Financial innovation facilitates investments
Through a robust regulatory and supervisory framework, banks in Namibia continue to exceed prudential liquidity and capital adequacy requirements
“Namibia has one of the most advanced financial and banking systems on the entire continent, almost on a par with some of the most advanced economies in Europe and in the US in terms of the sophistication.” Vetumbuavi Mungunda, CEO, Standard Bank Namibia
Like many countries, Namibia has been buffeted by economic headwinds in recent years due to the slowdown in the global economy, but is still punching well above its weight. Indeed, its solid fiscal performance has been recognised by leading international financial institutions.
Late last year, a team of experts from the International Monetary Fund (IMF) gave a relatively upbeat view of Namibia’s long-term economic outlook, noting although annual Gross Domestic
Product (GDP) growth has slowed like in many countries, it should rebound shortly and return to the long-term average of three percent per annum.
“Key challenges [for the government] are to continue implementing fiscal consolidation plans to contain public debt dynamics and preserve macroeconomic stability, and pursing reforms to raise long-term growth and job creation,” the report said.
Officials welcomed the report. “Namibia is peaceful and politically and economically stable and has a level of predictability, which is really important,” says Leon Jooste. “We’re on the verge of a massive breakthrough thanks to the leadership of our president, the message he has been sending out, walking the talk, really addressing key issues. The next 5-10 years will be incredibly exciting.”
Colleague Calle Schlettwein agrees: “Namibia is a gateway to southern Africa through its stability, through its infrastructure base, through its reputation internationally as a reliable partner. It provides a very, very good opportunity for investments to be placed here, and to grow from here.”
Acting as a conduit for such domestic and foreign investment is the country’s banking sector and financial systems, regarded by major players like Standard Bank as among the best on the continent.
With extensive operations in nearly two dozen African nations, Standard Bank blends valuable regional experience with a strong physical presence supported by an impressive reach that extends far beyond the continent’s many borders. This allows for its clients and customers—especially those with operations in more than one country on the continent—to trade more conveniently across countries with their subsidiaries, wherever they are in Africa.
“Namibia has one of the most advanced financial and banking systems on the entire continent, almost on a par with some of the most advanced economies in Europe and in the US in terms of the sophistication, but also in terms of the standards to which the financial and banking systems adhere,” states Vetumbuavi Mungunda, CEO of Standard Bank Namibia.
“Our customers that have operations in other countries – they see us as an African bank. We are in 22 African countries, so we are an African bank firstly. Secondly, as an African bank we are really, really committed to the African continent and its growth.
“In Namibia, we are driving a number of initiatives to contribute to growth and deal with the challenges facing Namibia as a country. For example, our Buy-a-brick initiative helps with the construction and provisioning of houses for the low-, or no-income groups. As a developing country, financial inclusion is a critical goal we need to aspire to, so as to introduce more Namibians into the financial system.
“We need to look into ways that are cheaper for them to participate and also more convenient for them. The participation and inclusion of Namibians, especially those currently outside the banking system, will require innovation and digitisation by the banks, which should allow for customers to participate without being physically part of the financial system.”
The senior executive believes the critical success factor for businesses and entrepreneurs is clarity, particularly in relation to policies, property rights, and key policy and legislative developments.
“When you combine all of these factors, the clarity around policies, laws and regulations, as well as how securely these are protected by our courts, it creates a safe environment for investors,” he concludes.