Namibia welcomes foreign investment and provides a strong foundation of stable, democratic governance and good infrastructure on which to build businesses. The Namibian government prioritizes attracting more domestic and foreign investment to stimulate economic growth, combat unemployment, and diversify the economy. The Ministry of Industrialization and Trade (MIT) is the governmental authority primarily responsible for carrying out the provisions of the Foreign Investment Act of 1990 (FIA). In August 2016, Namibia promulgated and gazetted the Namibia Investment Promotion Act (NIPA). However, the country has not yet enforced this Act due to substantive legal concerns raised by the private sector. Therefore, the FIA remains the guiding legislation on investment in Namibia.
The FIA calls for equal treatment of foreign investors and Namibian firms, including the possibility of fair compensation in the event of expropriation, international arbitration of disputes between investors and the government, the right to remit profits, and access to foreign exchange. The government emphasizes the need for investors to partner with Namibian-owned companies and/or have a majority of local employees in order to operate in the country. Namibia’s judiciary is widely regarded as independent.
There are large Chinese foreign investments in Namibia, particularly in the uranium mining sector. South Africa has considerable investments in the diamond mining and banking sectors, while Canada has investment in gold, zinc and lithium. Spain and Russia have investments in the fishing industry. Foreign investors from the United Kingdom, the Netherlands, the United States, and other countries have expressed interest in oil exploration off the Namibian coast. Logistics, manufacturing, and mining for energy minerals also attract FDI.
The investment climate in Namibia is generally positive. Despite global economic disruptions caused by the COVID-19 pandemic, Namibia has maintained political stability and continues to offer key advantages for inward Foreign Direct Investment (FDI): an independent judicial system, protection of property and contractual rights, good quality physical and ICT infrastructure, and easy access to South Africa. Namibia is upgrading its transportation infrastructure to facilitate investment and position itself as a regional logistics hub. An expansion at Walvis Bay Port concluded in 2019, renovations at Hosea Kutako International Airport are ongoing, and there are plans to extend and rehabilitate the national rail line, including to neighboring countries from the port. Namibia has the best roads on the African continent, according to the World Economic Forum. Namibia also has access to the Southern African Customs Union (SACU), the Southern African Development Community’s (SADC) Free Trade Area, and markets in Europe and China. Challenges to FDI in Namibia are a relatively small domestic market, high transport costs, relatively high energy prices, and a limited skilled labor pool. A recent corruption scandal in the fishing sector that resulted in the arrests of ministers and business leaders that tarnished the reputation of the ruling political party and cost Namibia billions has strained public trust and negatively impacted the environment for FDI.
As a post-apartheid country with one of the highest rates of inequality in the world, Namibia continues to look for ways to address historic economic imbalances. Proposed legislation, the New Equitable Economic Empowerment Bill (NEEEB), which the government has been working on for more than a decade, will look to create economic and business opportunities for disadvantaged groups including in areas of ownership, management, human resource development, and value addition. Parliament may pass the bill in 2021, but further delays are possible. Also, the NIPA, although it is not yet in force, includes in Section 14 (c) a provision that investment must be for “…the net benefit to Namibia, taking into account the contribution of the investment to the implementation of programs and policies aimed at redressing social and economic imbalances in Namibia.”
|TI Corruption Perceptions Index||2020||57 of 180||http://www.transparency.org/research/cpi/overview|
|World Bank’s Doing Business Report||2020||104 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2020||104 of 131||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, historical stock positions)||2017||USD -78||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2019||USD 5,060||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD|
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
The Namibian government welcomes increased foreign investment to help develop the national economy and benefit its population. The Foreign Investment Act of 1993 (FIA) currently governs FDI in Namibia and guarantees equal treatment for foreign investors and Namibian firms, including the possibility of fair compensation in the event of expropriation, international arbitration of disputes between investors and the government, the right to remit profits, and access to foreign exchange. Investment and tax incentives are also available for the manufacturing sector. The government prioritizes investment retention and maintains ongoing dialogue with investors including through investment conferences. The government is cognizant that some of its bureaucratic processes (such as the time it takes to get a business visa) impede the ease of doing business and is working to address outstanding challenges. The Namibian Investment Promotion Act has been under review since 2016 to replace the FIA.
