Namibia Country Profile - 2012-2013 PDF

Namibia
Country profile
KPMG Africa Region 2012/2013
kpmgafrica.com
Document review and approval

Revision history
Version
Author
Date
Revision
This document has been reviewed by

Reviewer
Date reviewed
1.
2.
3.
4.
5.
This document has been approved by

Subject matter experts
Name
1.
2.
3.
4.
5.
Signature
Date reviewed
Contents
1
Background
1.1
Map
1.2
History
Population
2.1
Population figures
2.2
Population growth rate
2.3
Age structures (2013 estimates)
2.4
Gender ratios (2013 estimates)
2.5
Life expectancy (2013 estimates)
2.6
Ethnic groups
2.7
6.11 Black economic empowerment and

affirmative action
6.12 Work permits
6.13 Right to private ownership and
establishment
6.14 Real Estate
6.15 Protection of property rights
6.16 Transparency of the regulatory system
6.17 Efficient capital markets and portfolio
investment
1
1
1
2
2
2
2
2
2
2
Religions
6.18 Competition from state-owned

enterprises (SOEs)
2.8
Language
6.19 Corporate social responsibility
2.9
Education
6.20 Political violence
2.10 Health
6.21 Corruption
Economy
6.22 Bilateral investment agreements
Latest Economic indicators
6.23 Labour
Five-year forecast summary
6.24 Foreign trade zones/free ports
Annual trends
6.25 Foreign direct investment statistics
Government and Politics
6.26 Setting up a company
4.1
3.1
3.2
3.3
Political structure
Country Risk Ratings
Transport and Communica-tions
7.1
Sovereign risk
5.1
Railways
7.2
Currency risk
Roads
7.3
Banking sector risk
11
Ports
7.4
Political risk
11
5.4
Air transport
7.5
Economic structure risk
12
5.5
Telecommunications
Country Outlook for 20122016
12
Investing in Namibia
8.1
Political stability
13
6.1
Openness to, and restrictions upon

foreign investment
8.2
Election watch
8.3
International relations
13
6.2
Foreign ownership restrictions
8.4
Policy trends
14
6.3
Government tenders
8.5
Economic growth
14
6.4
Independent ratings on Namibias

investment climate
8.6
Inflation
Foreign investment in the Namibian stock

exchange
8.7
Exchange rates
8.8
External sector
5.2
5.3
6.5
Appendix 1
Sources of information
11
11
14
15
6.6
Infant industry protection
6.7
Conversion and transfer policies
15
6.8
Expropriation and compensation
16
6.9
Dispute settlement
16
6.10 Performance requirements/incentives
15
17
Background
1.1
Map
colonial occupation by the Germans and the

South Africans (technically on behalf of the
British crown reflecting South Africa's dominion
status within the British Empire).
The dry lands of Namibia were inhabited since
early times by Bushmen, Damara, and
Namaqua, and since about the 14th century AD
by immigrating Bantu who came with the Bantu
expansion. It became a German Imperial
protectorate in 1884 and remained a German
colony until the end of World War I. In 1920, the
League of Nations mandated the country to
South Africa, which imposed its laws and, from
1948, its apartheid policy.
1.2
History
Namibia, officially the Republic of Namibia, is a

country in southern Africa whose western
border is the Atlantic Ocean. It shares land
borders with Angola and Zambia to the north,
Botswana to the east and South Africa to the
south and east. It gained independence from
South Africa on 21 March 1990. Its capital and
largest city is Windhoek.
The name of the country is derived from the
Namib Desert, considered to be the oldest
desert in the world. Before its independence in
1990, the area was known first as German
South-West Africa (Deutsch-Sdwestafrika),
then as South-West Africa, reflecting the
In 1966, uprisings and demands by African

leaders led the United Nations to assume direct
responsibility over the territory. It recognized the
South West Africa Peoples Organisation
(SWAPO) as the official representative of the
Namibian people in 1973. Namibia, however,
remained under South African administration
during this time. Following internal violence,
South Africa installed an interim administration
in Namibia in 1985. Namibia obtained full
independence from South Africa in 1990, with
the exception of Walvis Bay and the Penguin
Islands, which remained under South African
control until 1994.
Hifikepunye Pohamba was elected president in
November 2004 in a landslide victory replacing
Sam Nujoma who led the country during its first
14 years of self rule. Pohamba was re-elected in
November 2009.
Population
2.1
Population figures
2.6
Namibia has a population of 2,182,852 (July

