Agency Reporters with Wisdom Deji-Folutile
The Namibian Government has on Thursday launched the Welwitschia Fund, a sovereign wealth fund aimed to promote intergenerational prosperity for citizens.
Speaking at the launch, President Hage Geingob said the country would ensure that the benefits flowing from exploiting the country’s natural resource endowments were shared across generations.
Geingob said the country was taking concrete actions to herald a new era for Namibians.
“We would like to put aside a portion of the revenue we collect from the present exploitation of mineral resources for future generations of Namibians also to enjoy the fruits of the resource endowment of their country,’’ he said.
The Namibian leader said the fund would be split into two, the Intergenerational and Stabilization Accounts, financed with proceeds from the renewable energy industry, mining royalties, fishing quotas and the sale of state-owned assets.
“The second objective of the fund, which would be served by the Stabilisation Account, is fiscal and official reserve stabilisation,” he said.
According to him, Namibia is establishing the Welwitschia Fund to serve as an automatic shock absorber and enable the country to maintain stable expenditure patterns over time.
The Welwitschia Fund is set to become one of Africa’s newest sovereign wealth funds and will be administered by the Bank of Namibia.
Speaking at the launch, the Minister of Finance Iipumbu Shiimi said, through the fund, they would like to put aside a portion of the revenue they collect from the present exploitation of mineral resources for future generations of Namibians.
“The diamonds we are mining today are non-renewable resources. At some point, they will be depleted from our shores. What are we then to bequeath to the next generations of Namibians as a representation that they are citizens of a country that was once blessed with such mineral resources?” he added.
President Hage Geingob said at the launch the Welwitschia Fund would get an initial injection of 262 million Namibian dollars ($16.15 million) and invest 2.5% of its portfolio locally to bridge the country’s infrastructure financing gap. According to the Sovereign Wealth Fund Institute (SWFI) website on Thursday, the Current Assets for Welwitschia Fund stands at $3,262,725.
Other resource-rich African countries with sovereign funds include Angola, Botswana, Libya and Nigeria.
In February, it was reported that TotalEnergies’ Venus prospect offshore Namibia had found a quality reservoir worth more than 1 billion barrels of oil. This discovery–a second major one–was made a month after Shell also announced a significant find.
Known for its gem-quality diamonds, gold and uranium, Namibia has considered creating a sovereign fund since 2009.
The African country aims to become a green hydrogen player by 2026 and has selected a preferred bidder for a multi-billion dollar project.