GIPF tentacles … where billions of civil servants are invested


At the end of the month, when officials receive their payslips, a small line at the bottom of the document connects everyone – from cleaning staff to senior officials – to the richest companies in the world.

These monthly deductions go to the Government Institutions Pension Fund (GIPF), the country’s largest investment fund, valued at N $ 136.2 billion, with shares in more than 700 companies around the world.

These actions, in turn, mean that everyone who contributes to the fund owns a tiny slice of automakers, diamond mines, casinos, filmmakers and even Silicon Valley.

The fund’s seemingly simple mission is to take workers ‘monthly pension contributions, invest them wisely, and pay workers’ retirement pensions.

The 101,000 government employees each pay 8% of their salary, and the government matches that with an amount equal to 16% of their salary.

“The money paid must be invested wisely in order to be able to pay the promised benefits to these members and their retired dependents,” said former PSG Namibia research manager Eloise du Plessis.

“This is the sole responsibility of GIPF.

If the fund were to deposit all contributions into a bank account and then pay them later, it could run out of money.

RISK MANAGEMENT

Fund managers must take into account various risks, such as inflation.

Someone who starts working at 25 would pay a lot more for a loaf of bread 35 years from now when they retire than they are today.

Another factor to consider is the age of the population.

Currently, Namibia has more young people than retirees, but in the future these young people will retire and have to collect pensions.

There are other concerns, such as the global economy and possible financial crises, such as that of 2008.

In order to manage risk, the fund invests in different ways.

It buys, among other things, government bonds. The Treasury is legally bound to repay this money with interest.

Some of the fund’s money is invested in giant global companies, which are also considered a safe investment, such as government bonds. This means that GIPF owns shares in companies like Toyota, Google and Microsoft.

Of course, companies that appear “safe” today may not be in the same situation tomorrow.

The fund sold its N $ 3.5 million shares in Nokia, which once looked positive, for example.

Now he has transferred money to new companies, like Zoom, betting that office workers will continue to participate in video conferences after the end of the Covid-19 pandemic. The pension fund’s largest stake is a N $ 3.2 billion stake in South African company Naspers Limited, which owns MultiChoice and News24.

Its money, however, is spread all over the world, from Air Canada to De Beers to Samsung.

More than 50 companies and individuals manage the fund’s investments, including Namibians, but also managers in Dubai, South Africa, the United Kingdom and the United States.

They get paid a percentage of the money they manage, which adds up quickly.

Their payments have totaled N $ 1.2 billion in the past two years alone.

THE BRAND

Since the creation of the fund in 1989, its assets have exceeded the national budget.

Over the past three years, the value has averaged at least 70% of what the country produces in total.

This kind of money attracts attention.

Last year, former Prime Minister and Defense Minister Nahas Angula said he knew there was corruption within the fund during his tenure.

Investment decisions for GPIF and all other pension schemes are overseen by the Namibia Financial Institutions Supervisory Authority (Namfisa) to avoid interference.

Some argue that the fund’s money could be better spent meeting the immediate needs of the country, and not necessarily the future needs of retirees.

Windhoek Mayor Job Amupanda believes the fund should finance real estate developments.

“The GIPF is an instrument in the hands of the elites, functioning as missionaries who tell our people to expect imaginary rewards in Heaven while suffering on earth,” he said earlier this year.

“The point is, our people need to access housing now, directly from their pension – not when they turn 60. “

Despite its huge pockets, GIPF has not invested more than N $ 2 billion in housing, one of the country’s biggest problems.

The current housing backlog in Namibia stands at over 100,000 houses, while nearly one million people live in informal settlements.

GIPF has invested in housing, as well as in farms in the Zambezi region and Grove Mall in Windhoek.

Other local investments included textbook publishing, solar power, hospitals, and countless residential and commercial apartments.

The fund also holds a stake in the microcredit of civil servants, ami Letshego Namibia.

These investments are part of what the fund calls its “investment for development policy”, but not all investments pay off.

SCANDALS AND CONFLICTS

GIPF’s reputation is further marred by the millions it lost in the Development Capital Portfolio scandal around 2010.

The scandal, in which more than N $ 600 million of civil servants’ money was invested in questionable deals, led to the ousting of former GIPF chief executive Primus Hango.