2013 est.)
2.2
Population growth rate
0.75% (2013 est.)
2.3
Age structures
(2013 estimates)
Age
Total %
Male
Female
0-14 years
32.6%
358,068
352,068
15-44 years
23.1%
254,809
249,256
25-54 years
35.3%
399,283
370,202
55-64 years
4.8%
47,261
57,565
65 years and
over
4.3%
40756
52,776
Source: CIA World Factbook.
2.4
Gender ratios
(2013 estimates)
Total population
1.02 male / female
At birth
1.03 male / female
Under 15 years
1.02 male / female
15 24 years
1.02 male / female
25 -54 years
1.07 male / female
55-64 years
0.83 male / female
65 years and over
0.78 male / female
Ethnic groups
The majority of the Namibian population is black

African mostly of the Ovambo ethnicity, which
forms about half of the population residing
mainly in the north of the country, although
many are now resident in towns throughout
Namibia. Other ethnic groups are the Herero
and Himba people, who speak a similar
language, and the Damara, who are ethnically
also of Bantu origin but speak the same "click"
language as the Nama.
In addition to the Bantu majority, there are large
groups of Khoisan (such as Nama and
Bushmen), who are descendants of the original
inhabitants of Southern Africa. The country also
contains some descendants of refugees from
Angola. There are also two smaller groups of
people with mixed racial origins, called
"Coloureds" and "Basters", who together make
up 6.5% (with the Coloureds outnumbering the
Basters two to one). There is a large Chinese
minority in Namibia.
Whites of Portuguese, Dutch, German, British
and French ancestry make up about 7% of the
population; they form the second-largest
population of European ancestry, both in terms
of percentage and actual numbers, in SubSaharan Africa after South Africa.
Most Namibian whites and nearly all those of

mixed race speak Afrikaans and share similar
origins, culture, and religion as the white and
coloured populations of South Africa. A smaller
proportion of whites (around 30,000) trace their
family origins directly back to German colonial
settlers and maintain German cultural and
educational institutions. Nearly all Portuguese
settlers came to the country from the former
Portuguese colony of Angola.
2.5
2.7
Life expectancy
(2013 estimates)
Total Population
52.03 years
Male
52.36 years
Female
51.69 years
Religions
The Christian community makes up more than

90% of the population of Namibia, with at least
50% of these Lutheran. At least 10% of the
population hold indigenous beliefs. The faith of
the remaining portion of the population is
unknown.
Missionary work during the 1800s drew many

Namibians to Christianity. While most Namibian
Christians are Lutheran, there also are Roman
Catholic, Methodist, Anglican, African Methodist
Episcopal, Dutch Reformed Christians and
Mormon (Latter-Day Saints) represented, as well
as some Jewish people.
2.8
Language
The official language is English. Until 1990,

German and Afrikaans were also official
languages.
Long
before
Namibia's
independence from South Africa, SWAPO had
decided that the country should become
officially monolingual, consciously choosing this
approach in contrast to that of its neighbour,
which was regarded as "a deliberate policy of
ethnolinguistic fragmentation." Consequently,
English became the sole official language of
Namibia. Some other languages have received
semi-official recognition by being allowed as
medium of instruction in primary schools.
Half of all Namibians speak Oshiwambo as their
first language, whereas the most widely
understood language is Afrikaans. Among the
younger
generation,
the
most
widely
understood language is English. Both Afrikaans
and English are used primarily as a second
language reserved for public communication,
but small first-language groups exist throughout
the country.
While the official language is English, most of
the white population speaks either German or
Afrikaans. Even today, 90 years after the end of
the German colonial era, the German language
plays a leading role as a commercial language.
Afrikaans is spoken by 60% of the white
community, German is spoken by 32%, English
is spoken by 7% and Portuguese by 1%.
Geographical proximity to Portuguese-speaking
Angola explains the relatively high number of
lusophones.
2.9
in primary school and 115,237 students in

