Development agency fails to turn a profit

The Namibia Industrial Development Agency (NIDA) has failed to turn a profit since 2020, its recently released set of financial results have shown. The agency this week laid bare its financial statements, giving a glimpse into its state of affairs, and illustrated that it has been unable to reign in expenses despite a growth in its assets. The agency this week reported a loss of N$102 million for its financial year-end. Total costs continued to increase overall and moved from N$181 million to N$231million in 2024.The average increase in costs overlapped the movement in income over the 6 years.The entity has remained in a loss position since the last profit figure of N$33 million in 2020 while inefficient processes and lack of capacity continued to negatively impact profitability, a presentation by the agency’s consultant chief financial officer Julius Nghikevali, showed. NIDA’s cost-to-income ratio, an efficiency indicator, remained high at an average of 143%. The agency also noted that revenue diversification had not effectively been dealt with. In 2024, NIDA’s main sources of income included agri-business sales (N$31 million), property rentals (N$44 million), dividends and interest income (N$42 million), government grants (N$26 million), and breeding gains (N$19 million). While these income streams have shown some growth, they remained insufficient to offset the agency’s increasing cost structure. Moreover, government grants still constituted a notable portion of NIDA’s income, raising concerns about long-term self-sustainability, Nghikevali said. While foreign direct investment (FDI) inflows into Namibia reached an all-time high of N$43.2 billion in 2023, NIDA’s ability to attract and facilitate a significant share of these funds remains under scrutiny.Finance minister Ipumbu Shiimi questioned why the company was not able to make any profit off its assets. “You have three periods of assets and do not require additional capital. What you need is working capital, not equity capital. These assets must be productive and generate cash to ensure the business’s sustainability. Capitalisation is unnecessary, as you already possess ample cash,” Shiimi said. Property valuationA nationwide property valuation conducted in late 2024 further revalued NIDA’s total assets at N$3 billion, a substantial appreciation from its previous book value of N$868 million. This growth in investment properties, however, has not necessarily translated into stronger financial performance. While shareholders’ equity increased by 20% to N$1.12 billion, liabilities more than doubled to N$248 million. The rising liabilities pushed NIDA’s gearing ratio to 22%, and its current ratio, which reflects liquidity health, dropped significantly from 79% in 2019 to 50% in 2024. These figures signal a growing strain on cash flow management and operational sustainability.Over this period, NIDA’s total assets grew by 30%, reaching N$1.37 billion. This surge was largely driven by a 73% increase in investment properties, which now stand at N$789 million. Cabinet in 2015 approved the establishment of NIDA, which will incorporate the NDC and the ODC, as well as their two boards of directors, to include representation from government ministries and agencies and the private sector.The agency is tasked to generate operating revenue from project management and implementation on behalf of the government; develop business infrastructure; be responsible for production operations in agriculture and sourcing of loan financing through development financing institutions; and co-investment in key projects by other public- or private-sector partners.

Development agency fails to turn a profit

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Republikein 2026-03-20

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Development agency fails to turn a profit

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Republikein 2026-03-20

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