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Information on key security and political risks which UK businesses may face when operating in Namibia.
The ‘Doing Business in Namibia’ is an essential read to help UK Companies avoid some of the common pitfalls businesses can face in Namibia. The guide offers a wide range of advice on issues such as: the economy, operating environment, regulatory and tax environment, and the UK Bribery Act 2011.
Independent Namibia was born out of a protracted struggle for national self-determination from European colonial powers and apartheid South Africa. National independence on 21st March 1990 was achieved after forty years of struggle, including peaceful resistance, armed struggle, a protracted bush war and a prolonged intensive diplomatic engagement with many of the world’s major powers centering on the United Nations. The cornerstone of independent Namibia’s system of government is the Namibian Constitution, agreed by consensus as a result of the multi-party Constituent Assembly in 1989. It makes provision for regular democratic elections, guaranteeing property rights, and welcoming foreign investment.
The election process consists of Presidential elections, in which an overall winner is chosen by direct popular vote to serve a 5-year term and the General elections choose a new National Assembly, where 96 members are directly elected by popular vote and 8 are appointed by the President, all candidates serve a 5-year term. The Namibian constitution allows Presidential candidates only two terms, so H.E. Hifikepunye Pohamba stepped aside for a new candidate to be elected in November 2014. The current President of the Republic of Namibia, Dr. Hage Geingob, was sworn in on 21st March 2015.
More information on political risk, including political demonstrations, is available in the FCO Travel Advice.
Namibia is an open economy closely tied to South Africa through continued membership of the World Trade Organisation, the Southern African Development Community, Southern African Customs Union and the Common Monetary Area. Up until late the final quarter of 2016, the Namibian Economy had been experiencing annual economic growth of 4.7%. However, at the beginning of 2017 the economy experienced a severe economic contraction of 1.6%, the most significant economic slump since 1990. The Economy has slowly began to recover, but faces a challenges in it’s ability to return previous levels of growth. Namibia’s economy is relatively diversified with important primary, secondary and tertiary sectors.
For more information, including on issues such as trade unions, corruption and human resources, please refer to the ‘Doing Business in Namibia’ guide).
Key economic developments
Namibia adopted Vision 2030 in 2004, as a national policy to spell out the country’s development programmes and strategies to achieve its national objective to become an industrialised country by 2030. The Vision is designed to promote the creation of a diversified, open market economy, with a resource-based industrial sector and commercial agriculture, with great emphasis placed on skills development.
Despite achieving independence in 1990, Namibia still has one of the highest levels of inequality in wealth distribution. The government established a New Equitable Economic Empowerment Framework (NEEEF) in 2011 to encourage firms to bring previously disadvantaged Namibian shareholders on board, to train and promote them into senior management positions, to use procurement to stimulate more local business, and to promote the well-being of the communities in which they operate. Companies wanting to do business with Government or requiring licences from Government have to be scored on each of NEEEF’s five pillars, three of which are mandatory: Ownership, Management Control and Employment Equity, and Human Resources and Skills Development, to reach a minimum score of 50 points. Under-performance in any pillar can be compensated by over-performance in others. Currently the NEEEF bill has not been finalized and is welcoming input from stakeholders.
In order to further stimulate sustainable economic development through foreign and domestic investment the Namibian Government has replaced the Foreign Investment Act, 1990, with the Namibia Investment Promotion Act, 2016. Under the current Act, the Minister of Finance reserves the right to determine monetary thresholds for different economic sectors, and all Namibian and foreign investors are required to register with the Namibia Investment Centre (NIC). Upon approval, investors shall receive a certificate and may then begin investing. Enforced by regulations, the Minister may reserve certain economic sectors or business activity as exclusive to certain categories of investors. Such reservations apply from a prescribed date, however investors who had lawfully invested prior to this date shall be entitled to their investment as originally agreed upon. The Namibian Government has also brought into power the Namibia Public Private Partnership Act 4 of 2017 which aims to create an ideal legal framework for investment through PPPs. Public Private Partnerships (PPP’s) will be regulated by the Ministry of Finance, which has a PPP Committee that will act as the decision making body of the Ministry. A separate PPP Unit exists which serves to assist government officials and private investors in creating feasible and sustainable PPPs.
In July 2009, the World Bank classified Namibia as an upper middle income country, Gross Domestic Product (GDP) per capita standing at US$4,720.00 in 2016.The Namibia Labour Force Survey showed that the unemployment rate stood at 29.60% in 2013 and 28.1% in 2014. Updated figures show a 5.9%increase in unemployment as the latest figures stand at 34.0% for 2016.
Namibia’s business environment comes 106th of 190 in the World Bank’s Ease of Doing Business Index, with strengths such as a growing market economy, macroeconomic stability, sustainable levels of government debt, stable and pragmatic business-friendly government, openness to international trade and investment, clear property rights, independent courts and free press, mostly equal treatment of foreign investors, simple and competitive tax system, currency and trade links to South Africa, good infrastructure, long coastline, warm dry climate, unspoilt beautiful landscapes and wildlife, lack of industrial pollution and low population. Namibia provides many opportunities for investors, such as minerals (including oil and gas), agricultural and tourism potential, infrastructure development, transport and logistics hub, potential regional base, proximity to South Africa and Angola, and enhanced access to Chinese and BRICS markets.
Namibia also has a double tax treaty with the United Kingdom; the 1962 treaty between the United Kingdom and South Africa as extended to Namibia.
Withholding Tax in Namibia places an increasing tax burden on multinationals that provide business consulting services to Namibian entities. Mining companies are taxed at a corporate tax for non-diamond mining rate of 37.5% for hard-rock mining and 55% for diamond mining. Petroleum exploration and production companies are taxed at a basic corporate tax rate of 35%, additional tax compliance on revenue may apply.