secondary schools.
Most schools in Namibia are state-run, but a few
private schools are also part of the country's
education system. Among these are St. Pauls
College, Windhoek Afrikaanse Privaatskool,
Deutsche Hhere Privatschule, Windhoek
International School and Windhoek Gymnasium.
Curriculum development, educational research,
and professional development of teachers is
centrally organised by the National Institute for
Educational Development (NIED) in Okahandja.
There are four teacher training colleges, three
colleges of agriculture, a police training college,
a Polytechnic at university level, and a National
University.
2.10
Health
The AIDS epidemic is a large problem in

Namibia. Though its rate of infection is
substantially lower than that of its eastern
neighbour, Botswana, approximately 15% of the
adult population is infected with HIV. In 2001,
there were an estimated 210,000 people living
with HIV/AIDS, and the estimated death toll in
2003 was 16,000. The HIV/AIDS epidemic is
considered as a killer disease and as it has
reduced the number of working class people,
the number of orphans has increased. It falls to
the government to provide education, food,
shelter and clothing for these orphans.
The malaria problem seems to be compounded
by the AIDS epidemic. Research has shown that
in Namibia the risk of contracting malaria is
14.5% greater if a person is also infected with
HIV. The risk of death from malaria is also raised
by approximately 50% with a concurrent HIV
infection. Given infection rates this large, as
well as a looming malaria problem, it may be
very difficult for the government to deal with
both the medical and economic impacts of this
epidemic.
Education
Namibia has compulsory free education for ten

years between the ages of six and 16. Grades
17 are primary level, grades 8 12 secondary.
In 1998, there were 400,325 Namibian students
Economy
The economy is heavily dependent on the

extraction and processing of minerals for export.
Mining accounts for 8% of GDP, but provides
more than 50% of foreign exchange earnings.
Rich alluvial diamond deposits make Namibia a
primary source for gem-quality diamonds.
Namibia is the world's fourth-largest producer of
uranium. It also produces large quantities of zinc
and is a small producer of gold and other
minerals. The mining sector employs only about
3% of the population.
Namibia normally imports about 50% of its
cereal requirements; in drought years food
shortages are a major problem in rural areas. A
high per capita GDP, relative to the region, hides
one of the world's most unequal income
distributions, as shown by Namibia's 70.7 GINI
coefficient.
The Namibian economy is closely linked to

South Africa with the Namibia dollar pegged
one-to-one to the South African rand.
Until 2010, Namibia drew 40% of its budget
revenues from the Southern African Customs
Union (SACU). Increased payments from SACU
put Namibia's budget into surplus in 2007 for
the first time since independence. SACU
allotments to Namibia increased in 2009, but
dropped in 2010 and 2011 because of the global
recession, reducing Namibia's overall SACU
income.
Increased fish production and mining of zinc,
copper, and uranium spurred growth in 2003-08,
but growth in recent years was undercut by
poor fish catches, a dramatic decline in demand
for diamonds, higher costs of producing metals,
and the global recession. A rebound in diamond
and uranium prices in 2010 and the reopening of
copper mines in 2011 provided a significant
boost to Namibia's mining sector.
3.1
Latest Economic indicators

