PRIME minister Saara Kuugongelwa-Amadhila says the most talked about New Equitable Economic Empowerment Bill will avoid measures that may have a negative impact on business.
She said the bill will also take into account the critical need to safeguard the economic gains made so far including maintaining investors’ confidence to ensure that the country can build on the foundation of a stable and growing economy to achieve a more equal Namibia and to raise the economy on a higher growth trajectory.
Kuugongelwa-Amadhila was responding to questions from The Namibian on the Namibia Equitable Economic Empowerment Bill’s influence on Fitch’s recent downward revision of Namibia’s economic outlook from stable to negative.
Fitch, an international ratings agency, based its decisions mainly on the budget deficit – said to be the worst ever for Namibia – that stands at 8,3% of gross domestic product in 2015/16. This is above government’s 5% target.
Other contributing factors are falling Sacu revenues; reduced company and income tax; and the effects of the proposed New Equitable Economic Empowerment Framework (NEEEF) on foreign investments.
Fitch says that future developments that could result in a downgrade include deterioration in economic growth, for example, due to a worsening business environment.
However, Kuugongelwa-Amadhila added that high inequality, high unemployment, and low per capita growth and development are cited among the reasons for a revision of the outlook from stable to negative and according to her, these are among the focal issues for the New Equitable Economic Empowerment Bill.
“A carefully crafted empowerment law that effectively targets these issues can help unleash the potential of our economy to achieve higher and more equitable growth and develop resilience to external shocks through diversification and expansion of our industrial base,” she said of the bill.
She added that the input from public consultation will be considered seriously and the bill will be reviewed to incorporate whatever proposals are seen to improve on the bill.
Further, the Prime Minister said that the implementation of the law, once passed, will consider the peculiarities of different sectors and thus provide for sector specific implementation strategies and targets.
“The regulations under the law will also provide thresholds for applicability of different provisions of the law. This means that certain specified businesses may be exempted from some provisions of the law as may be deemed appropriate to ensure practicality and mitigate against unintended negative impacts,” she said.
