Welwitschia fund builds up N$508 million
Namibia’s Welwitschia Fund has more than doubled from its initial N$260 million seed capital to over N$508 million, as the government moves towards putting the country’s sovereign wealth fund on a firm legislative footing.
The Ministry of Finance and Public Enterprises disclosed the growth on Tuesday while briefing the Standing Committee on Economy and Industry, Public Administration and Planning on the fund’s progress, structure and proposed financing model.
Launched in May 2022, the Welwitschia Fund is intended to build national savings that can serve as a fiscal buffer during difficult economic periods while also supporting the country’s developmental objectives. The fund is structured around two accounts, the Intergenerational Savings Account and the Stabilisation Account with each serving a different purpose. The Intergenerational Savings Account is designed to preserve part of the country’s resource-derived revenue for future generations. It is funded through mineral royalties, oil and gas revenue, as well as proceeds from the sale of public assets.
According to the ministry, 15% of mineral royalties and 33% of proceeds from the sale of public assets are allocated to the account, alongside revenue from oil and gas. The Stabilisation Account, meanwhile, is intended to shield the national budget from revenue volatility by saving part of the income generated during stronger economic periods. Its funding includes SACU receipts and excess natural-resource revenue. The ministry stressed that the Welwitschia Fund is not financed through new taxes. Instead, its funding comes from existing revenue streams and, as such, does not create an additional burden on the national budget.
A key proposal emerging from the ministry’s benchmarking of sovereign wealth funds is a 70:30 share ratio for oil revenue, with the larger share going to the Welwitschia Fund. The proposal follows a comparison with Norway, which has the world’s largest sovereign wealth fund, valued at more than US$2.3 trillion. Norway’s model sees nearly all its oil revenue channelled into its sovereign fund, with a portion subsequently allocated to the national budget. However, the ministry acknowledged that Namibia’s development trajectory differs from Norway’s and that the country faces significant developmental funding needs. Namibia therefore cannot afford to direct all its oil revenue into the sovereign fund, making the proposed 70:30 model an attempt to balance long-term savings with immediate developmental requirements.
The Welwitschia Fund’s governance framework is shared among Parliament, the Ministry of Finance, a Board of Directors, an Investment Committee and the Bank of Namibia. The central bank is expected to serve as the fund’s administrator, overseeing its day-to-day operational management. The legislative framework for the fund is also moving closer to completion. The Sovereign Wealth Fund of Namibia Bill, which will establish and govern the Welwitschia Fund once enacted, is currently with the Ministry of Finance for final review. The ministry expects the draft legislation to be tabled in Parliament later this year, paving the way for the fund to operate under a dedicated legal framework.
With its value now exceeding N$508 million, the Welwitschia Fund is being positioned as both a long-term savings mechanism for future generations and a financial buffer intended to help Namibia navigate periods of economic volatility while continuing to meet its development needs.
