The sound economic management has enabled economic growth and poverty reduction in Namibia. The economy is heavily dependent on the extraction and processing of minerals for export. Mining accounts for 11.5% of GDP, but provides more than 50% of foreign exchange earnings. Namibia’s economy grew by an average of 5.6% per annum between 2010 and 2014. The economic growth was driven by massive investment in extractive projects, strong export prices, rapid private credit growth, and a program of deficit-financed fiscal stimulus. The Angolan economic growth is projected to slow down to 2.5 percent in 2016 but to recover marginally to 2.7 percent in 2017. Inflation was 3.4% in 2015 and was projected to remain at 5% per annum for years 2016, 2017 and 2018. Growth in Angola is expected to remain subdued, due to the prevailing low oil prices and low rate of economic diversification. The Namibian economy is closely linked to South Africa with the Namibian dollar pegged one-to-one to the South African rand. It is important to note that the country is also vulnerable to short- and long-term environmental shocks as all major sources of growth depend heavily on Namibia’s fragile ecosystem.
Why invest in Namibia?
- Namibia provides the continent’s most pleasant, peaceful and politically stable environments;
- Namibia has an abundance of natural resources;
- Namibia has rich fishing grounds;
- Namibia’s agricultural sector is important to the economy;
- Namibia’s Tourism sector continues to be a booming industry.
- Namibia has preferential trade links to the 190 million inhabitants of the Southern African Development Community (SADC) as one of the 14 member states.
- Namibia belongs to the Southern African Customs Union (SACU) affording duty and quota free access to the South African market and others.
- Namibia is signatory to the Cotonou Agreement, giving duty free access to the European Union for a wide range of manufactured and agricultural products.
- Namibia has duty and quota free access to the lucrative US market under the Africa Growth and Opportunity Act (AGOA).
- Namibia offers among the attractive fiscal incentives in Africa via its Export Processing Zone (EPZ) regime.
- Namibia has a wealth of attractions and advantages for foreign-owned companies looking for business opportunities.
- Namibia has an advantageous legislative and fiscal environment and a government keen to foster the engines of Investment
Namibia has enjoyed stability since it gained its independence in 1990. The Namibian General Election 2014 was conducted peacefully which is an important sign of political stability.
The population of Namibia was estimated at 2.5 million in 2016 with estimated growth rate of 2%. The population is projected to reach 3 million people by 2031.
It is estimated about 45% of the population of Namibia live in urban centres and the urban population growth is estimated at 4.4% per annum.
Doing business in Namibia
The highlights of World Bank score of doing business in Namibia are summarised as follows;
|Topics||World Bank 2017 Rank||World Bank 2016 Rank||Change in Rank|
|Starting a Business||170||163||
|Dealing with Construction Permits||67||64||
|Protecting Minority Investors||81||78||-3|
|Trading across Borders||127||123||
The government is the in process of addressing the matters that led to the deterioration of the business environment.
Moody’s has rated Namibia Baa3, negative from stable. Fitch’s credit rating for Namibia is reported at BBB- with negative outlook.
The Bank of Namibia (BoN) is the regulatory body that oversees the exchange of currency. The commercial banks are authorized to act as foreign exchange dealers. The Namibia Bureau de Change (Pty) Limited has limited authority as a dealer.
The Namibia Investment Centre (NIC) provides a one stop shop centre for investors and all disputes should be channelled to NIC for handling. The investment disputes can also be handled by the courts.
Key development challenges
- Diversifying the economy and broadening economic opportunities as the economy remains heavily dependent on mining;
- Lack of adequate skilled labour;
- Poverty, inequality, and unemployment issues have not been adequately addressed and
- Enhancement of power generation capacity.
Namibia scored 52 points out of 100 on the 2016 Corruption Perceptions Index reported by Transparency International which is deterioration when compared to the score of 53 points the previous year. Namibia got a rank of 53 out of the 176 countries that participated in the survey.
Most visits to Namibia are trouble free but visitors should carry identification with them at all times.
Unemployment and skilled labour
The unemployment rate in the country is estimated at 27, 4% according to the Namibia Labour Force Survey (NLFS) 2012 conducted by Namibia Statistics Agency (NSA). The survey indicates the unemployment of 56% of youths between 15 and 19 and 49% of those between 20 and 24. Unemployment is more prevalent in urban areas where 28.3% of people are stranded without work compared to 26.2% in rural areas. Agriculture, forestry and fishing are the biggest employer, providing jobs to 27, 4% of the work force. This is followed by wholesale and retail trade (11, 9%), private households (11%) and construction (6, 8%).
Attitude to Foreign Direct Investment
Namibia encourages foreign investment to help in the development of the national economy for the benefit its population. The Foreign Investment Act guarantees equal treatment for foreign investors and Namibian firms, including the possibility of fair compensation in the event of expropriation, international arbitration of disputes between investors and the government, the right to remit profits and access to foreign exchange. Investment incentives and special tax incentives are also available for the manufacturing sector. The Foreign Investment Act (FIA) of 1990 is the primary legislation that governs foreign direct investment in Namibia.
Restrictions on Foreign investment
There are no known cases of restrictions except when done in national interest but also subject to compensation.
Intellectual Property (IP) Rights.
Namibia is a party to the World Intellectual Property Organization (WIPO) Convention, the Berne Convention for the Protection of Literary and Artistic Works, and the Paris Convention for the Protection of Industrial Property. Namibia is also a party to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks and the Patent Cooperation Treaty. Namibia is a signatory to the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty. The responsibility for IPR protection is divided among three government ministries. The Ministry of Industrialization, Trade and SME Development oversees industrial property and is responsible for the registration of companies, private corporations, patents, trademarks, and designs through its Business and Intellectual Property Authority (BIPA). The Ministry of Information and Communication Technology manages copyright protection, while the Ministry of Environment and Tourism protects indigenous plant varieties and any associated traditional knowledge of these plants. Two copyright organizations, the Namibian Society of Composers and Authors of Music (NASCAM) and the Namibian Reproduction Rights Organization (NAMRRO), are the driving forces behind the government’s anti-piracy campaigns. NASCAM administers intellectual property rights for authors, composers and publishers of music. NAMRRO protects all other intellectual property rights including literary, artistic, broadcasting, satellite, traditional knowledge and folklore.
Diamonds, copper, gold, uranium, lead, tin, zinc, salt, vanadium, fisheries, and wildlife; suspected deposits of oil, coal, and iron ore.
Investment Climate in Namibia has been summarized to include the following
Sources of information