The new Namibia Investment Promotion and Development Board (NIPDB) housed in the Office of the President, serves as Namibia’s official investment promotion and facilitation office. The NIPDB is headed by a highly regarded chartered accountant, and analysts are optimistic that this new entity will better facilitate investment in Namibia. The NIPDB is the first point of contact for potential investors, and it offers comprehensive services from the initial inquiry stage through to operational stages. NIPDB Facebook page: https://www.facebook.com/NIPDB; NIPDB Contact: email@example.com . The NIPDB also provides general information packages, coordinates trade delegations, and assists with advice on investment opportunities, incentives, and procedures. The NIPDB is tasked with assisting investors in minimizing bureaucratic red tape, including obtaining work visas for foreign investors, by coordinating with government ministries as well as regulatory bodies.
Limits on Foreign Control and Right to Private Ownership and Establishment
Under the Foreign Investment Act (FIA), foreign and domestic entities may establish and own business enterprises and engage in all forms of remunerative activities. The Ministry of Home Affairs, Immigration, Safety, and Security grants renewable and non-renewable temporary employment permits for a period of up to 12 months for skills not locally or readily available. However, work permits and long-term residence permits are subject to bureaucratic hurdles and are hard to obtain for jobs that could be performed by a Namibian. Complaints about delays in renewing visas and work permits are common.
Foreigners must pay a 10 percent non-resident shareholder tax on dividends. There are no capital gains or marketable securities taxes, although certain capital gains are taxed as normal income. As a member of the Common Monetary Area, the Namibian dollar (NAD) is pegged at parity with the South African rand.
There are no general mandatory limits on foreign ownership, but some sectors have a mandatory joint ownership between a local firm and foreign firm, such as in the natural resources sector. Government procurements usually also require a variable percentage of local ownership.
Other Investment Policy Reviews
Namibia has not undergone any third party investment policy reviews in the last three years by the OECD, WTO, or UNCTAD. The Southern Africa Customs Union (SACU), of which Namibia is a member, was last reviewed by the WTO in 2015.
Foreign and domestic investors may conduct business in the form of a public or private company, branch of a foreign company, closed corporation, partnership, joint venture, or sole trader. Companies are regulated under the 2004 Companies Act, which covers both domestic companies and those incorporated outside Namibia but traded through local branches. To operate in Namibia, businesses must also register with the relevant local authorities, the Workmen’s Compensation Commission, and the Social Security Commission.
Most investors find it helpful to have a local presence or a local partner in order to do business in Namibia, although this is not currently a legal requirement, except in sectors that require a joint venture partner. Companies usually establish business relationships before tender opportunities are announced. The World Bank’s Doing Business 2020 report notes that it takes ten steps and an average of 54 days to start a business in Namibia. Some accounting and law firms provide business registration services.
The Business and Intellectual Property Authority (BIPA) is the primary institution which serves the business community and ensures effective administration of business and intellectual property rights (IPRs) registration. BIPA serves as a one-stop-center for all business and IPR registrations and related matters. It also provides general advisory services and information on business registration and IPRs. Website: http://www.bipa.gov.na/.
Namibia provides incentives for outward investment mainly aimed at stimulating manufacturing, attracting foreign investment to Namibia, and promoting exports. To take advantage of the incentives, companies must be registered with MIT and the Ministry of Finance. Tax and non-tax incentives are accessible to both existing and new manufacturers. Here is the list of the investment incentives: https://www.namibweb.com/tin.htm. Namibia is in the process of creating Special Economic Zones, which will replace the old Export Processing Zone regime, to offer favorable conditions for companies wishing to manufacture and export products.
3. Legal Regime
Transparency of the Regulatory System
Namibia’s legal, regulatory, and accounting systems are relatively transparent and consistent with international norms. Draft bills, proposed legislation, and draft regulations are normally not available for public comment and are not required to be, although there are consultations on such documents throughout the government. Depending on the topic, bills are customarily drafted within the relevant ministry with minimal stakeholder or public consultation and then presented to the parliament for debate. Comments on draft legislation and regulations may also be solicited through public meetings or targeted outreach to stakeholder groups. Such comments are also not required to be made public and generally are not. There is no formal process of appeal or reconsideration of published regulations. Approved legislation and regulations are publicly available and published in the Government Gazette, the official journal of the government of Namibia.
