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 1993 (FIA). The MIT is working on new business legislation, the Namibia Investment Promotion and Facilitation Act, but the legislation is still in draft form. As a result, the FIA remains the guiding legislation on investment.
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, 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 to operate in country.
The mining, fishing, and tourism sectors have historically attracted significant investment in Namibia. There are large Chinese foreign investments, 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 mining. Spain and Russia have investments in the fishing industry. Foreign investors from the United Kingdom, the Netherlands, the United States, and other countries have investment in oil exploration off the Namibian coast. Logistics, manufacturing, and mining for diamonds and critical minerals such as gold lithium, and uranium also attract investment.
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), such as an independent judicial system, protection of property and contractual rights, good quality physical and telecommunications infrastructure, and easy access to South Africa and the region. 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, notably to improve connection from Walvis Bay port to neighboring countries. 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, which is also headquartered in Namibia), the Southern African Development Community’s (SADC) Free Trade Area, and markets in Europe and Asia. With the second highest solar radiation in the world and vast land and wind resources, Namibia is also positioning itself to be a global leader in renewable energies and green hydrogen, with potential to improve local and regional access to energy and efforts to combat climate change.
Factors that may inhibit FDI into Namibia are the country’s relatively small domestic market, high transport costs, high energy prices, and limited skilled labor pool. Corruption is a problem but not endemic. A recent scandal in the fishing sector resulted in the arrests of ministers and business leaders, cost Namibia around a billion USD, and strained public trust.
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 has been in draft form for more than a decade, will look to create economic and business opportunities for disadvantaged groups, including in the areas of ownership, management, human resource development, and value addition. Parliament aims to pass the bill in 2022, but further delays are possible.