By Lazarus Amukeshe, Nghinomenwa Erastus and Shinovene Immanuel | 22 April 2020
NEWLY appointed Bank of Namibia governor Johannes !Gawaxab said his investment companies are not regulated by the central bank nor dominate the financial market, but he will ensure he is not conflicted when he takes charge.
The 64 year-old !Gawaxab is a player in the Namibian economy which he is set to regulate in his new position.
He has been a fund manager, involved in education, manufacturing and a funeral undertaking.
President Hage Geingob announced !Gawaxab’s appointment yesterday, saying he will complete former governor Iipumbu Shiimi’s remaining term of 18 months which ends in December 2021.
Geingob said !Gawaxab’s experience in the financial sector spanning 27 years is needed.
“I have confidence in your abilities to execute the demanding tasks before you,” the president said.
Geingob said he hopes the new governor will work closely with finance minister Iipumbu Shiimi when he takes office on 1 June 2020.
CENTRAL BANK BUSINESSMAN
!Gawaxab co-founded Eos Capital Namibia in 2015, a company that manages about N$93,8 million of the Government Institutions Pension Fund money through privately-owned Allegrow Fund.
Investments under Gawaxab’s Eos Capital includes Elso Holdings, Fabupharm (Pty) Ltd, Welwitschia Private School, former Avbob Namibia [now Nambob], Heat Exchange Products & Namibia Aqua Mechanica and other smaller companies.
!Gawaxab yesterday told The Namibian his business interests are not in conflict with his job at the central bank.
“My firm is a private equity firm. We don’t play in the capital market. We are not on the stock exchange, bond market or participating in the money market,” he said.
According to Eljota Investments Namibia’s website !Gawaxab is also its founder and principal officer.
Eljota is an asset management company dealing in government bonds among other financial products.
The former Air Namibia manager said he will quit directorship on all boards in and outside of the country within the next six weeks as dictated by the Bank of Namibia Act.
“The Bank of Namibia Act is quite clear, the governor should not have conflicting interests,” !Gawaxab said.
“I have responded to serve the nation and accepted. I decided to subordinate self-interest to national interest,” he said.
He said he will ensure businesses like Eos Capital do not clash with his new mandate.
“Eos Capital is an unlisted fund management, a private equity fund that buys in little companies. We are not buying government bonds, treasury bills [and] we are not playing in that market,” he said.
!Gawaxab insisted all six his companies have nothing to do with the bond or capital market.
Geingob’s decision to appoint !Gawaxab ends a long-held history of appointing assistant governors to run Namibia’s central bank.
Former central bank chief Tom Alweendo was appointed as governor after serving as a deputy from 1993 to 1996.
Shiimi served as assistant governor from 2006 to 2010 when he was promoted.
Current Bank of Namibia assistant governor Ebson Uanguta, who deputised as Shiimi’s assistant since 2010, appears to have been sidelined.
Geingob’s administration changed the law in February this year to remove the clause that prohibited a person over the age of 65 to lead the Bank of Namibia.
The Bank of Namibia serves as the government’s bank, whose function includes borrowing and servicing national debt on behalf of the state.
It also advises the government on financial issues and is the custodian of the country’s monetary policy.
The central bank also regulates commercial banks to maintain credit and financial stability.
As Bank of Namibia chief, !Gawaxab will now lead the anti-money laundering council which manages the Financial Intelligence Centre (FIC).
The FIC is a key entity in high-profile corruption cases such as the Fishrot scandal.
!Gawaxab is also the chairperson of the high level panel on economic growth. The panel which was appointed in 2019 by president Hage Geingob to initiate proposals on how the government could address a multitude of economic challenges in the country.
REACTION
Several economists declined to comment on !Gawaxab’s appointment.
Namibia University of Science and Technology economics lecturer Eden Shipanga said !Gawaxab’s background in leading the southern African Old Mutual conglomerate provides some hope of recovering the local economy.
“However, his late involvement in the affairs of the Social Security Commission leaves one with mixed feelings as to whether he is still the same principled man who was among the top leading executives this country could have ever produced,” he said.
“In the current administration, it seems everyone is losing their honesty and principles, and begins to dance to the tunes of political spheres of the world,” he said.
Despite that, Shipanga called for !Gawaxab to be given the benefit of the doubt.
Senior lecturer at the University of Namibia, Omu Kakujaha-Matundu, who also served on the central bank board of directors, said !Gawaxab brings a wealth of business experience to the bank, “but I don’t think he knows much about central banking”.
He added that the businessman, unfortunately, comes at a time when central banks are pivotal in crafting stimulus packages amid Covid-19.
Matundu said having an individual with a lot of local business interests could lead to self-interested rent-seeking decisionmaking and policies.
Local economist Indileni Nanghonga said !Gawaxab’s appointment did not come as a surprise.
“I think the knowledge and past experience he has on the market will come in handy,” she said.
BLAST FROM THE PAST
!Gawaxab’s record at running parastatal boards has been under scrutiny at entities such as the Social Security Commision and the National Petroleum Corporation of Namibia.
In 2016, his tenure at the Social Security Commission was marred with allegations that he took part in discussions of a N$46 million contract that involved a Chinese state-owned company which partnered with his daughter Taschiona.
That same year, the government approved the transfer of N$11,3 million from the Social Security Commission for the “struggle kids”.
In 2017, !Gawaxab insisted the commission did nothing wrong when it paid N$36 million for plots estimated to be worth N$15 million.
The former Old Mutual Africa boss maintained he turned around the national oil company’s financial fortunes.
The Namibian reported three years ago !Gawaxab’s daughter Taschiona, who is currently a board member at MTC, which is set to sell its shares to the public, allegedly tried to benefit from the N$23 billion Kudu gas project but failed.
!Gawaxab denied the allegations at the time.
