Shiimi confident greylisting won’t affect green hydrogen investments

Iipumbu Shiimi

Finance minister Iipumbu Shiimi says despite Namibia being listed as one of the countries with poor measures to combat financial crimes, investors continue showing interest in the country’s emerging green hydrogen industry.

In February, Namibia was greylisted by the Financial Action Task Force (FATF) over concerns about its effectiveness in combating money laundering (ML), terrorist financing (TF) and proliferation financing (PF).

Speaking in parliament on Thursday, Shiimi said countries like Namibia, that have been placed on the FATF list for enhanced monitoring, are not subject to any official sanctions by the FATF.

Shiimi further said the greylisting by the FATF does not have the effect of sanctions imposed by the United Nations Security Council, however a blacklisting by the FATF has such an effect.

He said drawing on the experience of previously and currently greylisted neighbouring countries, being greylisted has not substantially impacted their trading relationships with other countries.

“However, some local banks might face higher compliance costs due to the application of enhanced customer due diligence measures and enhanced ongoing monitoring in any business relationship,” Shiimi said.

He argues that the confidence and stability of Namibia’s financial system and the improved growth in the Namibian economy continue to promote trade with all its trading partners and investors.

Namibia received 72 recommendations which it had to address during the 12-month observation period.

Out of the 72 action items, Namibia was able to complete 59 to the satisfaction of the FATF, remaining with 13 action items in such a period.

The said 13 action items are all effectiveness matters, deemed significant to warrant the placement of Namibia on the list of jurisdictions under enhanced monitoring by the FATF.

The action points require improvements in several areas, including stronger supervision of financial institutions with inspections and penalties, stricter due diligence requirements and increased transparency around beneficial ownership of companies.

The plan also emphasises strengthening the Financial Intelligence Centre with resources and training, along with better cooperation with law enforcement for investigations and prosecutions.

Josef Sheehama

Finally, Namibia must demonstrate its ability to tackle ML/TF and update its counter-terrorism strategy.

The country was given a period of 24 months, with deadlines ranging from January 2025 to May 2026, to address all 13 action points.

He said the government has put in place adequate measures to report to the FATF regularly on the progress made regarding the 13 action points.

Economist Josef Sheehama says greylisting will force the country’s financial system to be more transparent and documented, which will enhance AML/CFT procedures overall.

However, he says banks will need to improve their internal compliance processes.

“This means that financial stability and costs of doing business with Namibia will not be seriously impacted by the greylisting. But the fact that these problems change shows that they cannot be intractable. They are all tragic and need to be solved,” Sheehama says.

He says policymakers will need to continue working to improve the AML/CFT system. “The greylisting should serve as a wake-up call for the policymakers, regulators and law enforcement agencies to convince the country’s international counterparts it is worth their effort to maintain relationships as Namibia continues to build a more robust legal and compliance framework to remain competitive on the global stage,” Sheehama says.

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