The Outflow of Capital from the Namibian Economy

Part 4

By Lazarus Sheefeni Uaandja

EXPERIENCE garnered from diverse developing countries that have chosen to open up their economies to transnational corporations (TNCs) would point to the good paying jobs that most TNCs created. This is partly so because many TNCs’ workforce salaries are based on international standards of rates’ remuneration, which means salaries tend to be market related, especially in highly technical fields.

This is one of the good things some TNCs bring to bear in markets they operate in. Experience would also reveal that some TNCs pay their Namibian workforce low salaries, below what many SMNRC would pay.

Similar concerned Namibian stakeholders would have voiced against deplorable and prevalent labour conditions at the workplaces of some investors operating in Namibia. In this regard, more needs to be done to change the status quo.

There’s is no denying the irreversible fact that almost all Namibian-based TNCs generate streamed revenues. The revenues TNCs generate, they do so together with their Namibian workforce.

Making their Namibian workers to benefit from the wealth Namibian workforce help create within TNCs they work in; TNCs could meet its Namibian workers’ genuine desires to equitably share in the wealth through share options. Share options for the workforce could be offered through employee trusts.

Further, experience gathered from companies operating in both developing and developed markets that have embarked on granting their workforce share options show tremendous progress in increased labour productivity, increased sense of workforce belonging, increased sense of workforce responsibility, increased sense of workforce ownership and improved workplace morale.

Nailing it down rightly on the Namibian workforce situation, Namibian workers would go a long way in appreciating the ups and downs of the TNCs they work for, but also would be grateful for becoming co-owners in those TNCs, co-creating wealth with the workforce, co-shareholders and decision-makers and taking part in decision-making processes as co-owners of such TNCs.

This co-ownership stance would broadly apply both to TNCs, as well as non-TNCs operating elsewhere in the globe.

Most Namibian stakeholders have been doing what could boil down to Chinese or foreigner-bashing. Majority of these outcries seem to have come as a result of alleged Chinese nationals setting up shop everywhere in Namibia, paying meager salaries to their Namibian workers, physically and psychologically abusing their local workers, and selling goods and services without adding taxes to their goods and service, or selling their goods and services without deducting taxes to pay over to the Ministry of Finance.

The expansion of Chinese shops everywhere within the geographical space of Namibia had left many local Namibian businesses very little room to maneuver in selling their goods and services.  However, taking a magnifying lens to some Chinese outlets springing up in many newly proclaimed towns, it would appear that Chinese shops are not the only ones.

In a way, Chinese shops would seem more pronounced, more aggressive and more assertive in marketing their products than, say, the Indian and South African shop outlets. Invariably, all foreign-owned outlets operating within the Namibian economy seem responsible for illegally or legally taking out money from the Namibian economy to their respective national capitals.

Taking a closer look at the critics of foreign investments and more so with regard to Chinese investors, I would highlight what investments in the Namibian economy would be expected to set in motion, as seen in line with Foreign Investment Act of 1990 (FIA).

Critiquing the FIA, as amended in 1993, in respect of some of the unredacted incentives of EPZ and CSI offered or granted to and requiring a foreign investment, investments would be expected:

To contribute to the Namibian economy in terms of employment opportunities.  Indeed, the Chinese companies are creating jobs for many unemployed able-bodied Namibians.  Cons: most Namibians working for Chinese companies claim they’re subject to deplorable working conditions, receive low pay and work more than eight hours a day without overtime payment. Experience has it that most Chinese investors do not always deposit the proceeds of their sales in Namibian banks, as they would have set up their own saving schemes whereby they convert local Namibian currency into US dollars, which they would repatriate to China. Pros: Chinese companies have helped improve living standards of many poor Namibians, especially by making available cheap products such as tents, solar powered flashlights, solar powered chargers, clothes, blankets, mattresses and electronics, such as watches, cellular phones and radios, etc.;

Provision of training for Namibians, use of raw materials and locally produced goods. Statistics showing how much money and time Chinese investors spent on training their Namibian workforce had proven hard to come by for use in this article. More often than not, experience had shown that many Chinese investors buy local products such as food as many Chinese investors opt to produce their food within small land spaces or plots.

Enterprises can set up any place in Namibia where it suits their interests; there are no geographical limitations. EPZ regimes have opened up the Namibian markets to foreign and local investors. Principally, one would assume that opening up the Namibian economy without first thoroughly preparing Namibian enterprises to compete with foreign companies was done to fast-track desired high-profile economic development objectives within the jurisdiction of the fourteen administrative regions. One wonders if all the Chinese shops set up in remote areas of the 14 regions of Namibia have received a Certificate of Status Investment (CSI) to operate.  If not, the Namibia Investment Centre (NIC), as the investment custodian of the Namibian investments as well as the promoter and administrator of foreign and local investments, would be empowered with the powers and functions to rescind any unlawful or illicit trades any investor would embark on in Namibia, including, but not limited to, Chinese shop operations anywhere in Namibia, and

Granting of a Certificate of Status Investment. One would assume that during the promotion of investment opportunities to potential investors, induction stage of investors who were vetted and approved to invest in Namibia and the granting of CSI to investors, the NIC would explain not only the incentives, but also the laws, regulations and directives governing the conducts of all investors. One would also assume that at the stage of granting CSI, platforms, processes and systems would be put in place to vet, scrutinise and track the progress or challenges investors would face. One would assume it would be at such stage that platforms, processes and systems would categorically inform the NIC whether or not the specific investor would comply with investment requirements. Rigorous processes and systems are important in supporting platforms tracking down acts or deeds of investors. Well-trained, well-remunerated and high-morale technocrats versed in the use of world-class technology are a must.

Value-addition to Namibian raw materials. Concerned Namibian stakeholders, as well as Namibian government have being talking about the need for value-addition to local raw materials. Remarkable progress has been made in value-addition to products such as Namibian leather, diamonds, fish and gold, to mention but a few.  Yet a lot of work would need to be done in line with investment-led initiatives, especially once the government and private sector put in place evolving public-private partnership programmes, aimed at galvanizing a growth strategy and putting together financial, human and technological capital driving national development objectives, coupled with quantifiable programmes that are achievable, bankable, measurable, realistic and sustainable milestones. Value-addition activities hold real potential to create more local jobs, expertise and wealth creation with unbridled passion as well as local markets to consume value-added products.