Hee-Dee Walenga
During a panel discussion under the theme ‘The Future of Institutional Investing in Namibia – a Trustee Led Roadmap’ at the ongoing Namibia Institutional Investors Forum in Windhoek, panellists expressed that the Namibia Securities Exchange (NSX) could be a source of developmental capital for public entities such as the Road Fund Administration and the City of Windhoek.
The panel consisted of Momentum Investments Namibia Managing Director, Jason Hailonga, NSX CEO Tiaan Bazuin, Business Development Manager at Ashburton Investments Namibia, Heike Scholtz, and Head of Operations at Liberty Life Namibia, Sydwill Scholtz.
Bazuin stated, “We are not in a position where we can issue something like a municipal bond, nevermind any of the infrastructure that the country requires.” He explained that these projects cannot be financed through capital markets because they require qualified audited opinions, financial controls, and board governance that are currently not in place.
“That is why the private sector is making use of the capital markets and the public sector is not. The things we would like to see funded by capital markets are impossible to fund because there are not enough controls put in place for the money to be allocated where it is supposed to go,” added the NSX CEO.
Heike Scholtz stated that public entities need to be held accountable for outstanding audits. “This is where the governance aspect comes in. We need to be in more rooms to ensure that we hold each other accountable to high standards, that includes the government,” she stated, adding that “We are only going to solve this problem if the public and private sector sing from the same hymn sheet.”
Hailonga, who was involved with the last three IPOs of the NSX, suggested that the public enterprises need to “be taken by the hand and guided” in terms of what is required of them to be listed on the NSX.
He further explained that for public entities to list a paper on the exchange, they need audited financial statements and a rating from a credit agency. “It’s a long and expensive process, but once you get it done, you can raise the funds you need,” Hailonga stated.
The Momentum Investments MD added, “For example City of Windhoek, they can raise funds for accelerated land servicing. We need to find a way as a country and advisors to take them by the hand and come up with a plan for these entities. It will be a huge game changer for infrastructure development.”
Hailonga, who has served on public boards in the past, identified a lack of appropriately skilled human capital as an additional challenge in achieving the feat. Speaking from personal experience, he stated that there are employees in key positions in public enterprises who do not understand what a bond is.
“They need to say to themselves ‘for us to have a paper on the NSX, we need to have a CFO that is a certified CA,’ for example. This framework also allows for better ESG reporting,” Hailonga concluded.
