New investment law to bar foreign retailers under N$7.5m threshold
Namibia’s new Investment Promotion Act is set to block foreign participation in small-scale retail and agricultural businesses valued below N$7.5 million, marking one of the most significant shifts in investment policy since independence.
Under the draft regulations, government has reserved the entire retail sector under N$7.5 million for Namibian citizens only, in what policymakers call a measure to protect local entrepreneurs from being crowded out by foreign-owned shops.
It is not clear whether foreign-owned outlets currently trading in that category will be allowed to continue with their operations or be asked to pack up and close shop.
Agricultural ventures valued under the same threshold will also be reserved for citizens – except for produce grown in enclosed facilities or by hotels and restaurants for their own use.
The new rules form part of a broader overhaul designed to tighten control over investment flows, prioritise local ownership and ring-fence certain industries as strategically important to the national economy.
The Act introduces a far more centralised system for regulating investments, especially in strategic sectors, which will require explicit approval from the trade minister before any investor – local or foreign – can operate.
Although these strategic sectors have not yet been listed, the regulations confirm that central banking remains strictly reserved for the State.
The Namibia Investment Promotion Agency (NIPA), to be created under the Act, will process all investment applications, gather information, consult the Namibia Competition Commission (NaCC) when necessary, and issue non-binding recommendations to the minister. Approval becomes valid only when all sector-specific licences are secured.
Control changes – whether through mergers, acquisitions or restructuring – will also require fresh ministerial consent.
Mandatory registration for investment benefits
Investors will be required to register approved projects in a national investment database maintained by NIPA. Registration is compulsory for entities seeking to access government incentives, public-private partnerships, procurement opportunities or natural-resource rights.
The agency must also maintain registers of Namibian SMEs eligible for supply-chain participation and Namibian investors able to partner with foreign firms – part of the government’s push to deepen local participation in investment projects.
The Act gives NIPA expanded monitoring powers, including the authority to request information from investors, conduct compliance inspections and report breaches to the minister.
Where a violation is found, investors must be given an opportunity to correct it. Continued non-compliance may result in suspension or cancellation of approvals, deregistration or an order to halt operations altogether.
Equal treatment, capital flows and expropriation
While the Act tightens control in key sectors, it maintains the principle of equal treatment between foreign and Namibian investors, except in cases where specific sectors are reserved for citizens or covered by preferential international agreements.
Expropriation must comply with Article 16 of the Constitution, requiring just compensation based on fair market value and assessed by independent experts approved by Cabinet.
Investors may transfer capital, profits and liquidation proceeds freely into and out of Namibia, subject to exchange-control conditions. Temporary restrictions may be imposed during bankruptcy proceedings, tax enforcement, or balance-of-payments pressures.
Incentives and skills transfer obligations
Investment incentives – fiscal or otherwise – will only be available through a ministerially issued incentives certificate. These certificates may be suspended or cancelled if conditions are breached or projects are not implemented.
Foreign personnel may be employed where local skills are lacking, but investors must commit to training Namibians through apprenticeships or work-integrated learning agreements to eventually take over those roles.
Existing investors will have 12 to 18 months to register under the new law once it comes into force.
Under the draft regulations, government has reserved the entire retail sector under N$7.5 million for Namibian citizens only, in what policymakers call a measure to protect local entrepreneurs from being crowded out by foreign-owned shops.
It is not clear whether foreign-owned outlets currently trading in that category will be allowed to continue with their operations or be asked to pack up and close shop.
Agricultural ventures valued under the same threshold will also be reserved for citizens – except for produce grown in enclosed facilities or by hotels and restaurants for their own use.
The new rules form part of a broader overhaul designed to tighten control over investment flows, prioritise local ownership and ring-fence certain industries as strategically important to the national economy.
The Act introduces a far more centralised system for regulating investments, especially in strategic sectors, which will require explicit approval from the trade minister before any investor – local or foreign – can operate.
Although these strategic sectors have not yet been listed, the regulations confirm that central banking remains strictly reserved for the State.
The Namibia Investment Promotion Agency (NIPA), to be created under the Act, will process all investment applications, gather information, consult the Namibia Competition Commission (NaCC) when necessary, and issue non-binding recommendations to the minister. Approval becomes valid only when all sector-specific licences are secured.
Control changes – whether through mergers, acquisitions or restructuring – will also require fresh ministerial consent.
Mandatory registration for investment benefits
Investors will be required to register approved projects in a national investment database maintained by NIPA. Registration is compulsory for entities seeking to access government incentives, public-private partnerships, procurement opportunities or natural-resource rights.
The agency must also maintain registers of Namibian SMEs eligible for supply-chain participation and Namibian investors able to partner with foreign firms – part of the government’s push to deepen local participation in investment projects.
The Act gives NIPA expanded monitoring powers, including the authority to request information from investors, conduct compliance inspections and report breaches to the minister.
Where a violation is found, investors must be given an opportunity to correct it. Continued non-compliance may result in suspension or cancellation of approvals, deregistration or an order to halt operations altogether.
Equal treatment, capital flows and expropriation
While the Act tightens control in key sectors, it maintains the principle of equal treatment between foreign and Namibian investors, except in cases where specific sectors are reserved for citizens or covered by preferential international agreements.
Expropriation must comply with Article 16 of the Constitution, requiring just compensation based on fair market value and assessed by independent experts approved by Cabinet.
Investors may transfer capital, profits and liquidation proceeds freely into and out of Namibia, subject to exchange-control conditions. Temporary restrictions may be imposed during bankruptcy proceedings, tax enforcement, or balance-of-payments pressures.
Incentives and skills transfer obligations
Investment incentives – fiscal or otherwise – will only be available through a ministerially issued incentives certificate. These certificates may be suspended or cancelled if conditions are breached or projects are not implemented.
Foreign personnel may be employed where local skills are lacking, but investors must commit to training Namibians through apprenticeships or work-integrated learning agreements to eventually take over those roles.
Existing investors will have 12 to 18 months to register under the new law once it comes into force.
Comments
Namibian Sun
No comments have been left on this article