The Namibia Stock Exchange (NSX) has grown significantly over the years, with 50 companies listed on the Main Board with an overall market capitalisation of N$2.1 trillion as at June 2023, Bank on Namibia Governor, Johannes Gawaxab has said.
This makes the NSX among the top five exchanges on the African continent in terms of market capitalisation.
“The NSX is currently in the process of launching a bond trading system that will further increase liquidity in the bond market. Namibia’s first Central Securities Depository to allow investors across the globe to participate in Namibia’s capital markets will soon be launched.
“Once registered, it will introduce better efficiency and transparency in the trading of Namibian securities while simultaneously reducing the associated risks. As an issuer, the State is further committed to leveraging off technology to provide retail investment avenues that speak to the Namibian experience while fortifying defenses against emerging financial risks,” he said further.
Gawaxab went on to say that Namibia’s financial sector is recognised as one of the most sophisticated and modernized on the continent.
“The banking sector is characterised by high levels of profitability, maturity, and adequate capitalisation. In recent times, the government and regulators have invested considerable resources into addressing some gaps, especially on the inclusion and transformation front, to ensure we have a banking industry that works for Namibia. We have made great strides in updating our regulatory framework by amending old laws and providing greater harmonisation across the various agencies and policies at play in the financial space,” he said adding that both the public and private sector have played a pivotal role in expanding the types of instruments on offer in local capital markets.
The Namibian government has introduced an inflation-linked bond class in the last decade and remains one of the few in the region to have done so.
Furthermore, there has recently been the listing of a key government asset by way of Mobile Telecommunications Company (MTC), a public enterprise, on the Namibia Stock Exchange (NSX) in 2021.
“This historic N$2.7 billion listing represents the largest capital raising on Namibia’s Stock Exchange (NSX) and was the first by a state-owned enterprise. On the private sector side, we’ve had five listings of Green or ESG bonds spearheaded by three of our local commercial banks.”
Gawaxab went on to say that domestic savings are necessary for economic growth, as they provide the resources needed for investments. According to the Official Monetary and Financial Institutions Forum’s (OMFIF) latest Africa Financial Markets Index, Namibia had the largest pension holdings per capita on the continent for the third consecutive year in 2021.
At the end of March 2023, the country’s non-bank financial institutions sector assets stood at N$381.8 billion of which total retirement fund assets amounted to N$216.7 billion (USD14.6 billion) with N$106.4 billion being held locally – providing a base to facilitate growth and innovation of the local capital market.
It remains imperative that Namibian savings are optimally channelled and utilised to develop the domestic economy.
Looking forward, Gawaxab also noted that the future of Namibia’s economy looks bright.
“Namibia is perfectly positioned to meet the world’s energy demand as it develops its green hydrogen and oil and gas industries. Namibia aspires to produce hydrogen and its derivatives at highly competitive costs and create an at-scale green fuels industry that will serve markets in Europe, China, Japan, South Korea, and other parts of the world. At scale, the hydrogen industry could grow Namibia’s economy substantially. By 2030, it could contribute US$4.1 billion to GDP, 32 percent more than 2030 GDP estimates with no hydrogen industry. The industry also stands to create an estimated 18,000 jobs,” he said.
In April 2023, Namibia’s third significant light oil discovery was announced, marking yet another success in a series of discoveries in the Orange Basin over the past year.
“The nascent oil and gas sector has the potential to profoundly reshape the nation’s economic landscape, as at least 3 billion barrels in oil reserves have been discovered within Namibia’s borders. Notably, three of the country’s oil discoveries rank among the world’s top 30 largest deepwater oil discoveries since 2015. Once commercial viability has been proven, production is set to commence within the next four to six years.”
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