Public finances are generally transparent, with the annual budget and mid-term budget reviews published on the Ministry of Finance’s website and in the Government Gazette. The Ministry of Finance has begun holding consultations with interest groups during the budget preparation process. The Bank of Namibia publishes the government of Namibia’s debt position – including explicit and contingent liabilities – in its annual reports and quarterly bulletins.
International Regulatory Considerations
The national coordinating bureau for standards is the Namibian Standards Institution. Namibia is also a member of the International Organization for Standardization. As a member of SACU and SADC, Namibia’s national regulations conform to both regional agreements. Namibia is a member of the World Trade Organization (WTO) and notifies the Committee on Technical Barriers to Trade on draft technical regulations.
Legal System and Judicial Independence
The Namibian court system is independent and is widely perceived to be free from government interference. Namibia’s legal system, based on Roman Dutch law, is similar to that of South Africa. The system provides effective means to enforce property and contractual rights, but the speed of justice is generally very slow due to a backlog of cases across the judicial spectrum. Regulation and enforcement actions are appealable. Parliament will consider legislation in 2021 that would permit plea bargains to expedite cases and reduce backlog to advance rule of law in Namibia.
Laws and Regulations on Foreign Direct Investment
The Foreign Investment Act (FIA) provides for liberal foreign investment conditions and equal treatment of foreign and local investors. With limited exceptions, all sectors of the economy are open to foreign investment. There is no local participation requirement in the FIA, but the Namibian government is increasingly emphasizing the need for investors to partner with Namibian-owned companies and/or to have a majority of local employees in order to operate in the country.
The FIA reiterates the protection of investment and property provided for in the Namibian Constitution. It also provides for equal treatment of foreign investors and Namibian firms, including the possibility of fair compensation in the event of expropriation, international arbitration of disputes between investors and the government, the right to remit profits, and access to foreign exchange.
The Business and Intellectual Property Agency (BIPA) acts as a one-stop-shop for business registrations and provides information on relevant laws, rules, procedures, and reporting requirement for investors. More information is available at: http://www.bipa.na/ .
The FIA will be replaced by the revised NIPA once revisions are complete and approved by Parliament. The NIPA provides for transparent admission procedures for investors, the reservation of certain categories of business and sectors, and the establishment of an Integrated Client Service Facility or one-stop-shop for investors.
Competition and Antitrust Laws
Established in 2009, the Namibia Competition Commission (NaCC) is the principal institution that promotes and safeguards fair competition in Namibia. The Commission is tasked with: providing consumers with competitive prices and product choices; promoting employment and advancing the social economic welfare of Namibians; expanding opportunities for Namibian participation in world markets while recognizing the role of foreign competition in Namibia; ensuring that small businesses have an equitable opportunity to participate in the Namibian economy; and promoting a greater spread of ownership, in particular to increase ownership stakes of historically disadvantaged persons. The NaCC has the mandate to review any potential mergers and acquisitions that might limit the competitive landscape or adversely impact the Namibian economy. For example, in August 2020, the NaCC blocked the sale of Schwenk Namibia’s stake in Ohorongo Cement to West China Cement Ltd. over fears the deal could lead to anti-competitive behavior in the local cement market. In the ruling, the competition watchdog said that, if the USD 870 million deal was allowed to proceed, it would stifle competition and lead to possible collusion and price-fixing. The Minister of Industrialization and Trade is the final arbiter on merger decisions and may accept or reject a NaCC decision. Any investor can file an appeal with the ministry, though no formal process for doing so has been established.
Expropriation and Compensation
The Namibian Constitution enshrines the right to private property but allows the state to expropriate property in the public interest subject to the payment of just compensation. The Agricultural (Commercial) Land Reform Act 6 of 1995 (ACLRA) is the primary legal mechanism allowing for expropriation, but the government has adhered to a “willing seller/willing buyer” policy as part of land reform programs. In 2004, the government announced it would proceed with land expropriations after much criticism about the slow pace of land reform. To date, the government has only expropriated farms from a small number of owners, and in each instance ultimately either compensated the owner or returned the land. In March 2008, Namibia’s High Court ruled against the government in Gunter Kessl v. Ministry of Lands and Resettlement in the sole instance in which expropriation was legally challenged, and in doing so established a strong legal precedent protecting individual land rights. Non-binding resolutions adopted at the Second National Land Conference in 2018 resolved to abolish the “willing seller/willing buyer” policy and bar foreign-ownership of agricultural land; however, no legislation formalizing these resolutions has been proposed. The Namibian Constitution makes pragmatic provision for different types of economic activity and a “mixed economy” (Article 98), accepts the importance of foreign investment (Article 99), and enshrines the principle that the ownership of natural resources is vested in the Namibian state (Article 100). Section 11 of the FIA reiterates the commitment to market compensation in the case of expropriation in terms of Article 16 of the Constitution. Holders of a Certificate of Status Investment must be compensated in foreign currency and can opt for international arbitration if any disputes arise.
