form of debt funding increased to 43.8%from 36% in the previous reporting period.
Therefore, most of the funding advanced during the period was from equity fund SPVs.
Most of the committed capital comes from retirement savings.
The total value of capital committed for unlisted investments was N$4.9 billion of which 53.5% was drawn down as at 31 December 2022.
The unlisted investments class for the re-recorded drawn-down capital of 1.4%, while committed capital was 2.7%, within the allowable range of 1.75% to 3.5%.
The assets of the Collective Investment Schemes (CIS) stood at N$79.1 billion by the end of 2022. Of this asset only 2% is invested in unlisted debt 2.% while 1.5% on unlisted equity.
The investment managers’ assets under management increased by 6.7% quarter-on-quarter and by 1.5% on a year-on-year basis to N$210.9 billion as at 31 December 2022.
The investment managers have deployed 0.8% of the savings in unlisted debt and 0.8% of their assets in unlisted equity 0.1%.
The farming and agricultural industry, manufacturing industry, and renewable energy industries remain the major sectors invested in, accounting for 18.7%, 16.3%, and 15.9% of the total investments in unlisted investments.
Additionally, the last six months of 2022 saw an increase in the number of jobs created through investments in unlisted companies.
The total number of jobs created was 7,691, with 5,717 permanent and 1,974 temporary jobs.This represents an increase from the previous reporting period that ended 30 June 2022, which recorded 7,560 jobs.
It is notable that the farming and agriculture industry employed the highest number of employees in portfolio companies with 1,722 employees, an increase of 211 employees from 1,511 employees recorded during the previous period. This was followed by the manufacturing and construction sectors, which employed 975 and 836 employees, respectively.
The country’s non-banking financial sector assets/savings increased quarterly by 2.6% and contracted by 1.2% to N$366,04 billion annually at the end of the fourth quarter of 2022. Email: email@example.com