Investment Act to be refined
This is according to ministry of industrialisation spokesperson Elijah Mukubonda, who said concerted efforts are underway not only to improve Namibia’s investment laws but to design them in such a way that they are a useful tool for attracting foreign capital.
"While Namibia has been performing relatively well in comparison to a number of other countries in the region in terms of FDI inflows, Namibia continued to decline in international and regional competitiveness rankings. Consequently, the Ministry of Trade and Industry at the time commissioned two studies to assess the relevance and effectiveness of the existing legal framework, incentives and institutions governing investment in the country," he said.
According to him, both studies concluded that the "Foreign Investment Act is outdated”, is no longer serving as a useful tool for attracting FDI and "needs to be replaced".
It was therefore recommended that the FIA be replaced with a new and more responsive overarching law on investment that embodies, among others, defining a domestic and foreign investor, as well as investment; restricting some economic subsectors to foreign investors; investor performance requirements; ensuring that admission procedures for foreign investors are transparent; establishing a one-stop shop for business facilitation; having a clear mandate on investment promotion, and providing clear guidelines for investor dispute procedures.
Highlighting the need for revisions to the Act, he said a newly independent Namibia, despite its levels of savings and domestic investment, could not adequately drive its industrialisation agenda.
"At independence, the levels of domestic savings, capital formation and private sector investment, were relative and could not adequately serve as meaningful drivers of economic growth and development. In order to augment domestic savings and investment levels, the government passed the FIA as a legal framework for attracting foreign direct investment into the country," Mukubonda said.
He explained that the main provisions of the Act included the equal treatment of foreign investors with Namibians; openness of almost all the sectors to foreigners with few exceptions, such as the extractive mining and fishing sectors; the freedom to repatriate profits after payment of due taxes, and no obligatory joint venture partnership with Namibians.