The government’s dependence on the fund to buy its bonds essentially makes GPIF a major lender to the Treasury.

This is reinforced by the requirements for the fund to invest much of its money locally, and bonds are one of the most readily available local investments.

Then there are the conflicts of interest.

Ninety One Asset Management (formerly Investec Namibia) holds the biggest slice of the GIPF pie in Namibia, valued at N $ 15.3 billion.

Much of this happened when James Hatuikulipi was the Managing Director of Investec, which is currently in prison in connection with the Fishrot corruption scandal.

Former Finance Minister Calle Schlettwein has pushed for an investigation into allegations of favoritism between Investec Asset Management Namibia and the directors of GIPF after the arrest of two of the bosses of the investment entity.

BIG COG

Because GIPF makes payments to current retirees, it is not allowed to invest all of its money.

The fund has a legal obligation to keep sufficient cash to make pension payments.

He also has a huge role to play in steering the Namibian economy, said Trophy Shapange, managing director of Hangala Capital, which has pledged to manage around N $ 500 million for the fund.

“GIPF, being the largest pension fund in the country, has a high hand in the direction and shaping of our economy. GIPF alone has around N $ 54.9 billion, which is almost equivalent to our national budget for local investments, ”he said.

“The development of SMEs and infrastructure are vital and more urgent to grow the economy. GIPF did quite well, but there is still a long way to go. They must engage the government to ensure that funds are diverted to social impact projects without compromising the fund’s reserves and assets.

Du Plessis says that while it is true that GIPF has been instrumental in moving the Namibian economy, she is concerned that the fund will struggle to maintain a high return on local investments.

“Investment opportunities are limited and GIPF is forced to invest in Namibian government bonds and cash. The returns on these investments are lower than those on other assets, ”she said.

“I would not force GIPF money into risky investments and jeopardize the financial strength of the fund. The current and future portfolio of alternative managers should be chosen on the basis of their skills, expertise and a solid portfolio of investments, and not on the basis of favored political projects, ”she said.

E-mail: [email protected]: @Lasarus_A

* This article was produced by The Namibian’s investigative unit. Email advice from your secure messaging system to [email protected]

SO WHERE IS THE MONEY?

Below is a list of the fund’s notable investments and their value at the end of March 2021:

IN NAMIBIA

Capricorn Group Limited N $ 1.7 billion

FirstRand Namibia (FNB) 972 million Namibian dollars

Namibian breweries N $ 928 million

Oryx Properties Limited N $ 291 million

Standard Bank Namibia 23 million Namibian dollars

Letshego Namibia N $ 25 million

Stimulus Investment Limited N $ 77 million

SOUTH AFRICA

Mediclinic International 33 million Namibian dollars

Shoprite Holdings N $ 298 million

Old Mutual Limited N $ 182 million

Sanlam Limited 328 million Namibian dollars

Anglo American (parent company of De Beers) N ​​$ 1.1 billion

Nedbank Group Limited N $ 223 million

Absa Group N $ 253 million

British American tobacco 1 billion Namibian dollars

MTN Group Limited N $ 620 million

Naspers Group Limited (DSTV) 3.2 billion Namibian dollars

Mr Price Group Limited 146 million Namibian dollars

The Spar group 152 million Namibian dollars

Vodacom Group Limited N $ 174 million

Pick n Pay Stores Limited 44 million Namibian dollars

GLOBAL

Rio Tinto Plc N $ 18 million

Amazon Inc N $ 244 million

EBay Inc. 9.7 million Namibian dollars

Bank of America 149 million Namibian dollars

Microsoft Corporation 134 million Namibian dollars

Walmart Inc 11 million Namibian dollars

Barclays Plc N $ 15 million

Rothschild & Co 3.5 million Namibian dollars

Rakuten Inc 3.1 million Namibian dollars

Sony Corp Inc 34 million Namibian dollars

Toyota Industries and Toyota Motor Corp N $ 32 million

Porsche Automobile Holdings 12 million Namibian dollars

Heineken Holdings NV and Heineken NV $ 40.4 million NV

Samsung Electronics Co Limited N $ 280 million

Air Canada 14 million Namibian dollars

Alphabet Inc (Google) 322 million Namibian dollars

Zoom Video Communications Inc N $ 29 million

Shopify Inc 83 million Namibian dollars


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