German investors turned off

Worries about property rights discourage German businesses to invest in Namibia, a German parliamentarian has said.

17 July 2019 | Economics

German Bundesrat (Federal Council) president Daniel Günther says German investors are ready to invest in Namibia, but policy uncertainties around wealth redistribution and property rights are a stumbling block.

Günther, who is leading a political and business delegation to Namibia, emphasised that German businesses want to invest, but it is important for them to have legal certainty.

“One has to be very careful when it comes to achieving equality between black and white - that is an opportunity. But we should not ignore that businesses investing money is a separate issue. That should not really be mixed up. So for businesses in Namibia, it is important that certain laws are defined that foreigners have some kind of security when they want to invest,” Günther said at State House yesterday, where he met with President Hage Geingob.

He added it is important for investors to know how laws protect their interests over a long time.

Geingob said inequality in Namibia, caused by the German genocide and the subsequent apartheid regime, remains a threat, despite guarantees created by the government.

He said Namibia has proved that it adheres to the rule of law and also pointed to the proposed private sale of the Erindi Private Game Reserve to a foreigner, despite the fact that hordes of native Namibians are without land.

Geingob added that addressing inequality cannot be compromised.

“How do you invest in a country that will go up in flames tomorrow? In our country inequality is based on colour, which is different to other countries. We are not saying we are going to grab from these people and give to poor people… or take from the whites and give it to blacks, but blacks are here,” Geingob said.

When approached for comment Dr Omu Kakujaha-Matundu, an economist, said Günther's talk of policy uncertainties may in actual fact just be an excuse, as Germany may see no attractive ventures in Namibia.

According to Kakujaha-Matundu investors are not put off by policy uncertainties or even wars, such as in countries like the Democratic Republic of Congo (DRC) and Syria, when returns are big.

“I believe foreign investors do not see any bankable ventures here because of Namibia being a small market, the distance to the market, our proximity to South Africa, which is a very big market, and economies of scale,” he said.

He also pointed to the National Equitable Economic Empowerment Framework (NEEEF) as the biggest elephant in the room, but added the controversial 25% ownership clause, which would have seen white-owned businesses having to sell off 25% of their businesses to previously disadvantaged Namibians, was now off the table.

“It looks they are just want to twist government's arm to make so many concessions, which won't even attract investors,” Kakujaha-Matundu added.

JEMIMA BEUKES

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