Namibia has set up a sovereign wealth fund to cushion the country against future economic shocks, President Hage Geingob said on Thursday.
Geingob said the sovereign wealth fund would be funded from royalties from mineral resources sold and some tax revenues as well as money raised by the government divesting from its investment holdings and contributions from certain state-owned enterprises.
“It is imperative to put some savings aside to cushion the economy in the event of unpredictable catastrophes,” Geingob said at the launch of the fund in the capital.
Like most other African countries, Namibia is recovering from the effects of the COVID-19 pandemic and the Russia-Ukraine war.
Geingob said the Welwitschia Fund would get an initial injection of N$262 million (about US$16.3 million) and invest 2.5 percent of its portfolio locally to bridge the country’s infrastructure financing gap.
The launch of the fund comes in the wake of the recent discovery of vast offshore oil reserves by TotalEnergies SE and Shell Plc in February, and plans by the government to develop and export green hydrogen.
Namibia becomes the latest resource-rich African country to set up a sovereign fund. Others include Angola, Botswana, Libya and Nigeria.
JN/APA