Auditor general Junias Kandjeke says someone should be held accountable for the N$600 million allegedly lost from the public service’s pension fund after some loan beneficiaries of the fund did not pay back money they had borrowed.
Kandjeke made these remarks on Sunday when asked by The Namibian about the role of his office in tracking the money that disappeared from the Government Institutions Pension Fund (GIPF) though loans made to companies owned by a coterie of Namibian politically connected businesses.
Prosecutor general Martha Imalwa announced last week that N$600 million from the GIPF is lost and would not be recovered because of a lack of evidence.
The GIPF issued a statement on Friday, saying the state pension fund lost N$386 million, and not N$600 million.
Kandjeke said: “I can’t comment on the prosecutor general’s issue [announcement] because I don’t know which information was provided to her”.
The auditor general – who is often described as toothless for lack of action on his reports – is constitutionally tasked with inspecting the government’s finances.
Kandjeke said he produced a forensic report into the GIPF several years ago for the Cabinet and former president Hifikepunye Pohamba.
“I did my report a long time ago. Made the presentation to former president [Pohamba], and I presented facts based on terms of reference,” he stated.
He added: “My report also showed who paid back, and who didn’t.”
Past media reports estimated that the amount likely lost from the state pension fund could be as high as N$1,8 billion.
Asked if the lost money could be higher, Kandjeke, responded “yes, mathematically, there is more money that came in than the capital of N$600 million. Plus interest, [it] can be more. Then again, minus payments of capital and interest”.
“But that is not the point in terms of accountability and governance because some have not paid back at all. Someone must answer. This is private money for individual public servants, and someone cannot just get it for free,” he stressed.
The National Union of Namibian Workers (NUNW) decided in 2010 that the GIPF board of trustees – many of whom have since left – and management should be dismissed, and that the recipients of default loan repayments be held accountable for the losses of over N$600 million.
The union federation, then led by firebrand secretary general Evilastus Kaaronda, applied pressure on Pohamba’s administration to hold the culprits accountable.
Instead, Pohamba asked Kandjeke to investigate the GIPF scandal at the end of 2010 to fend off threats of union-led demonstrations in an election year.
Kandjeke completed his report the following year. His report has been kept a secret since 2011 when it was issued to Pohamba. The auditor general said his report can be made public by the Presidency or Cabinet for the sake of transparency.
POISONED CHALICE
The GIPF issued loans worth N$660 million to Namibian politically connected start-up businesses from 1994 to 2002 through what it called the Development Capital Portfolio (DCP). The fund wanted a return of N$950 million, including interest. But these investments turned out to be a poisoned chalice. The state pension fund only got back N$380 million. The rest was written off.
The persons who apparently benefited were retired politicians, prominent business people, senior legal advisers and Cabinet ministers. Namibians only learnt of the lost millions before the DCP was shut down in 2004.
The Namibia Financial Institutions Supervisory Authority (Namfisa) later sanctioned an audit into the matter, and subsequently wrote letters to ex-premier Nahas Angula and then finance minister Saara Kuugongelwa-Amadhila for action.
A Namfisa report done over a decade ago called for the GIPF trustees and management to be removed, and for those responsible for the loss of the money to be held accountable. This was not done.
Another Namfisa report concluded that the DCP was “fatally flawed”, and that many of the N$660 million loans were “concentrated among an ‘old boys’ club’ with the security given not worth the paper it was written on”.
Imalwa’s latest announcement brought the GIPF’s lost millions saga back into the public arena.
“It is regrettable what happened in the GIPF matter. It is a regrettable situation. More than N$600 million got lost in the process. To trace where the money went proved problematic for the investigation,” Imalwa said last week.
Finance minister Calle Schlettwein reacted on his social media account on Friday that “whatever the reasons, it is a sad day for Namibia when we have to admit that an amount of N$600 million [in] pension money cannot be traced, is lost, and we do not know who lost it”.
The GIPF falls under the Office of the Prime Minister, but the finance ministry also exerts some control over it via Namibia’s financial regulator, Namfisa.
TALK IN CIRCLES
The GIPF issued a statement on Friday, which, in a way, tried to downplay the widespread public outcry, saying the state pension fund lost N$386 million from the DCP investments from 1995 to 2004, and not N$600 million.
The GIPF said the value of DCP assets still owned by the GIPF stood at N$988 million in March, with N$458 million in profits having been realised from its DCP investments by March this year.
In the statement, the pension fund said its chief executive officer, David Nuyoma, would consult the Office of the Prosecutor General to understand Imalwa’s decision.
The Namibian Women Lawyers Association also issued a statement last week, threatening the GIPF to come clean, or face legal action.
The association’s chairperson, Ruth Herunga, said the GIPF’s statement paid little attention to the huge losses suffered by the pension fund.
“The GIPF has not informed the public how they intend to recover the pension fund money that was lost, or whether there was ever an attempt to recover such,” she stated.
Herunga asked the GIPF to realise the impact of the N$600 million on its pension members. “We reserve the rights of our members, including private prosecution,” she added.
A private prosecution is a criminal proceeding initiated by an individual or private organisation, instead of a public prosecutor who represents the state.