Namibia is preparing for the development of the Kudu Gas-to-Power Project, utilising its offshore gas reserves which incorporates the construction of the first large-scale gas fired power station in the SADC region. Namibia is currently facing a power shortage and currently imports up to 50% of its energy needs. Power infrastructure development is key to meeting Namibia’s growing energy demand; as well as that of the region.
British Business Group (BBG Namibia) was established in 2011 to provide an information sharing platform supported by the British High Commission in Windhoek. Regular meetings serve as a platform where commercial advice is provided and information exchanged between British companies. The BBG identifies, tackles and advises on hurdles to successful trade with Namibia. UK–Namibia bilateral trade in goods totalled £87.5 million in 2014, with imports of Namibian goods to the UK valued at £39.5 million and exports at £48 million. To further boost bilateral trade, the British High Commission has appointed a department of International Trade (DIT) Advisor and an Economic Diplomacy Officer.
3. Human rights
Namibia’s constitution includes a list of ‘fundamental rights and freedoms’, and strictures against discrimination as well as provision for independent entities - such as an Ombudsman - to protect human rights. There is a small NGO community involved in political and civic education. In general, freedom of association and the right to collective bargaining are respected by the government and employers, while workers exercise these rights in practice.
The law prohibits all forms of forced or compulsory labour, including by children, and although NGOs and media have alleged that these still do occur, the International Labour Organisation has noted Namibia’s drafting of regulations to combat child labour in hazardous sectors and inter-ministerial directive that all reports of child labour are to be investigated.
However, there continue to be some challenges for human rights in Namibia, including lengthy pre-trial detention and long delays during trials, discrimination against women and high levels of gender-based violence, discrimination of ethnic groups and indigenous minorities.
In November 2013, Namibia was elected by the UN General Assembly to serve on the United Nations Human Rights Council (HRC) for a period of 3 years.
4. Bribery and Corruption
Bribery is illegal. It is an offence for British nationals or someone who is ordinarily a resident in the UK, a body incorporated in the UK or a Scottish partnership, to take part in bribery anywhere in the world. Additionally, a commercial entity practicing business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere. Namibia is now ranked 53 out of 180 countries (ranked 51 in 2017) in Transparency International’s Corruption Perception Index (CPI).
Visit the Business Anti-Corruption portal page providing advice and guidance about corruption in Namibia and some basic effective procedures you can establish to protect your company from them.
Namibia established the Anti-Corruption Commission (ACC) in 2003, an agency of the executive branch of the Government of Namibia, with the aim to fight corruption.
The latest Ernst & Young-Namibia Fraud & Corruption Landscape Survey shows 79% of Namibian businesses view fraud & corruption as a big risk.
Read the information provided on our Bribery and corruption page.
5. Terrorism Threat
There is a low threat from terrorism. But you should be aware of the global risk of indiscriminate tourist attacks which could be in public areas, including those frequented by expatriates and foreign travellers. Namibia has pledged its commitment to working with international organisations, such as the UN and its Counter-Terrorism Implementation Task Force (CTITF), as well as the Eastern & Southern African Anti-Money Laundering Group.
Read the information provided on our Terrorism threat page.
6. Protective Security Advice
While most visits to Namibia are problem free, visitors should be aware that problems can arise. There are growing levels of violent street crime affecting foreign tourists, particularly in Windhoek. Muggers in Windhoek frequently target foreign tourists. Attacks can take place even in busy city centre locations in broad daylight.
You should keep your car doors locked and windows shut, especially in heavy traffic. Keep valuables off the seats and out of sight. There are incidents where gangs try to gain entry to vehicles at busy intersections in Windhoek, including during the day. Be alert to your surroundings if returning to your guest house or hotel, especially after dark.
Theft from vehicles, particularly at service stations, is common, so where possible do not leave your vehicle unattended at fuel stops. Elsewhere, keep your vehicle locked and valuable possessions out of sight. Residents of Namibia have reported incidents of interception of mail and theft of mail contents by Post Office workers in Namibia. Any valuable parcels or documents (e.g. bank and credit cards) should be sent by registered mail at least and preferably by a reputable commercial courier company.
Beware of pickpockets in town centres. Do not use taxis available for street hailing, particularly in Windhoek, as these have been involved in thefts. Instead, ask your hotel, guest house or tour operator to recommend a reputable taxi company. Do not enter townships at night unless accompanied by someone with local knowledge. Take precautions to safeguard valuables and cash, and deposit them in hotel safes, where practical. Keep large amounts of money, expensive jewellery, cameras and cell phones out of sight. Do not change large sums of money in busy public areas. Keep separate copies of important documents, including passports.
Remain with your group when visiting parks and game reserves. There have been cases of credit card skimming at some hotels and lodges around the country; unscrupulous employees have been accused of copying card details onto hand-held readers and passing the details on to criminal gangs. Visiting foreign tourists have been targeted. When paying by credit card, keep the card in full view at all times and always check your statement carefully to ensure you do not become a victim of fraud.
Read the information provided on our Protective security advice page.
7. Intellectual Property
Namibia is a member of The African Regional Intellectual Property Organisation (ARIPO) which means that all patents, designs or trademarks may be registered with the official intellectual property office of Namibia or with ARIPO. Namibia is also a member of the Berne Convention which protects copyright applications.
Read the information provided on our Intellectual Property.
8. Organised Crime
In 2013, Namibia hosted the G8 Public-Private Sector Dialogue on anti-money laundering and countering the financing of terrorism (AML/CFT).
Read the information provided on our Organised crime page.