Minister Tjekero Tweya of the Ministry of Trade, Industrialization and Small and Medium Enterprises Development complained against some Government policies he believes are undermining his efforts at attracting foreign and domestic investment. He told those who were present at the inauguration of the Walvis Bay Salt Holdings processing plan on 24 February 2020 that drastic action is needed to change the policy structure for investors. He cited the apparent high taxes and lack of incentives for investors. The Minister may be correct but he should focus on what he should be able to change in order to inspire investors. In particular, he should amend the Namibia Investment Promotion Act, Act number 9 of 2016.
The Namibia Investment Promotion Act is one of the legal instruments which are discouraging investors. The Act gives wide powers to the Minister to approve, deny, control and regulate investments. Part 2 of the Act deals with the powers and functions of the Minister in the administration of the investment promotion activities. Investors are required to meet certain conditions many of which are onerous. Part 3 gives power to the Minister to decide in sectors an investor should invest. Normally investors choose investment projects in which they will receive return to their capital. The requirement of joint ventures is left to an investor to comply with. What about of a case when local investors do not have equity capital? Part 4 provides for the approval of proposed change of ownership and control of investment. A time- consuming and ministerial approvals are required. This Act is the major “discouraging trend”, as the Minister put it, to investors. If the Minister can urgently amend many discouraging trends in that act he might be able to create a conducive environment for investors.
Minister of Finance Calle Schlettwein was spot on when he told his staff members that “… the Fishrot saga is one of those incidences that show the worst of us and they are extremely harmful to our reputation…”. For investors, reputation matters greatly. Imagine you are an investor in the fishing sector. You go to the bank to borrow money to buy a fishing vessel because you secured a fishing right for a certain period of time. After a year or so you are not allocated a fishing quota because you have not greased some one’s hands. Investors must have trust and confidence in the administration of resources. There must be a certain level of certainty. Corruption is therefore one the “discouraging trends” to investors.
Once a country’s reputation is damaged it takes ages to rebuild such a reputation. Currently Namibia’s reputation is being tainted by the Fishrot scandal. Unless our law enforcement agencies act firmly against those suspected of involvement, Namibia’s reputation as an investment destination is gone forever. Namibia should therefore demonstrate beyond doubt that corruption is a crime against all the citizens. We have laws such as the Anti- Corruption Act, the Financial Intelligence Act, the anti-money laundering Act and institutions such as the Bank of Namibia and NAMFISA , but it appears that crimes are being committed without detection. This gives the impression that the whole system may be infected by the bug of corruption. Which serious investor wants to operate in such an environment. As far as the foreign investment is concerned Namibia must introspect and retrace its steps and find the right path if the country is to win the trust and confidence of investors.
Minister Tweya should be the first to start the process of introspection followed by the whole Cabinet and the Government at large if Namibia was going to start the journey towards rebuilding of its reputation as an investment destination. The Namibian economy is in deep recession. More jobs are being lost. Poverty levels are increasing, income inequality is ever widening and the country is faced with a myriad of social challenges raging from housing, education and health facilities. The ever contracting economy is further creating conditions which are not favourable to social cohesion.
Namibia is at a cusp. The leadership should publicly admit that the country is faced with serious challenges. One can better address a problem when one admits its existence. The ostrich behavior of our leaders will not wish the problems away. We should admit that some of our laws are not helping the country to attract investment. We should admit that corruption is endemic and should be rooted out. We should recognize that the country is in deep recession. When we do so, we should together hold our hands and find ways and means of finding our way out of the current predicament.