Allexer Namundjembo
The Financial Institutions and Markets Act (FIMA), which faced criticism and was put on hold last year, is now on the verge of being re-tabled in Parliament following the recommendation of the Parliamentary Standing Committee on Budget and Finance.
The committee urged the finance minister to implement the bill without further delay.
The chairperson of the committee, Phillipus Katamelo, presented the recommendation in Parliament yesterday, emphasising the urgent need for swift action.
Katamelo, in his address, stressed the importance of implementing the FIMA regulations within 90 days.
“Allow me to also state the need for a speedy implementation of the FIMA recommendation. It is high time that the recommendations as contained in the FIMA report be enforced and implemented,” Katamelo stated.
The committee has specifically recommended that the finance minister table the regulations referred to in Section 465 of the FIMA Act before Parliament for approval before NAMFISA can proceed with their enforcement.
Section 465 concerns the publication of financial statements by registered insurers and reinsurers, requiring a clear disclaimer that the figures have not been verified by NAMFISA.
Furthermore, the committee proposed that all future bills should include clauses requiring the finance minister to table regulations in the National Assembly for parliamentary approval before enforcement.
“This recommendation aims to ensure greater transparency and accountability in the regulatory process. The committee also highlighted that mortgage bonds on dwelling houses, including land, should be secured by a pledge of benefits as specified in certain regulations,” one of the recommendations reads.
The FIMA Act has been a point of contention in Namibia, facing criticism from various sectors, including financial institutions, industry experts, and political leaders.
One of the main criticisms was that the bill could lead to overregulation, imposing additional compliance burdens on financial institutions, particularly smaller entities.
Critics expressed concerns that these additional regulatory requirements could lead to higher operational costs, potentially stifling innovation and economic growth in the financial sector.
Another key point of contention was the lack of consultation during the drafting phase.
Stakeholders, including banks, insurance companies, and pension funds, felt their concerns were not adequately addressed.
There was also fear that the bill might discourage both local and foreign investment, as the regulatory framework appeared overly restrictive.
Job Amupanda, the leader of the Affirmative Repositioning (AR), was particularly vocal about the potential negative impact of the bill on ordinary Namibians.
He argued that it could reduce accessibility to financial services and increase economic inequality by favouring larger financial institutions.
In response to the backlash, Ipumbu Shiimi, the minister of finance and public enterprises, decided to put the bill on hold for further review.
This decision allowed for additional consultations to address concerns and ensure a more balanced approach.