2011
2 Qtr
2012
3 Qtr
4 Qtr
1 Qtr
2 Qtr
2013
3 Qtr
4 Qtr
1 Qtr
Prices
Consumer prices (Dec 2001=100)
180.7
182.8
185
189.7
191.5
194.1
198
201.8
5.1
5.2
6.4
6.2
6.4
Exchange rate N$:US$ (av)a
6.787
7.15
8.099
7.749
8.122
8.257
8.684
8.956
Exchange rate N$:US$ (end-period)a
6.756
8.02
8.075
7.659
8.175
8.29
8.485
9.228
5.5
5.5
5.5
Deposit rate (av; %)
4.3
4.3
4.3
4.3
4.3
4.1
4.1
Govt bond yield rate (av; %)
n/a
n/a
n/a
9.4
n/a
n/a
n/a
n/a
Lending rate (av; %)
8.7
8.8
8.7
8.7
8.8
8.6
8.5
8.3
Prime rate (av; %)
9.8
9.8
9.8
9.8
9.8
9.3
9.3
9.3
Treasury bill rate (av; %)
5.7
5.6
5.6
5.7
5.7
5.5
5.3
5.7
22,358
24,620
26,319
26,587
27,369
27,018
24,949
26,403
8.8
8.8
14.1
17.1
22.4
9.7
-5.2
-0.7
50,814
54,617
57,710
57,183
60,538
61,250
61,330
60,955
5.5
11.9
15
19.1
12.1
6.3
6.6
111.9
116.9
121.8
121.3
120.4
135.9
133.5
131.5
-7.1
-6
6.7
7.1
7.6
16.3
9.6
8.4
Consumer prices (% change, year on year)

Financial indicators
Bank of Namibia overdraft rate (end-period; %)
M1 (end-period; N$ m)
M1 (% change, year on year)
M2 (end-period; N$ m)
M2 (% change, year on year)
IJG/IPPR Business Climate Index (Jan
2006=100)
IJG/IPPR BCI (% change, year on year)
Foreign trade & reserves

Goods exports fob ( N$ m)
8,339
7,574
8,757
8,005
8,745
8,026
8,227
8,567
Diamonds
1,961
1,452
1,951
1,618
2,697
1,969
1,796
1,943
Other minerals
1,577
1,643
1,825
1,777
1,664
1,730
1,823
1,696
Food & live animals
1,013
1,046
1,180
975
864
743
1,091
1,073
Manufactures
1,891
1,595
1,813
1,718
1,609
1,650
1,588
1,923
Goods imports fob (N$ m)
-9,197
-9,782
-12,165
-11,484
-11,470
-12,153
-11,297
-12,210
Trade balance (N$ m)
-858
-2,208
-3,409
-3,479
-2,724
-4,127
-3,069
-3,644
rvices balance (N$ m)
33
135
155
125
14
54
85
-28
Primary income balance (N$ m)
-1,582
-1,759
2,128
-899
-524
-501
-952
-1,834
Transfers balance (N$ m)
2,241
2,204
2,236
2,052
3,704
3,789
3,740
3,758
-167
-1,628
1,110
-2,201
470
-785
-196
-1,748
1,821
1,432
1,787
1,604
1,734
1,675
1,746
1,897
Current-account balance (N$ m)

Reserves excl gold (end-period; US$ m)
a The Namibia dollar (N$) is fixed at parity with the South African rand.
Source: Economist Intelligence Unit.
3.2
(% unless otherwise indicated)
Five-year forecast summary

2012a
2013b
2014b
2015b
2016b
2017b
Real GDP growth
5.0
4.2
6.1
7.3
5.8
4.9
Gross agricultural production

growth
2.0
2.0
1.7
1.9
2.3
2.3
Consumer price inflation (av)
6.5
5.5
4.5
5.0
5.3
5.6
Consumer price inflation (endperiod)
6.3
4.8
4.4
4.1
5.4
5.5
Lending rate (av)
8.7
8.2
8.0
8.0
8.7
8.9
-2.8d
-6.4
-4.4
-3.7
-2.3
-0.9
Exports of goods fob (US$ m)
4,883d
5,123
5,534
6,748
7,551
7,858
Imports of goods fob (US$ m)
-6,440d
-7,085
-7,515
-8,009
-8,493
-9,010
Current-account balance (US$

m)
-415d
-659
-587
-149
-27
-296
Current-account balance (% of
GDP)
-3.3d
-5.3
-4.3
-1.0
-0.2
-1.7
4,292d
4,312
4,667
4,872
4,934
4,895
Exchange rate N$:US$ (av)
8.20
9.28
9.39
9.65
9.90
10.20
Exchange rate N$:100 (av)
10.28
9.46
9.20
9.37
9.71
10.10
Exchange rate N$: (end-period)
11.11
11.95
12.08
12.22
12.66
13.59
Exchange rate N$:SDR (endperiod)
12.98
13.82
14.10
14.15
14.77
15.84
Government balance (% of
GDP)c
External debt (year-end; US$ m)
Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts.
Source: Economist Intelligence Unit.
3.3
Annual trends
Government
and Politics
Rally for Democracy and Progress (RDP; 8

seats)
Democratic Turnhalle Alliance (DTA; 2 seats)

