Governmentpolicy causes economic decline

What the government says will empower many is feared to be the last nail in the coffin of free enterprise.

17 May 2019 | Business

Local businesses burdened with a crushingly tough economic climate feel the government's policies have contributed to the current climate, particularly legislation aimed at empowerment and increased protectionism.

A survey gauging the private sector's feelings about the proposed National Equity Economic Empowerment Framework (NEEEF) indicates a general sense of hopelessness among Namibian-owned businesses that feel they have no say in the government policy-making.

The survey was conducted by the Economic Policy Research Association (EPRA), which is a voluntary association with a membership of about 600 Namibian companies, most of them concerned about the possible impact of the proposed NEEEF on their businesses and the country's economic future.

NEEEF, NIPA won't empower or improve investment climate

Most of the respondents (81.1%) are knowledgeable about NEEEF and feel it will result in “substantial economic decline”. More than 12% said it would result in “some economic decline”, and not a single respondent felt that it would bring about economic growth.

Most (75%) feel that even if a mandatory 25% previously disadvantaged ownership clause were to be removed from the proposed NEEEF, it would not result in broad-based empowerment of previously disadvantaged Namibians, as is propagated by the government.

Worrying is that the majority of respondents knew very little (51.1%) or nothing at all (19.44%) about the Namibia Investment Promotion Act (NIPA), a piece of legislation promulgated almost unnoticed in 2016.

While amendments to NIPA are still under review, most businesses (about 50%) say they do not know if it will promote investment in the country. None of the respondents felt it would increase investment here.

EPRA had earlier expressed concern that the NIPA would further damage Namibia's investment and economic environment because it would increase government control over private-sector investment.

The concern is that this will mean an increase in bureaucracy, create fertile ground for corruption and ultimately scare investors away by restricting repatriation of profits and entrench easy routes for expropriation of investors' property.

“While countries across the world are attracting skilled people and investors by opening their markets, providing excellent incentives to investors, by reducing bureaucracy, by increasing investor protection, and by allowing free repatriation of after-tax profits, Namibia does the opposite,” said EPRA's Eben de Klerk.

He said this contributes to Namibia's continuing slide down the global competitive rankings.

Government states that NIPA is to promote sustainable economic development and growth by attracting foreign and domestic investment.

It will also to provide for reservation of certain economic sectors and business activities to certain categories of investors.

EPRA had previously raised concerns over the fact that NIPA provides for an investment approval regime that gives the responsible minister sweeping discretionary powers in the regulation and decision-making on investment matters.

According to De Klerk, NIPA gives the minister the power to decide how much is to be invested here, how much investments are allowed to grow, and what profits can be repatriated from the country.

NIPA further makes provision for expropriation of land and property owned by investors “in the public interest”.

“What NIPA is saying to potential investors is that the government will be able to take a portion of your business when you come here, that you will have to pay bribes and arrange kickback deals because you have to influence one minister, and that we can expropriate your investment any time we want if we feel it is in the public interest. That is not an attractive environment for any investor,” De Klerk said.

He says confidence in the business climate in the country is on a dangerous and steady decline “and is not stopping”.

“You can only grow business if you incentivise businesses. Then you grow your tax revenue, which in turn grows your social safety nets, which provides a more secure environment for poor people.

“Instead, it would appear as if the government brings in policies to kill the private sector. We have already seen a substantial increase in retrenchments and a decline in expected tax revenue as a result thereof,” is De Klerk's damning conclusion.

No voice

Businesses feel they have no say or influence over government policy-making.

Ninety-three percent say they have no influence in government policy, while 82% said they do not belong to the Namibia Chamber of Commerce and Industry (NCCI). It appears that business do not trust the NCCI, with 54% stating that they don't know if the NCCI can adequately and effectively represent the interests of the Namibian business community, while 38% stated that NCCI can definitely not be trusted to do so.

Only 7% of businesses state that NCCI can do so.


