The outflow of capital from the Namibian economy

By Lazarus Sheefeni Uaandja

MAY 2019 marked a decisive moment in my life to join in what has evolved into topical discussions, reported in electronic, print and social media, centering on the outflow of money purportedly being transferred from the Namibian economy by transnational corporations (TNCs) and, to a lesser extent by affluent local and foreign investors to other capitals of the world.

Some of the debates about the flow of money out of the Namibian economy seem to marred by a sense of generality, lacking in large parts in evidence or specificity to be meet the readership’s expected burden of proof requirements.

Important would be to discuss also whether or not reported outflows of money from the Namibian economy to other parts of the world amount to illicit money transfers.

Such national deliberations would seem to have been executed without due concurrent debates on inflows of money being invested in the Namibian economy from foreign economies by foreign nationals and TNCs through Foreign Direct Investment (FDI).

Officially, the Namibia Investment Centre (NIC), operating out of the Ministry of Trade and Industry (now rebranded as the Ministry of Trade, SME Development and Industrialisation) does promote and administer foreign and local investments in Namibia.

Determination should, therefore, be made whether or not NIC has put effective and efficient after-care processes and systems in place to support platforms, such as conducting national discussions responsive to finding solutions to the public’s questions regarding the purported outflows of money from and inflows of money to the Namibian economy, and about foreign and local investments, as well as to provide swift and informed public relations communication channels in answering Namibian stakeholders’ (and investors’) questions, thereby being continuously responsive to investors’ and Namibian stakeholders’ needs, wants and preferences at all times; while continuously bringing investors into obligatory compliance with Namibian investment, human rights and labour law requirements at all times.

Also, NIC has a pivotal role to play in educating Namibian stakeholders about the critical importance of foreign and local investments in the economy, as encouraging investment in Namibia’s economy would be critical to the country’s development objectives.

Essentially, this would be not to leave investment matters to mere happenstance, but to ensure investments in Namibia are bankable, implementable, enforceable, predictable, realistic, measurable, achievable, sustainable and trackable in terms of policy barometers.

I would henceforth venture to take a hard look at what the Foreign Investments Act (FIA) of 1990 represents. As amended in 1993, the FIA provides for the Namibia Investment Centre (NIC) as a promotional as well as administrative and implementing arm of the government in respect of foreign and local investments, operating within the former Ministry of Trade.

Further, (see Lazarus Sheefeni Uaandja’s Facebook Analytic Commentary Page) I would give sometimes un-researched and distilled thoughts to issues that Namibian stakeholders have been raised within the national debates, pertaining to ownership interests (would-be) held in TNCs registered within the legal framework of Namibia.

The majority of such Namibian-registered TNCs as companies, to simplify things, more often than not have recruited like-minded Namibians as either board members, minority shareholders, substantive shareholders or top management executives to bring on board work for their TNCs, purposely empowering Namibian shareholders, as well as the Namibian workforce to gain skills development through continuous training.

Notably, some concerned Namibian stakeholders had raised national issues related to:

• Outflows of money from the Namibian economy to foreign capitals;

• Inflows of money from foreign capitals to the Namibian economy;

• The wish for increased ownership by the Namibian government in some TNCs operating within the Namibian market;

• Role of small and medium Namibian-registered companies, mostly owned by previously-disadvantaged Namibians, to co-exist and cooperate with TNCs within the ambit of the Namibian market; most TNCs create well-paid jobs, employing Namibian professionals versed in diverse areas of specialisation;

• Many Namibian workers’ genuine desire to equitably share wealth with TNCs through share options for the Namibian workforce in concerted efforts to reduce the scourge of poverty;

• Apparent rise of nationalist populist politics generally leveled against Chinese nationals, as well as other African nationals operating in the Namibian economy;

• Many Namibian stakeholders’ seeming silence on other foreign investors hailing from other foreign capitals other than from Beijing, working for their respective TNCs and investing in the Namibian economy that may also be partly or wholly responsible for the reported outflows of money from the Namibian economy; and

• The envisioned pivotal pedagogic role of NIC to be communicative and responsive to foreign and local investors in support of the government’s coordinated and focused investment-led growth strategy efforts to buttress national development objectives, so as to equally and ultimately enhance a national social cohesion strategy deliberately aimed at and in furtherance of fostering, maintaining, molding and sustaining co-existence of and unity within existing clan, ethnic, racial, religious and tribal diversities, making up and strengthening the Namibian nation.

Given the above and in hindsight, although some national topics doing the rounds in respect of outflows versus inflows of money as far as Namibia is concerned would seem at times emotive, uncoordinated, unfocused, as well as it would seem being at times applied with a general brush and lacking in informed specificity, their views are welcome as they contribute to information gathering, information sharing and new insights that may be beneficial to the common good, especially research and development.

It is for the above reasons that I am scribbling an opinion piece from my personal perspective, grounded on and in response to some of the abovementioned issues of concern to many a Namibian stakeholder.

In these write-ups, I would make use of some information, giving working definition of terms, names of countries also involved in taking money from the Namibian economy, as I have collated such information from local electronic, print and social media. I would also scrutinize, so as to enliven, the expectant role of NIC in respect of foreign and local investments.

In conclusion, it would be my humble take that Chinese investors are not the only ones responsible for the outflow of money from the Namibian economy.

We should take into account other foreign investors and Namibian nationals responsible for taking out of the Namibian economy, that licitly repatriate money out of the economy in line with spirit and letter of the Foreign Investment Act, and that Namibian stakeholders should somehow double down on unbalanced and unverifiable criticisms against particularly foreign investors that NIC has duly approved – unless it can be proven beyond any shred of doubt that such foreign investors are involved in illicit outflows of money from the Namibian economy.

Against this backdrop, the NIC’s role should be restored to previous active years and emboldened to spearhead investment within its founding operational parameter, and the laws governing money-laundering in Namibia should take their enabling course, where the courts would have identified, prosecuted, given a verdict and sentenced the culprits.

(Edited for brevity. To be continued.)