National Unity Democratic Organisation
(NUDO; 2 seats)
Form of state
Unitary republic
Monitor Action Group (MAG)
Legal system
Key ministers
The Namibian legal system is based on the

constitution of 1990 and Roman-Dutch law.
Pres.
Hifikepunye POHAMBA
Prime Min.
Hage GEINGOB
Dep. Prime Min.
Marco HAUSIKU
4.1
Political structure
Official name
Republic of Namibia
National legislature
Bicameral; National Assembly, with 72
members elected by universal suffrage and
serving a five-year term, and up to six non-voting
members appointed by the President. National
Council, with limited powers of review and 26
members, two of whom are nominated by each
of the country's 13 regional councils, serving a
six-year term.
United Democratic Front (UDF; 2 seats)

Congress of Democrats (CoD; 1 seat)
Republican Party (RP; 1 seat)
All People's Party (APP; 1 seat)
South West Africa National Union (SWANU;
1 seat)
Min. of Agriculture, Water, & Forestry John MUTORWA

Min. of Defence
Nahas ANGULA
Min. of Education
David Namwandi
Min. of Environment & Tourism
Uahehua HERUNGA
Min. of Finance
Saara KUUGONGELWAAMADHILA
Min. of Fisheries & Marine Resources Bernard ESAU

Min. of Foreign Affairs
Netumbo NANDI-NDAITWAH
Min. of Gender Equality & Child

Welfare
Rosalia NGHINDINWA
Min. of Health & Social Service
Richard KAMWI
Min. of Home Affairs & Immigration
Pendukeni IIVULA-ITHANA
Min. of Information & Broadcasting
Joel KAAPANDA
Min. of Justice
Utoni NUJOMA
Min. of Labor & Social Welfare
Doreen SIOKA
Min. of Lands & Resettlement
Alpheus NARUSEB
Min. of Mines & Energy
Isak KATAL
The Head of State is Hifikepunye Pohamba,

elected President by universal suffrage in
November 2009.
Min. of Presidential Affairs
Albert KAWANA
Min. of Regional & Local Govt. &

Housing & Rural Development
Charles Ndaxu NAMOLOH,

Maj. Gen. (Ret.)
Min. of Safety & Security
Immanuel NGATJIZEKO
National government
Min. of Trade & Industry
Calle SCHLETTWEIN
Min. of Veterans Affairs
Nickey IYAMBO
National elections
The last legislative and presidential elections
were held in November 2009.
The next
elections are due in November 2014.
Head of state
President and his appointed cabinet; reshuffled

in December 2012.
Main political parties
South West Africa People's Organisation

(SWAPO), the ruling party (54 of the elected
seats in the National Assembly)
Min. of Works, Transport, & Communication Errki NGHIMTINA

Min. of Youth & National Service, Sport, &
Culture
Jerry EKANDJO
Dir. Gen., National Planning Commission
Helmut ANGULA
Attorney Gen.
Pendukeni IIVULAITHANA
Governor, Central Bank
Tom ALWEENDO
Ambassador to the US
Patrick NANDAGO
Permanent Representative to the UN, New Wilfried Inotira EMVULA

