The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses. The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption. The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.
Executive Summary
Namibia welcomes foreign investment and provides a strong foundation of stable, democratic governance, and good infrastructure on which to build businesses. The Namibian government prioritizes attracting more domestic and foreign investment to stimulate economic growth, combat unemployment, and diversify the economy. The Ministry of Industrialization and Trade (MIT) is the governmental authority primarily responsible for carrying out the provisions of the Foreign Investment Act of 1990 (FIA). In August 2016, Namibia promulgated and gazetted the Namibia Investment Promotion Act (NIPA). However, the country has not yet enforced this Act due to substantive legal concerns raised by the private sector. Therefore, the FIA remains the guiding legislation on investment in Namibia.
The FIA calls for equal treatment of foreign investors and Namibian firms, including fair compensation in the event of expropriation, international arbitration of disputes between investors and the government, the right to remit profits, and access to foreign exchange. The government emphasizes the need for investors to partner with Namibian-owned companies and/or have a majority of local employees in order to operate in the country. Namibia’s judiciary is widely regarded as independent.
There are large Chinese foreign investments in Namibia, particularly in the uranium mining sector. South Africa has considerable investments in the diamond mining and banking sectors, while Canada has investments in gold, zinc, and lithium. Spain and Russia have investments in the fishing industry. Foreign investors from the United Kingdom, the Netherlands, the United States, and other countries have expressed interest in oil exploration off the Namibian coast. Logistics, manufacturing, and mining for energy minerals also attract FDI.
The investment climate in Namibia is generally positive. Despite global economic disruptions caused by the COVID-19 pandemic, Namibia has maintained political stability and continues to offer key advantages for inward Foreign Direct Investment (FDI): an independent judicial system, protection of property and contractual rights, good quality physical and ICT infrastructure, and easy access to South Africa. Namibia is upgrading its transportation infrastructure to facilitate investment and position itself as a regional logistics hub. An expansion at Walvis Bay Port concluded in 2019, and there are plans to extend and rehabilitate the national rail line, including to neighboring countries from the port. Namibia has the best roads on the African continent, according to the World Economic Forum. Namibia also has access to the Southern African Customs Union (SACU), the Southern African Development Community’s (SADC) Free Trade Area, and markets in Europe and China. Challenges to FDI in Namibia include a relatively small domestic market, high transportation costs, relatively high energy prices, and a limited skilled labor pool. A recent corruption scandal in the fishing sector resulted in the arrests of ministers and business leaders, tarnished the reputation of the ruling political party, cost Namibia billions, strained public trust of the government, and negatively impacted the environment for FDI.
As a post-apartheid country with one of the highest rates of inequality in the world, Namibia continues to look for ways to address historic economic imbalances. Proposed legislation, the New Equitable Economic Empowerment Bill (NEEEB), which the government has been working on for more than a decade, will look to create economic and business opportunities for disadvantaged groups, including in areas of ownership, management, human resource development, and value addition. Parliament continues to debate the bill. Also, the NIPA, although it is not yet in force, includes in Section 14 (c) a provision that investment must be for “the net benefit to Namibia, taking into account the contribution of the investment to the implementation of programs and policies aimed at redressing social and economic imbalances in Namibia.”
To access the ICS, visit the U.S. Department of State Investment Climate Statements website.