ICSID Convention and New York Convention
Namibia signed but has not ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID). The ICSID and New York Convention are therefore not applicable.
Investor-State Dispute Settlement
The FIA allows for the settlement of disputes by international arbitration for investors that have obtained a Certificate of Status Investment (CSI) that includes a provision for international arbitration. The FIA stipulates that arbitration “shall be in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law in force at the time when the Certificate was issued” unless the CSI stipulated another form of dispute resolution. There have not been any investment disputes involving a U.S. person in the last 10 years.
International Commercial Arbitration and Foreign Courts
As the “one-stop-shop” for investors, the Namibia Investment Promotion and Development Board (NIPDB) is the body that first learns of an investment dispute between a foreign investor and a domestic enterprise. The NIPDB has not yet received a report of an investment dispute involving U.S. entities. Investment disputes can be handled by the courts.
There is no domestic arbitration body in Namibia. Investors without a CSI that encounter a dispute have to address their dispute in the Namibian courts or in the court system which has jurisdiction according to the investor’s contract. The Namibian court system is independent and is widely perceived to be free from government interference, including when SOEs are involved in investment disputes.
The Companies Act of 1973, amended in 2004, governs company and corporate liquidations while the Insolvency Act 12 of 1936, as amended by the Insolvency Amendment Act of 2005, governs insolvent individuals and their estates. The Insolvency Act details sequestration procedures and the rights of creditors. Through the law, all debtors (whether foreign or domestic) may file for both liquidation and reorganization, and a creditor may file for both liquidation and reorganization. As reorganization (judicial management) is rarely successful, however, the most likely insolvency procedure is liquidation. International credit monitoring agency TransUnion is a licensed credit bureau in Namibia. The World Bank’s Doing Business Report ranks Namibia’s resolution of insolvency at 127 out of 190.
4. Industrial Policies
Incentives are mainly aimed at stimulating manufacturing, attracting foreign investment to Namibia, and promoting exports. To take advantage of the incentives, companies must be registered with MIT and the Ministry of Finance. Tax and non-tax incentives are accessible to both existing and new manufacturers. MIT has produced a brochure on Special Incentives for Manufacturers and Exporters that is available from the Namibia Investment Promotion and Development Board.
The Namibian Government aims to stimulate economic growth and employment and to establish Namibia as a gateway location in the Southern African region. To this end, the government has introduced numerous incentives that are largely concentrated on stimulating manufacturing in Namibia and prompting exports into the region and to the rest of the world. General tax regulations that are indicative of the government’s commitment are:
- Non–resident Shareholders’ Tax is only 10%;
- Dividends accruing to Namibian companies or resident shareholders are tax-exempt;
- Plant, machinery and equipment can be fully written off over a period of three years;
- Buildings of non-manufacturing operations can be written off, 20% in the first year and the balance at 4% over the ensuing 20 years;
- Import or purchase of manufacturing machinery and equipment is exempted from Value Added Tax (VAT); and,
- Preferential market access to EU, USA, and other markets for manufacturers is provided.
The government does issue guarantees, but reluctantly. Joint financing for foreign direct investment is occasionally implemented through the Namibia Industrial Development Agency (NIDA) or another, sector-relevant state-owned enterprise.
Foreign Trade Zones/Free Ports/Trade Facilitation
In March 2021, the European Union (EU) removed Namibia from the EU’s list of tax havens after Namibia successfully implemented reforms to bring its tax systems up to the EU’s required standards. The EU had identified the preferential treatment and tax incentives to manufacturers and export processing zones (EPZ) as harmful tax regimes and allowed Namibia until December 31, 2021 to adapt existing legislation. On June 8, 2020 the Namibian government repealed the EPZ that used to offer tax incentives for companies locating in Namibia wishing to manufacture and export products. Namibia is in the process of creating an improved Special Economic Zone (SEZ) which will increase responsiveness to investors’ needs and address the weaknesses of the EPZ regime.
