The outflow of capital from the Namibian economy
By Lazarus Sheefeni Uaandja
SOME Namibian stakeholders that found themselves in a long deep sleep since 1990 to date seem about to awaken. They would take advantage of the freedom of expression the Namibian Constitution bestows on the citizenry, but pitifully, their boldness to speak up coincided with a new leadership and economic meltdown.
It would be unfair for Namibians to take on the new political leadership, especially on issues that would seem to come a long way twenty-nine years on.
Whether or not bread and butter issues are drivers of the Namibian stakeholders’ outcries, it seems clear the nation is witnessing a slow rise of active sections of the electorate leveled against foreign and local investors, especially as to how they expect investors to treat the workforce and comply with Namibian investment, human rights and labour laws.
However, it is unfortunate that most of the outcry seems leveled against Chinese investors.
Chinese investment drive is not only being experienced in the Namibian economy. Robust Chinese investments can be traced from big industrialized economies such as the USA and the UK (wherein would lie the Trump administration’s assertive stances toward the Chinese government and companies) to middle-sized developing economies, such as Kenya, South Africa, Zambia and Zimbabwe to mention but a few.
Broadly speaking, it would be hoped that continental African and Namibian stakeholders would not join in nationalist populist politics doing the rounds in North America and some European nations, mostly leveled against foreigners in general, a cheap foreign workforce, and foreign investors wanting to gain entry into such nations in particular.
China runs a big and increasingly vexing economy backed up by big population, emerging digital revolution and strong military force. Any nation would need China as development partner, more so because Namibia it is a child and product of the international community through the UN Resolution 435, bringing Namibia’s independence and making Namibia exploit all benefits the international community of nations offer Namibia to advance its national development requirements to sustain nation-building initiatives, justice, peace, stability and unity.
Thus, Namibia would best be served by continuing to engage China, as well as other nations whilst advancing and its strategic national interests on the international stage.
In the mid-1990s and early 2000s, the Namibia Investment Centre (NIC) made headlines spearheading and giving answers to questions in respect of investments within and outside Namibia. Today, NIC seems quiet in terms of driving and giving answers to public debates regarding investments in the mining industry.
It seems to be crunch-time and NIC needs to embolden its role, not only in promoting and administering investments, making clear the laws of Namibia to investors, but also in continuously taking care of needs, preferences and wants of investors, tracking down progress of each investor, ensuring each investor complies with the laws of Namibia and reinforcing and meting out non-compliance cases with measured punitive acts, if need be.
Naturally, increasing cultural, diplomatic, economic, geopolitical and technological interdependence also dictate that any nation on earth requires foreign and local investment inflows and/or injections in its economy to meet national development objectives. Against this backdrop, Namibia would continue to need Chinese investments, as much as China would continue to need Namibia as its development partner.
But each nation would critically take a close look at its national needs to make a determination on how best to niche out economic benefits from such relationships. Also, like other nations, Namibia would seem to be best served by engaging other states to get what it needs for the singular purpose of advancing its national development requirements.
It would be amiss not to delve in the discussions in respect of the legitimate outflows of money from the Namibian economy by investors other than Chinese companies or nationals doing legal business in the Namibian market. It would seem that to many Namibians, Chinese investors represent a “new kid around the block” in as far as outflows of money from the Namibian economy are concerned.
Whilst I do not want to seem as a defender of Chinese investors (because I am not) I also would not want to appear as a basher of foreign investors and foreign companies conducting legitimate business in the Namibian onshore, as other foreign companies and foreign nationals hailing from Angola, Canada, France, Germany, Japan, Nigeria, South Africa, Spain, United Kingdom, United States of America to mention a few have legally repatriated money out of the Namibian economy since time immemorial.
In the same vein, most of the countries mentioned above would rank favourably among the foreign developing partners of Namibia responsible for bringing in increasing inflows of FDI into the Namibian economy. Namibia has a moral obligation to embolden and protect such good economic and diplomatic relationships.
Given the size of Namibia’s growing population of about 2.2 million and taking into account global cut-throat competition among nations aimed at attracting volumes of FDI to their respective national economies, and having to date attracted more than 65 companies currently doing business in Namibia, whose diverse interests range from manufacturing of car parts to soft toys for re-export activities, Namibia has achieved a milestone in attracting investments and would continue doing so well into posterity.
While some of these companies hail from local investors, a multitude of positive responses appear to be made up of international companies attracted to Namibia by its evolving democratic, economic, pleasant, stable and vibrant conditions offered on the African continent, though there is still room for improvement.
As for the concerted efforts of investment drives the Namibian embassies, ministries and other personalities have been involved in to attract investment to Namibia, one would assume the NIC would be kept in the know and in contact with every investor in Namibia.
This would be so especially if NIC fulfills its role as promoter and administrator of investment destined for Namibia and for investors who would make Namibia their preferred choice of investment destination.
As for the calls to increase the ownership of the Namibian government in transnational corporations (TNCs), NIC’s technocratic leadership would form part of the negotiation team so as to be better placed to serve investors’ preferences, needs and wants. This would also help NIC implement effective and efficient administrative, corporate governance and tracking processes and systems to support its database investment platforms, forming critical and enduring institutional towering memory for the future successive Namibian administrations.
In turn, the NIC would be expected to play a new enduring communication role in explaining in so that whatever unclear questions relating to investments arise among investors and Namibian stakeholders would be explained.
The Namibian Government seems to have put in place an enabling environment conducive to attracting and facilitating investments from diverse sources both locally and abroad. This includes the Foreign Investment Act (FIA); terms and conditions requiring foreign direct investment (FDI) to be at least N$2 million; FDI to be invested in a Namibian company to be not less than ten percent of its share capital; and any investment in Namibia should bear positive impact on the environment.
Be that as it may, 29 years since NIC’s formative years, is it still effective in making continuous improvements to its institutional processes and systems to support its set promotional administrative platforms?
(Edited for brevity)