Proposed law to reserve key sectors for locals only

Foreigners will no longer be allowed to participate in five identified sectors, while those participating in five other listed sectors may only do so from a set investment threshold.

This will become effective if the new Investment Bill, which has been on the table since 2006, comes into effect in its current form – especially the clauses dealing with sectors to be reserved for locals.

Bringing stakeholders up to speed during a Namibia Local Business Association (Naloba) policy conference in Windhoek yesterday, deputy executive director in the ministry of trade and industrialisation, Michael Humavindu, shared the details of the Bill which is currently in its final rounds of consultations.

Sectors to be wholly reserved for Namibians include transport – namely taxis, airport shuttles, petroleum distribution and storage.

Others are small-scale mining, childcare businesses such as creches, the beauty industry – like hair salons and barbershops - as well as camping and entertainment parks.

Money talks

Foreign investors will be required to inject excess of N$7.5 million to participate in the retail and agricultural sectors, upwards of N$200 million in the construction sector, and cede 33% of their business interests to Namibians if they want to participate in joint-venture activities.

“If you are a foreign investor that wants to open a mall of N$300 million, then you must inform the minister, because that also helps us understand how many jobs you are going to bring in, what is the technical [skills] transfer that you are going to do and how do we make sure that we can enhance and also support that sector,” Humavindu said of the intended outcomes of the Bill.

“The draft regulations are saying all retail investments up to N$7.5 million are reserved for Namibians. No foreign investors are allowed. However, from N$7.5 million upwards, it’s open,” he added.

More obstacles

Lawyer Eben De Klerk criticised the proposed limitations, saying they have the potential to scare off investors.

“The more obstacles you place, the more investors you chase away. That translates into less jobs, and more unemployment. The most successful countries do not have investment bills. It sounds good [because] we want to protect locals, but you’re putting obstacles in the way of investors,” he warned.

At the Naloba conference yesterday, speakers bemoaned the fact that this Bill has not been gazetted 17 years since it was first introduced.

“Two successive presidencies [of Hifikepunye Pohamba and Hage Geingob] have not implemented this law, which can really be a game-changer for the local economy,” one attendee remarked.

Another said: “Are our officials in the pocket of foreigners, or why are they so effective at delaying this law?”

Finding solutions

Naloba vice-president Kanu Amadhila said the conference was convened to help find solutions to revive ailing indigenous businesses.

“One of the ways to revive businesses is to have policies that are friendly towards us.

“For 33 years, the country has only had a foreign investment law and none for local investors. But apparently this is our country,” he lamented.