Strategy launched to shift foreign grip on finance

A new financial sector strategy aims to reduce foreign dominance and promote inclusive local ownership among previously disadvantaged Namibians over the next decade.

The recently launched Namibia Financial Sector Transformation Strategy (NFSTS) for 2025 to 2035 recorded that historical imbalances have made it exceedingly difficult for many Namibians to participate in the ownership of financial institutions.

According to the report, ownership of Namibia’s financial institutions remains largely skewed with data showing foreign ownership dominates, and where ownership is Namibian, it is primarily concentrated in the hands of the previously advantaged.

“While some have managed to establish financial institutions, for the majority, factors such as pre-independence opportunity asymmetry, lack of funding, skills and experience, and post-independence market dominance have remained major hurdles,” the report reads.

While the banking sector has voluntarily reached a 25% local ownership target, the insurance and investment sectors have lagged behind.

The recently launched strategy seeks to drive inclusive ownership, participation, and decision-making in the financial sector, particularly among previously disadvantaged Namibians.

“The financial sector plays a critical intermediating role in any economy. Localising this sector is key to stimulating economic growth and employment creation by ensuring that the financial needs of the Namibian economy are adequately catered for,” the report reads.

Efforts to enforce localisation through legal obligations have previously been ruled unconstitutional.

With that in mind, the new strategy aims to implement a “meaningful localisation strategy” built on alternative models and incentives rather than mandates.

By 2027, the financial sector will investigate alternative ownership models and develop incentives to encourage local ownership.

“Incentives can accelerate the shift towards local ownership, management and workforce participation, ensuring the sector is more rooted in Namibia’s socio-economic fabric,” the report reads.

Additional measures include offering incentives to institutions that meet localisation benchmarks by 2030, providing grants or low-interest loans for previously disadvantaged start-ups and youth in the sector by 2027 and prioritising locally owned institutions in public procurement by 2026.

The report was launched by the Bank of Namibia, in collaboration with the Namibia Financial Institutions Supervisory Authority and the Ministry of Finance.

The new strategy has five strategic pillars, namely digital transformation and innovation, financial access, literacy and protection, skills and capacity development, financial sector development for growth and sustainability, and financial sector localisation.

To track progress the central bank says it would develop standardised metrics and tools by 2026, along with annual reports to ensure transparency and accountability.

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.