“They say money talks, but in a world full of socially-conscious consumers and investors, money speaks to the values of those who hold it. That’s Conscious Capital.” - Chuka Okafor.
“Plan for the future, because that’s where you’re going to spend the rest of your life,” Mark Twain rightfully said. In other words, the future is what we should always be conscious of. Therefore, ensuring that our investments enable the development of economies in the long term is of great importance. It is no surprise that long-term in the investment industry is synonymous with infrastructure. This asset class is vital for the growth and prosperity of any economy.
The quality, access and affordability of infrastructure – both physical and digital – are determinants of growth, equity and access to opportunities. Investment assets typically include hard infrastructure, namely transport (e.g. rail, road, ports, bridges), utilities (e.g. energy distribution networks, storage, power generation, waste management), communication (transmission towers, satellites, cable networks). Soft infrastructure includes social investment such as schools, hospitals and housing.
In Namibia, there is a gap between the nation’s infrastructure requirements and the readiness and bankability of infrastructure projects. Local and global capital is, waiting on the side lines for these projects to become bankable. In the meantime, new pressures to securing financing are emerging. The providers of capital prioritise sustainability and demand a conducive policy environment to ensure that their investments not just thrive, but add value to a much broad base of stakeholders. To meet these criteria will require a collective effort, and such an approach will aid in ultimately mobilising the capital required to meet the country’s infrastructure demand.
Already, some mining operators are taking the initiative with respect to water security and renewable energy, while Government is progressing policies towards an enabling environment, including public-private partnerships. The need for sustainability should not be underestimated. Trends towards sustainability are emerging everywhere, including the investors and owners of capital, who use capital to advocate for more sustainable and socially responsible practices.
Ultimately, infrastructure has become an important asset class in Namibia and there is a growing number of specialist products, funds, structures and businesses setup to satisfy the high demand for infrastructure, but this requires a team effort.
While public debt remains a constraint, engagements with the investment community indicate that there is capital and expertise available in the private sector that could potentially assist in meeting Namibia’s infrastructure needs. This is a call to mining operators, project developers and policy makers/enablers to do what is best for our People and Planet while adding to Profits through valuable and long-term Partnerships. These are the four Ps that offer a path to sustainable infrastructure investments in Namibia. Through successful partnerships, the government and investors will make it possible to deliver first-class infrastructure that benefits investors and users. To close the infrastructure gap and source the abundant human and financial capital required, policymakers, private investors and operators need to work together. Global capital and expertise are waiting on the side lines – we should invite them in.
Chuka is an Investment Banker at RMB Namibia.