Namibia - Country Commercial Guide
Market Challenges

Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.

Last published date: 2020-08-29

Namibia is a small market and is heavily dependent on international trade.  It is among the countries with the largest income disparities in the world (a Gini coefficient index of 59.1 in 2015, according to the World Bank).  Despite high unemployment, there is a critical shortage of skilled labor.  The latest Labor Force Survey (2018 data) estimates the unemployment rate at 33.4 percent.  Although there is no local participation requirement for foreign investments except in the natural resource sectors (primarily mining and fishing), the government actively encourages partnerships with historically disadvantaged Namibians.  Employers should consider the impact of HIV/AIDS on their workforce.  In 2019, the adult prevalence rate was estimated to be 11.5 percent according to UNAIDS.  Due to ongoing government land reform efforts, foreigners are generally prohibited from purchasing agricultural land.  Employers often cite productivity as one of their major challenges.  The process for obtaining work permits for foreign employees is bureaucratically burdensome and time consuming.  Repercussions from the global COVID-19 pandemic include rising unemployment, stresses to supply chains, and significant disruptions to the tourism and hospitality industries.
Of 190 countries ranked in the World Bank’s Doing Business 2019 report, Namibia ranked number 104.  Namibia ranked lowest in the following three areas: Registering Property (174); Starting a Business (172); and Trading Across Borders (136).    

The law prohibits corruption, and the government has shown some willingness to address it.  Nevertheless, the World Bank’s Worldwide Governance Indicators reflected that corruption is a problem. Transparency International ranked Namibia 56 out of 180 countries in its 2019 Corruption Perceptions Index, which measures the perceptions of businesses and country analysts about the degree of corruption in a country.  Namibia scored 52 on the index (a score of 100 reflects a “highly clean” and 0 reflects a “highly corrupt” nation).  In November 2019, Namibian police arrested the now former Minister of Fisheries and Marine Resources, now former Minister of Justice, and additional prominent businessmen following media reports of their alleged involvement in the massive fishing license corruption scandal known as “Fishrot.”  The accused remain in prison as of August 2020 and face charges of corruption, fraud, tax evasion, and money laundering.    

Namibia’s standard (non-mining) corporate tax on earnings is 32 percent, in line with tax rates charged by other countries in the region.  Special provisions in some sectors may reduce this tax rate.  For mining, the corporate tax rate remains 37.5 percent for all but diamonds, for which the rate is 55 percent.    

As in much of southern Africa, the demand for electricity outstrips domestic supply.  To date, Namibia has escaped any large-scale power outages or load shedding, but it remains heavily reliant on buying electricity from South Africa.