Economic association pours cold water on investment bill

The Economic Policy Research Association of Namibia (EPRA) says there is little to nothing in the proposed Namibia investment promotion and facilitation Bill that makes investment more attractive.

In reality, according to the EPRA, the bill simply proposes a host of additional obstacles for both local and foreign investors.

These sentiments are contained in a letter addressed to trade and industrialisation minister Lucia Iipumbu yesterday and signed by Epra adviser Eben de Klerk.

“Most concerning is the fact that the government intends to take full control over local and foreign investments, with the powers to decide who may invest, who investors may partner with, which industries may be invested in, where investment may be made, and prescribe with unlimited scope the requirements to which investors must comply,” wrote Epra.

The organisation said similar practices could be found in communist regimes’ governments.

“This does not bode well for investors, and definitely does not create a friendly investment environment, despite the altruistic idea that the government may have,” the organisation said, adding that doing business in Namibia is hard as it is, “without government, local and foreign investors, that are not allowed to develop and run a winning formula.”

The organisation implored the minister not to proceed with the bill, and asked that if need be, a completely different approach be taken.

“We offer our assistance in identifying the obstacles and risks to make the bill a truly investor friendly bill,” the letter reads.

SETTING PARAMETERS

The letter comes as the consultative process on the bill reaches its peak, and with the government suggesting that the new piece of legislation will be structured in a manner that will invite qualitative foreign direct investment (FDI), while supporting domestic direct investment (DDI), as such promoting business dynamism and social integration.

Michael Humavindu, deputy executive director for industrialisation and enterprise development in the trade ministry, while demystifying the bill on Desert Radio this week, said Namibia has a low entrepreneurship culture.

The same, according to him, goes for the country’s business dynamism, which he said is near non-existent.

“We have been an enclaved economy for some time and do not even have a lot of linkages between the current system’s production patterns and that of our indigenous businesses,” Humavindu said, adding that these are some of the complaints that came through during the consultations.

The new law, once enacted, is set to replace the Foreign Direct Investments Act of 1990.

Humavindu said as suggested by the title, little regard was given to domestic investors in the law.

He said the refurbishing of this law paved the way for the inclusion of new aspects around it “on how to ensure that we protect special economic zones and to look after the interest of Namibians, who are perhaps after certain concessions and support through our laws”.

The government, according to the deputy executive director, has taken heed of the cries of local business people.

“However, as a country that needs to attract investments, we need to find a middle ground. Therefore, we are not going wholesale in reserving sectors. We are basically setting some parameters,” he said.