Performance and Data Localization Requirements
The government actively encourages partnerships with historically disadvantaged Namibians. The Equity Commission requires all firms to develop an affirmative action plan for management positions and to report annually on its implementation. Namibia’s Affirmative Action Act of 1998 strives to create equal employment opportunities, improve conditions for the historically disadvantaged, and eliminate discrimination. The Equity Commission facilitates training programs, provides technical and other assistance, and offers expert advice, information, and guidance on implementing affirmative action in the work place.
In certain industries, the government has employed specific techniques to increase Namibian participation. In the fishing sector, for example, companies pay lower quota fees if they operate Namibian-flagged vessels based in Namibia with crews that are predominantly Namibian.
The lengthy and administratively burdensome process of obtaining and renewing work permits in Namibia is among investors’ greatest complaints. Although the government cites the country’s high unemployment rate as its motivation for a strict policy on work permits, Namibia’s labor force does not yet meet many of the skills needed to fill jobs that foreigners currently hold.
Economic empowerment legislation for previously disadvantaged groups, called the New Equitable Economic Empowerment Bill (NEEEB) is under consideration in the legislature. The bill is being reviewed and discussed and could be reintroduced in Parliament during 2021. The bill is likely to contain provisions relating to ownership, management, value addition, human resource capacity building, job creation, and corporate social responsibility that aim to help previously disadvantaged Namibians. While not yet legally bound to do so, many companies in Namibia are already implementing aspects of NEEEB.
The Namibian government does not have “forced localization” requirements for data storage. Domestic content is encouraged. State-owned enterprises are including local ownership/participation.
5. Protection of Property Rights
The Namibian Constitution guarantees all persons the right to acquire, own, and dispose of all forms of property throughout Namibia, but also allows Parliament to make laws concerning expropriation of property (see Expropriation and Compensation Section) and to regulate the right of foreign nationals to own or buy property in Namibia. There are no restrictions on the establishment of private businesses, size of investment, sources of funds, marketing of products, source of technology, or training in Namibia. All deeds of sales are registered with the Deeds Office. Property is usually purchased through real estate agents and most banks provide credit through mortgages. The Namibian Constitution prohibits expropriation without just compensation. In 2020, the World Bank’s Doing Business Report ranked Namibia 173 out of 190 for the ease of registering property.
Intellectual Property Rights
Namibia is a party to the World Intellectual Property Organization (WIPO) Convention, the Berne Convention for the Protection of Literary and Artistic Works, and the Paris Convention for the Protection of Industrial Property. Namibia is also a party to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks and the Patent Cooperation Treaty (PCT). Namibia is a signatory to the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT).
The responsibility for intellectual property rights (IPR) protection is divided among three government ministries. The MIT oversees industrial property and is responsible for the registration of companies, private corporations, patents, trademarks, and designs through its Business and Intellectual Property Authority (BIPA). The Ministry of Information and Communication Technology (MICT) manages copyright protection, while the Ministry of Environment, Forestry and Tourism (MEFT) protects indigenous plant varieties and any associated traditional knowledge of these plants.
Two copyright organizations, the Namibian Society of Composers and Authors of Music (NASCAM) and the Namibian Reproduction Rights Organization (NAMRRO), are the driving forces behind the government’s anti-piracy campaigns. NASCAM administers IPR for authors, composers, and publishers of music. NAMRRO protects all other IPR, including literary, artistic, broadcasting, satellite, traditional knowledge, and folklore.
Namibia is in the process of finalizing its intellectual property legislation, which BIPA will administer.
Namibia is not included in the United States Trade Representative (USTR) Special 301 Report or the Notorious Markets List.
For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .
6. Financial Sector
Capital Markets and Portfolio Investment
There is a free flow of financial resources within Namibia and throughout the Common Monetary Area (CMA) countries of the South African Customs Union (SACU), which include Namibia, Botswana, eSwatini, South Africa, and Lesotho. Capital flows with the rest of the world are relatively free, subject to the South African currency exchange rate. The Namibia Financial Institutions Supervisory Authority (NAMFISA) registers portfolio managers and supervises the actions of the Namibian Stock Exchange (NSX) and other non-banking financial institutions.