Similar News


2020 Mining Expo and Conference cancelled

15 hours ago | Business

Phillepus Uusiku The Mining Expo and Conference that was scheduled for 2-3 September 2020, after having been postponed from 22-23 April, has been cancelled. The...

NBL ready to deliver

15 hours ago | Business

Phillepus UusikuLife is slowing returning to normal as Namibians navigate the country’s gradual reopening following an easing of trade restrictions which were necessitated to combat...

Shanghai copper hits 3-month high

15 hours ago | Business

Shanghai copper prices rose to their highest in nearly three months on Tuesday, as demand in top metals consumer China continued to recover, though gains...

Company news in brief

15 hours ago | Business

Aeroflot losses widen as traffic slumpsRussian airline Aeroflot on Tuesday reported its first-quarter net loss widened to 22.48 billion roubles (US$326.2 million) after traffic...

Company News In Breif

1 day - 02 June 2020 | Business

London Metal Exchange cancels events The London Metal Exchange (LME) said on Monday it cancelled all of its events during the LME Week in London...

De Beers to shift diamond viewings from Botswana

2 days ago - 01 June 2020 | Business

Brian Benza - Global diamond giant, De Beers is working with Botswana's government to temporarily move viewings to places closer to international diamond centres, with...

Alrosa expects big drop in May sales

2 days ago - 01 June 2020 | Business

Polina Devitt - Russian diamond producer Alrosa expects its sales for May to total tens of million US dollars, down sharply from May 2019 but...

MTC most admired brand in Nam

2 days ago - 01 June 2020 | Business

Phillepus Uusiku - Massive investment, consistency, accessibility and giving clients an exceptional experience are some of the most important tools in transforming a product or...

The struggles of a small airline during coronavirus

2 days ago - 01 June 2020 | Business

Anne-Sophie Faivre le Cadre - Launching an airline in Africa is a notorious challenge in a continent and sector where opportunities are often crimped by...

Company news in brief

2 days ago - 01 June 2020 | Business

BAT SA to file lawsuitA raft of South African tobacco companies, activists and associations are seeking legal action over the ban on cigarette sales during...

Latest News

Sean K part of Covid-19...

2 hours ago | Art and Entertainment

WINDHOEK EXPRESSWINDHOEKNamibian crooner Sean K is one of 11 African artists who worked on a collaborative song to thank healthcare workers for their commitment and...

2020 Mining Expo and Conference...

15 hours ago | Business

Phillepus Uusiku The Mining Expo and Conference that was scheduled for 2-3 September 2020, after having been postponed from 22-23 April, has been cancelled. The...

NBL ready to deliver

15 hours ago | Business

Phillepus UusikuLife is slowing returning to normal as Namibians navigate the country’s gradual reopening following an easing of trade restrictions which were necessitated to combat...

Treasury demands reports of lockdown...

15 hours ago | Economics

OGONE TLHAGEWINDHOEKThe ministry of finance will demand full reports from public entities, ministries, agencies and offices detailing procurement expenditure incurred during stage one of the...

Over 120 lose jobs at...

15 hours ago | Labour

KENYA KAMBOWERUNDUAbout 120 people lost their jobs yesterday after a fallout between Chinese-born business magnate Stina Wu and a subcontractor that labour inspectors found to...

Namibia’s food security paradox

15 hours ago | Agriculture

Venomukona Tjiseua, sustainable agriculturalist: “The government must revisit its priority list and place agriculture at its correct spot.”With jobs disappearing, incomes drying up and savings...

The contest for hearts and...

15 hours ago | Opinion

Nightfall does not come all at once, neither does oppression. In both instances, there is a twilight, when everything remains seemingly unchanged.The above quote by...

Indemnity forms a matter of...

15 hours ago | Education

OGONE TLHAGEWINDHOEKWith some learners expected to return to schools today, education ministry executive director Sanet Steenkamp says parents will have to trust that schools have...

SA loosens lockdown to revive...

15 hours ago | International

South Africa sought to revive its stuttering economy on Monday with a partial lifting of its coronavirus lockdown, letting people out for work, worship or...

Load More