Namibia CBank Governor: Funds outflow worrying

* CBank says outflows at $1.27 bln year-to-date

* Wants local ownership of commercial banks

WINDHOEK, Oct 28 (BestGrowthStock) – Namibia’s central bank
Governor Ipumbu Shiimi said on Thursday the outflow of funds
from the southern African nation is worrying and urged banks to
provide quality services to the poor and small- and
medium-sized businesses.

In his annual address, Shiimi said year-to-date outflows
have risen to 8.9 billion Namibian dollars ($1.27 billion) from
7.7 billion Namibian dollars last year.

“This trend is disheartening, especially for a country that
exports national savings to other countries on a daily basis
… Imagine what the impact could have been had we retained
just a fraction of that money for investment within the
domestic economy,” said Shiimi.

Shiimi’s address also signalled a tougher stance on
financial institutions whose services are out of reach of 51
percent of the population and emphasised local ownership of
commercial banks.

“Local ownership and management control is a necessary
factor in enhancing credit extension as local persons know the
domestic conditions,” he said.

The central bank in July blocked South Africa’s Absa
Group’s (ASAJ.J: ) bid to gain control of Capricorn Investment
Holdings, Namibia’s biggest bank, citing a need for local
ownership of banks. [ID:nLDE6611MK]

Shiimi’s address came days after banks in the country gave
in to his ultimatum to reduce the spread between the repo and
prime lending rates and follow the Bank of Namibia’s demand to
make banking rates more transparent.

Although Namibia’s banking system is internationally
regarded highly, its rates are seen as prohibitive by many
Namibians.

Namibia, a key commodities exporter, last week cut its base
rate for the first time since June 2009, moving to counter
risks to domestic growth stemming from the uncertain global
outlook. [ID:nLDE69J1BD]
(Reporting by Servaas van den Bosch, Editing by Olivia
Kumwenda and Dan Grebler)

Namibia CBank Governor: Funds outflow worrying