The Namibia Stock Exchange (NSX) is now among the top five exchanges on the African continent by market capitalisation, the central bank has said.
The local bourse, according to the apex bank, has significantly grown over the years, with 50 listed companies on the main board, having an aggregate value of N$2,1 trillion.
Speaking at the Bloomberg Namibia in focus event with an emphasis on safeguarding stability in a changing world, Bank of Namibia governor Johannes !Gawaxab said the NSX’s planned launch of a bond trading system 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,” he said.
“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 defences against emerging financial risks.”
!Gawaxab attributed the growth to both the public and private sectors for playing a pivotal role in expanding the types of instruments on offer in local capital markets.
“There has recently been the listing of a key government asset by way of Mobile Telecommunications Company (MTC), a public enterprise, on the NSX in 2021. This historic N$2,7-billion listing represents the largest capital raising on NSX and was the first by a state-owned enterprise. On the private sector side, we have had five listings of Green or ESG bonds spearheaded by three of our local commercial banks,” said !Gawaxab.
This helped save the domestic economy by providing enough resources needed for investments, he added.
“It remains imperative that Namibian savings are optimally channelled and utilised to develop the domestic economy.
The country’s public debt management approach is based on prudence; as a result, the majority of Namibia’s public debt is funded locally, minimising external vulnerabilities, supporting local financial markets and fostering financial self-sufficiency,” he said.
The strategy will further enhance sovereign sway over the country’s debt management as it reduces dependency on policy actions taken by other countries or international financial institutions.
“As at the end of August 2023, Namibia’s total public debt stood at N$146,5 billion, and N$109,8 billion (75%) of this is funded domestically,” he noted.
According to the Official Monetary and Financial Institutions Forum’s 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-banking financial institutions sector assets stood at N$381,8 billion, of which total retirement fund assets amounted to N$216,7 billion (US$14,6 billion) with N$106,4 billion being held locally, providing a base to facilitate growth and innovation of the local capital market.
“As we take stock, we must also acknowledge the challenges. No journey is without its rugged terrains, and Namibia’s path to foster economic development is no exception.
Gross Fixed Capital Formation (GFCF) is considered a meaningful indicator of future business activity, confidence and economic growth.
Notably, GFCF’s direct contribution to Namibian GDP fell from a high of 34% in 2014 to 14,5% by 2022, which likely explains why the Namibian economy has struggled to emulate the robust growth rates it experienced between 2010 and 2015 over much of the past seven years,” he said.
In addition, !Gawaxab said in 2022, the largest contributing sectors to GFCF in Namibia were mining and quarrying (28,5%), finance and real estate (18,6%), and manufacturing (17,2%), where the three sectors collectively accounted for over a third of Namibia’s GDP.
According to Cirrus Securities, the NSX’s local board saw a total of N$609,6 million traded last year.
This according to Cirrus, was the fifth highest amount traded since 2012.
– The Brief
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