Although the NSX is the second-largest stock exchange in Africa, this ranking is largely because many South African firms listed on the Johannesburg exchange are also listed (dual listed) on the NSX. By law, Namibia’s government pension fund and other Namibian funds are required to allocate a certain percentage of their holdings to Namibian investments. Namibia has a world-class banking system that offers all the services needed by a large company. Foreign investors are able to get credit on local market terms.
There are no laws or practices by private firms in Namibia to prohibit foreign investment, participation, or control; nor are there any laws or practices by private firms or government precluding foreign participation in industry standards-setting consortia.
Money and Banking System
Namibia’s central bank, the Bank of Namibia (BON), regulates the banking sector. Namibia has a highly sophisticated and developed commercial banking sector that is comparable with the best in Africa. There are eight commercial banks: Standard Bank, Nedbank Namibia, Bank Windhoek, FNB Namibia, Trustco Bank, Letshego Bank Limited, Banco BIC, and Banco Atlantico. Bank Windhoek and Trustco Bank are the only locally-owned banks, and Trustco Bank specializes in micro-finance. Standard Bank, Nedbank, and FNB are South African subsidiaries, Banco BIC and Banco Atlantico are Angolan. A significant proportion of bank loans come in the form of bonds or mortgages to individuals. There is little or no investment banking activity.
The Development Bank of Namibia (DBN) and Agribank are Namibian government-owned banks with a mandate for development project financing. Agribank’s mandate is specifically in the agriculture sector.
While there are no restrictions on foreigners’ ability to open bank accounts, a non-resident must open a “non-resident” account at a Namibian commercial bank to facilitate loan repayments. This account would normally be funded from abroad or from rentals received on the property purchased, subject to the bank holding the account being provided with a copy of any rental. Non-residents who are in possession of a valid Namibian work permit/permanent residency are considered to be residents for the duration of their work permit and are therefore not subject to borrowing restrictions placed on non-residents without the necessary permits.
The BON does not recognize cryptocurrencies, such as Bitcoin, as legal tender in Namibia. The BON is reluctant to allow the implementation of blockchain technologies in banking transactions.
Foreign Exchange and Remittances
The Namibian dollar is pegged at parity to the South African rand, and rand are accepted as legal tender in Namibia. The FIA offers investors meeting certain eligibility criteria the opportunity to obtain a Certificate of Status Investment (CSI). A “status investor” is entitled to:
- Preferential access to foreign exchange to repay foreign debt, pay royalties and similar charges, and remit branch profits and dividends;
- Preferential access to foreign currency in order to repatriate proceeds from the sale of an enterprise to a Namibian resident;
- Exemption from regulations which might restrict certain business or categories of business to Namibian participation;
- Right to international arbitration in the event of a dispute with the government; and
- Payment of just compensation without undue delay and in freely convertible currency in the event of expropriation.
According to World Bank Development Indicators, remittances to Namibia have been consistently less than 0.15 percent of GDP for at least the last decade. The majority of remittances are processed through commercial banks. There have been no plans to change investment remittance policies in recent times.
Sovereign Wealth Funds
Namibia does not have a Sovereign Wealth Fund (SWF), but the government has publicly stated its intention to create one. The Government Institution Pension Fund (GIPF) provides retirement and benefits for employees in the service of the Namibian government as well as institutions established by an act of the Namibian Parliament.
