It has been confirmed that president Hage Geingob has signed the Financial Institutions and Markets (FIM) Act into law.

This brings the tedious process to push through legislation that took over 10 years to finalise to an end.

Ministry of finance spokesperson Tonateni Shidhudhu has confirmed that the president has indeed signed the code which seeks to consolidate and harmonise the laws regulating financial institutions, financial intermediaries and financial markets in Namibia.

Gazetting this, however, still remains.

“We have already submitted to the Ministry of Justice for gazetting. Last week, they indicated it will be gazetted this week,” Shidhudhu said.

It is still not clear when the possible effective date for the application would be, however, the Namibia Financial Institutions Supervisory Authority (Namfisa) last week said after gazetting it would notify the industry and stakeholders.

After this the regulator would activate the FIM Act implementation plan, which would see formal consultations of drafted regulations issued under the act.

In 2019, the regulator’s chief executive officer (CEO) Kenneth Matomola said all regulations and standards to be issued were only waiting for lawmakers to pass the bill into law.

The law will bring the current regulatory framework up to date to ensure that market and systemic risks are effectively deterred and managed, and that the industry contributes optimally to national development objectives.

Moreover, the legislative framework will balance, among other things, business growth, domestic, economic and financial market development, as well as the risk-based supervision framework for the industry.

Fprmer finance minister Calle Schlettwein described the laws governing this interconnected sector, some as old as 50 years, as archaic.

Currently, supervision of non-banking financial institutions is undertaken through various stand-alone laws, such as the Pension Funds Act of 1956, the Usury Act of 1968, the Unit Trusts Control Act of 1981, the Stock Exchanges Control Act of 1985, the Medical Aid Funds Act of 1995, and the Short-term and the long-term insurance acts.

The non-banking financial sector, of which the asset base is about twice the size of the gross domestic product, standing at N$339,8 billion by the end of last year, plays a key role in the country’s economy and the stability of the financial system.

In line with the current Namfisa Act, it would also be under this law that the regulator would ensure consumer protection by enforcing the laws under its administration and the ongoing consumer education initiatives.

Several benefits of the FIM Act include the simplification of insurance policy contracts, which would now need to be written in plain and simple language.

Former finance minister Calle Schletwein has said international bodies, such as the International Monetary Fund, World Bank Group and the parliamentary standing committee on economics, natural resources and public administration, as well as the non-banking financial sector were all consulted to provide inputs on the code.

Some analysts and pension specialists have over the last few years said the FIM Act could have negative consequences for the pension industry, and ultimately the amount of money people receive as payouts during their retirement years.

The non-banking sector includes pension funds, friendly societies, microlenders, asset managers, unlisted investment managers, special purpose vehicles, collective investment schemes, linked investment service providers, stock exchanges, medical aid funds, insurance brokers and agents.

It is often said that the current laws also do not encourage innovation and entrepreneurship, as they have failed to enhance the deepening of the financial market to create more business opportunities.

It appears the tide has finally turned.

Read More: @AllAfrica