Namibia’s policy uncertainties could be bad for investment

05 Jun 2019 21:00pm
WINDHOEK, 05 JUN (NAMPA) – Representatives of the International Monetary Fund (IMF) say the incomplete New Equitable Economic Empowerment Framework (NEEEF) and other incomplete policies could make Namibia a hostile ground for investment, an argument long-held by economists and pundits alike.
Although a bit sceptical to comment on NEEEF due to its link to politics, an IMF representative, a member of the 2019 Article IV mission in Namibia was clear that uncertainties that come with unclear economic policies are not good for doing business in any given country.
Through Article IV Consultations the IMF attempts to assess each country’s economic health and to forestall future financial problems.
“We don’t look at policies like this unless they are approved… it’s difficult from an external point of view to have a judgement,” IMF Mission Chief for Namibia, Geremia Palomba told journalists at a media briefing in Windhoek on Wednesday.
But Palomba acknowledged that NEEEF and other policies have made it difficult to do business in Namibia.
He was responding to a range of questions by the local media.
“It’s not just NEEEF [that creates uncertainties]. It [includes] some other laws or policy ideas that have not been decided and have been hanging for a long time. And these uncertainties are not really good for investment,” he said, without specifying the other policies.
The mission chief did not want to go into the contents of NEEEF, saying in its current format, the policy is not clearly defined.
“What matters to me is the uncertainties that the absence of the final decision brings to the general business environment,” he said.
Palomba also advised the Namibian Government to undertake reforms that would strengthen productivity and lift business confidence.
In parallel with fiscal adjustment policies, special emphasis should be placed on reducing policy uncertainty, streamlining business regulations and reducing obstacles that contribute to high electricity and transportation costs.
NEEEF seeks to bridge the gap between the haves and have-nots through empowerment and wealth redistribution.
It has six pillars, which include ownership, management control and employment equity, human resources and skills development, entrepreneurship development, corporate social responsibilities and value addition, and technology and innovation.
Despite it not materialising, Government set aside N.dollars 700 000 for NEEEF’s implementation during the 2018/19 financial year.
Last year, Government came under heavy criticism from opposition parties for scrapping the 25 per cent equity clause from NEEEF.
They rendered NEEEF useless without the clause which would have forced white-owned businesses to sell a 25 per cent stake of their businesses to previously disadvantaged Namibians.
Government has stood by its decision, saying the 25 per cent clause would have created a situation whereby a few black people are enriched alongside the previously advantaged whites.