7. State-Owned Enterprises
While Namibian companies are generally open to foreign investment, government-owned enterprises have generally been closed to all investors (Namibian and foreign), with the exception of joint ventures discussed below. More than 90 State-Owned Enterprises (SOEs, also known as parastatals) include a wide variety of commercial companies, financial institutions, regulatory bodies, educational institutions, boards, and agencies. Generally, employment at SOEs is highly sought after because their remuneration packages are not bound by public service constraints. Parastatals provide most essential services, such as telecommunications, transport, water, and electricity. A list of SOEs can be found on the Ministry of Public Enterprises’ website: www.mpe.gov.na . The following are the most prominent SOEs:
- Namibia Airports Company (airport management company)
- Namibia Institute of Pathology (medical laboratories)
- Namibia Wildlife Resorts (tourism)
- Namport (maritime port authority)
- Nampost (postal and courier services)
- Namwater (water sanitation and provisioning)
- Roads Contractor Company
- Telecom Namibia (primarily fixed-line) and MTC (mobile communications)
- TransNamib (rail company)
- NamPower (electricity generation and transmission)
- Namcor (national petroleum company)
- Epangelo (mining)
The government owns numerous other enterprises, from media ventures to a fishing company. Parastatals own assets worth approximately 40 percent of GDP and most receive subsidies from the government. Most SOEs are perennially unprofitable and have only managed to stay solvent with government subsidies. In industries where private companies compete with SOEs (e.g., tourism and fishing), SOEs are sometimes perceived to receive favorable concessions from the government. Foreign investors have participated in joint ventures with the government in a number of sectors, including mobile telecommunications and mining. In 2015, the Namibian President created a new Ministry of Public Enterprises intended to improve the management and performance of SOEs. Legislation to shift oversight of commercial SOEs from line ministries to the Ministry of Public Enterprises was passed by Parliament in 2019.
In 2021, the government liquidated the state-owned airline, Air Namibia, which had become a financial burden. When the Minister of Finance tabled the budget in March 2021, he announced that the Namibian government will reduce its stake in state-owned enterprises as a way of raising capital, unburdening the government from the budgetary drain of perpetual SOE-bailouts, and giving room for the private sector to play a more prominent role in the economy. The government is looking to reduce its stake or completely divest in certain SOEs, but has not yet made concrete announcements.
Namibia does not have a privatization program, but discussions have begun within the government to consider privatizing certain SOEs. The Minister of Finance has announced that in 2021 the government intends to sell its shares in Namibia’s biggest telecommunications company, Mobile Telecommunications Company (MTC), and use the proceeds to reduce the government’s debt.
8. Responsible Business Conduct
Most large firms, including SOEs, have well defined (and publicized) social responsibility programs that provide assistance in areas such as education, health, environmental management, sports, and SME development. Many firms include Black Economic Empowerment (BEE) programs within their larger Corporate Social Responsibility (CSR) programs. Firms operating in the mining sector – Namibia’s most important industry – generally have visible CSR programs that focus on education, community resource management, environmental sustainability, health, and BEE. Many Namibian firms have HIV/AIDS workplace programs to educate their employees about how to prevent contracting and spreading the virus/disease. Some firms also provide anti-retroviral treatment programs beyond what may be covered through government and private insurance systems.
Namibia’s mining sector is considered a leader in the region for its sound mining policy and responsible business conduct. Namibia ranked as the best jurisdiction in Africa on its mining policy in a 2019 Fraser Institute survey. Namibia is also a member of the U.S. Department of State’s Energy Resource Governance Initiative that seeks to promote sound mining governance and resilient energy mineral supply chains. Namibia is not a member of the Extractive Industries Transparency Initiative (EITI).
Department of State
- Country Reports on Human Rights Practices;
- Trafficking in Persons Report;
- Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities and;
- North Korea Sanctions & Enforcement Actions Advisory
Department of Labor
The Anti-Corruption Act of 2003 created an Anti-Corruption Commission (ACC), which began operations in 2006. The ACC attempts to complement civil society’s anti-corruption programs and support existing institutions such as the Ombudsman’s Office and the Office of the Attorney
General. Anti-corruption legislation is in place to combat public corruption. In a nationwide survey commissioned by the ACC and released in 2016, corruption was listed at the third-most important development challenge facing Namibia (6 percent, after unemployment at 37 percent and poverty at 30 percent). 78 percent of survey respondents rated corruption as “very high” in Namibia. The highest result comes from those in rural areas.
In 2019, Namibia was embroiled in a fishing industry corruption scandal in which government ministers and business leaders were charged and imprisoned for allegedly co-opting the national fishing quota system for personal gain. The scandal allegedly cost Namibia billions of U.S. dollars and has tarnished the reputation of the ruling political party. The accused are in prison awaiting trial. The scandal has resulted in Namibia and its ACC taking a closer look at other industries susceptible to corruption.
Namibia has signed and ratified the UN Convention against Corruption and the African Union’s African Convention on Preventing and Combating Corruption. Namibia has also signed the Southern African Development Community’s Protocol against Corruption.
