‘Right man for the job’

Jo-Maré Duddy – Analysts yesterday overwhelming welcomed the appointment of Iipumbu Shiimi as Namibia’s seventh minister of finance, but pointed out that he will have to act on a number of issues urgently.President Hage Geingob on Sunday evening named Shiimi, until now the governor of the Bank of Namibia (BoN), as one of his eight presidential appointments to the National Assembly. Shortly afterwards the news followed that Shiimi would replace Calle Schlettwein as minister of finance. Schlettwein is the new minister of agriculture, water and land reform.“On paper, he is probably one of the best-qualified people for the job,” Dylan van Wyk of IJG Securities commented yesterday.Among “a plethora of other academic achievements”, Van Wyk pointed out, Shiimi holds a master’s degree in financial economics from the University of London. He was appointed as the fifth governor of the BoN in 2010, following in the footsteps of Tom Alweendo.“We hold the governor in very high regard, both with regards to his technical expertise, as well as his honesty and decency as a person,” Rowland Brown of Cirrus Capital told Market Watch yesterday.“We believe that he is an excellent appointment, and has a good grasp of what needs to be done to extricate Namibia from the current recession, tackle the major and immediate Covid-19 challenges, and to support growth and job creation and get the country back onto a positive development path long term,” Brown said.‘Pleasant surprise’The change of finance minister came as a pleasant surprise, Van Wyk said. “His long tenure at Bank of Namibia has given him valuable experience as his responsibilities included managing foreign exchange reserves, banking supervision, economic stability and financial monitoring,” he added.According to Van Wyk, Shiimi’s experience at the central bank “will be extremely beneficial in steering the country’s economy in the right direction and will make sure that we have eyes on the most important metrics of the economy’s health”.Shiimi’s time at the BoN clearly showed that he has the “interest of growing the economy in mind, but also ensuring that that growth benefits the population as a whole,” Brown said. “It is clear that he understands that a growth, employment (household income) and government revenue recovery will require investment into the economy, and that the policy environment in the country needs to be conducive for such an economic recovery,” he said.‘Extreme challenges’Ministers appointed to the economy-related and health portfolios face immediate and extreme challenges, the executive director of the Institute of Public Policy Research (IPPR), Graham Hopwood, said.Shiimi faces “a number of urgent issues and will have to come up with a budget that somehow provides stimulus during the Covid-19 pandemic while not bankrupting the country”, Hopwood said. There is an urgent need to formulate an economic plan to counter the effects of the pandemic, he continued. “While Shiimi is broadly respected and has technical expertise he has not faced these kinds of headaches while at the Bank of Namibia. He will have to be his own man and be strong when facing various spending demands from more experienced cabinet colleagues,” Hopwood said.The new finance minister will have to start negotiating with multilateral bodies and banks as regards what is needed to get the economy through this crisis and to protect the most vulnerable, he added. “We haven't left ourselves much room for manoeuvre due to our lack of reserves and high debt levels,” Hopwood said.‘Large risk’Brown said while Cirrus is “very positive about this appointment, we are cognisant that the finance minister does not act alone”.“There remains a large risk that other policy makers in the country further derail recovery by continuing to push an anti-investment, anti-private sector agenda,” he said.Shiimi’s success of his tenure as finance minister will be directly linked to his ability to drive investor-friendly policy reform, as well as improved capital allocation for the sizable budget funds, towards pro-poor, pro-development objective, Brown said.Shiimi’s first test will be the tabling of the budget for 2020/21.Schlettwein last week told Market Watch that the new budget will be tabled before 1 April, as it is a constitutional requirement.At the time of going to press yesterday, Shiimi was not available to confirm this.Mover at the BoNShiimi left the BoN by calling a special meeting of the monetary policy committee (MPC) on Friday and announcing a drop of 100 basis points in the repo rate to 5.25% - only a day after the South African Reserve Bank (SARB) did the same.By doing so, Shiimi forced local commercial banks to lower their prime-lending rates earlier, pumping about N$1 billion extra cash into the pockets of consumers and businesses this year as Namibia battles the impact of the Covid-19 outbreak.Van Wyk describes this as a “good example of the new minister’s decisiveness”.While he was heading the BoN, Shiimi got commercial banks to narrow the spread between their prime-lending rate and the repo rate.He introduced the basic bank account, which exempted low-income earners from bank and management fees. He also set standards for cash deposit fees to stimulate savings and help small businesses.When consumers’ unproductive borrowing went through the roof, he enforced compulsory deposits and shorter re-payment periods for instalment sales.To cool down the housing market, loan-to-value ratios were introduced. Shiimi relaxed these last year to curb the impact of the recession on the property market.CareerA trained economist, Shiimi’s career started as a junior researcher at the Namibia Economic Policy Research Unit (Nepru) in 1994. He joined the BoN in 1995 as a senior researcher in the banks research department and became a manager of the economics division in the same department in 1997.In 1999, he became a manager of the modelling and forecasting division in the BoN’s research department. A year later, Shiimi took over as manager of the statistics division in the department.In 2001, he became the deputy head of research department. A year later he was the chief economist and head of the department.Shiimi became a senior manager in the banking supervision department of the BoN in June 2006. In November the same year, he was appointed as the assistant governor responsible for overseeing the reserve management, banking supervision, financial stability and financial intelligence functions of the BoN.He occupied this position until March 2010 when he was appointed as governor of the BoN.“Although the role of finance minister will undoubtedly be tremendously challenging, especially given the current economic environment, I believe the president’s decision has left us in very good hands,” Van Wyk said.

‘Right man for the job’

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