Resources to Report Corruption
Namibia Anti-Corruption Commission
Corner of Montblanc & Groot Tiras Street, Windhoek +264-61-370-600
10. Political and Security Environment
Namibia is a stable multiparty and multiracial democracy. The protection of human rights is enshrined in the Namibian Constitution, and the government generally respects those rights. Political violence is rare and damage to commercial projects and/or installations as a result of political violence is unlikely. The State Department’s Country Report on Human Rights for Namibia provides additional information.
11. Labor Policies and Practices
Namibian law allows for the formation of independent trade unions to protect workers’ rights and to promote sound labor relations and fair employment practices. The law provides for the right to form and join independent unions, conduct legal strikes, and bargain collectively; however, the law prohibits workers in certain sectors, such as the police, military, and correctional facilities, from joining unions. Except for workers in services designated as essential services, such as public health and safety, workers may strike once mandatory conciliation procedures are exhausted and 48 hours’ notice is given to the employer and labor commissioner. Workers may take strike actions only in disputes involving specific worker interests, such as pay raises.
Namibia has ratified all of the International Labor Organization’s fundamental conventions. Businesses operating within export processing zones are required to adhere to the Labor Act. The 2007 Labor Act contained a provision that prohibited the hiring of temporary or contract workers (“labor hire”), but the provision was ruled unconstitutional by the Supreme Court. The Labor Amendment Act of 2012 introduced strict regulations with respect to the use of temporary workers, according to which temporary workers must generally receive equal compensation and benefits as non-temporary workers.
Child labor in Namibia may occur in certain sectors, such as domestic work, but its occurrence and prevalence are difficult to verify. Although Namibia has ratified all key international conventions concerning child labor, there continue to be gaps in Namibia’s domestic legal framework.
There is a shortage of specialized skilled labor in Namibia. Employers often cite labor productivity and the shortage of skilled labor as the biggest obstacles to business growth. The 2019 Global Competitiveness Report ranked Namibia 94th out of 141 economies. An inadequately educated workforce, access to financing, and low innovation capability are listed in the report as the most problematic factors for doing business.
The government offers manufacturing companies special tax deductions of up to 25 percent if they provide technical training to employees. The government will also reimburse companies for costs directly related to employee training under approved conditions.
As of April 1, 2014, the Namibian government implemented a Vocational Education and Training (VET) levy to facilitate and encourage vocational education and training. The levy, which is payable to the Namibia Training Authority (NTA), is imposed on every employer with an annual payroll of at least NAD 1,000,000 (approximately USD 54,000), at the rate of one percent of the employer’s total annual payroll. The NTA will collect and administer the levy and will use the funds to provide financial and technical assistance to employers, vocational training providers, employees, students, and other bodies to promote vocational education and training. In addition, companies can get a rebate from NTA of up to 50 percent of training costs for their employees.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
|Host Country Statistical source*||USG or international statistical source||USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other|
|Host Country Gross Domestic Product (GDP) ($B USD)||2018||$13.5||2019||$12.4||www.worldbank.org/en/country|
|Foreign Direct Investment||Host Country Statistical source*||USG or international statistical source||USG or international Source of data: BEA; IMF; Eurostat; UNCTAD, Other|
|U.S. FDI in partner country ($M USD, stock positions)||2017||$-78||2018||N/A||BEA data available at https://apps.bea.gov/international/factsheet/|
|Host country’s FDI in the United States ($M USD, stock positions)||2018||$0||2018||$0||BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data|
|Total inbound stock of FDI as % host GDP||2017||53.1%||2018||48.7%||UNCTAD data available athttps://unctad.org/topic/investment/world-investment-report|
|* Source for Host Country Data: Namibia Statistics Agency|
|Direct Investment from/in Counterpart Economy Data (2019)|
|From Top Five Sources/To Top Five Destinations (US Dollars, Millions)|
|Inward Direct Investment||Outward Direct Investment|
|Total Inward||5,400||100%||Data Not Available|
|“0” reflects amounts rounded to +/- USD 500,000.|
|Source: Bank of Namibia’s Annual Report https://www.bon.com.na/Publications/Annual-Reports.aspx|
Table 4: Sources of Portfolio Investment
Data not available.
14. Contact for More Information
Political, Economic, and Commercial Section Deputy Chief
14 Lossen Street, Windhoek, Namibia +264-61-295-8500