York
International organisation participation

ACP
AfDB
AU
FAO
G-77
IAEA
IBRD
ICAO
ICRM
IFAD
IFC
IFRCS
ILO
IMF
IMO
Interpol
IOC
IOM
IPU
ISO
ITSO
ITU
ITUC
MIGA
NAM
OPCW
SACU
SADC
UN
UNAMID
UNCTAD
UNESCO
UNHCR
UNIDO
UNISFA
UNMIL
UNMISS
UNOCI
UNWTO
UPU
WCO
WHO
WIPO
WMO
WTO
10
Transport and
Communications
Namibia's road network is generally well

maintained, and its rail, harbour and air services
are by and large efficiently operated. The
economy is therefore largely free from transport
bottlenecks. The country inherited a relatively
well-developed
broad
infrastructure
at
independence, although the apartheid system
had largely neglected outlying rural areas.
Infrastructure development is a vital component
of the government's strategy for accelerating
economic growth and raising living standards
across the country. However, the country's
large size and overall low population density
make the task both more difficult and more
expensive.
Government capital spending on infrastructure
over the next three fiscal years is projected at
N$10bn (US$1.22bn), more than double the
amount spent in the previous three years, to be
supplemented by N$5.5bn in concessional loans
from
donors.
The
country's
greatest
infrastructural weakness in recent years has
been its failure to increase national electricitygenerating capacity and its over-reliance on
imported electricity from South Africa.
The water supply network, which is operated by
a state-owned company, Namwater, covers
most of inland Namibia. It is fed by a series of
large dams and can normally meet most
demand for drinking water. However, demand
has risen because of population growth, and
reservoirs can run dangerously low during
droughts. Water supplies in the coastal strip
depend on underground aquifers and will be
inadequate to meet the demand of new uranium
mines
being
developed.
One
coastal
desalination plant has been constructed to
supply the Trekkopje uranium mine, which
started operations at the end of 2009, and
Namwater is planning to build a larger plant to
supply new uranium mines as well as its
domestic and industrial coastal customers.
5.1
Railways
The 2,380-km railway network is managed by

TransNamib Holdings, a state-owned company
which also runs a large road-haulage operation.
In 2002 work began on the northern rail
extension project to connect the network to the
main towns in Namibia's densely populated
north, which would also provide a direct outlet
to the sea for southern Angola's main economic
centres.
Construction of the 247-km first phase, between
Tsumeb and Ondangwa, was completed in
2006, with the 58-km second phase, between
Ondangwa and Oshikango on the Angolan
border, completed shortly afterwards. The third
phase is a short branch between Ondangwa and
Oshakati. Government spending on railway
infrastructure
and
maintenance
was
approximately N$485m during 2007/08-2009/10,
most of which was for completing the northern
rail extension.
5.2
Roads
The road network comprises over 5,000 km of

tarred and 27,000 km of gravel roads. Road links
to Namibia's eastern neighbours have been
improved
by
the
mainly
donor-funded
construction of the Trans-Kalahari and TransCaprivi highways. The first, completed in 1998,
greatly reduces the road distance between
South Africa's Gauteng province and Walvis Bay
and is part of a plan to develop Walvis Bay into
the main port serving Southern Africa. So too is
the Trans-Caprivi highway, from the Botswana
border at Ngoma to Rundu and Namibia's road
network, which was completed in 2001. The
opening of the Sesheke road bridge across the
Zambezi river in 2004 has provided a throughroad to Livingstone and Lusaka in Zambia,
ending the need for lorries to be ferried across.
A third road corridor to Walvis Bay, the TransCunene Corridor, is being planned, to link
northern Namibia with Lubango in southern
Angola.
5.3
Ports
Namibia's two harbours at Walvis Bay and

Lderitz are operated by the state-owned
Namibian Ports Authority (Namport). The Walvis
Bay Corridor Group, a public-private partnership,
is promoting the multi-modal trans-Caprivi and
trans-Kalahari corridors to develop Walvis Bay
into a regional cargo hub to provide a more
direct route for trade with the Americas and
11
northern and western Europe than Africa's ports

on the Indian Ocean.
Walvis Bay currently handles some 3m tonnes
of cargo a year, around one-third of which is
containerised. Container capacity is being
expanded to handle 500,000 containers per
year, compared with 140,000 in 2007, under a
five-year investment programme. The harbour is
also being deepened to accommodate larger
vessels, and a second ship-repair floating dock is
being added. The much smaller port at Lderitz
has become an important base for the offshore
diamond industry, and extra capacity will be
added when the Kudu offshore gasfield is
developed.
5.4
Air transport
New regional and international air links were

established after independence by the national
carrier, Air Namibia, including direct flights to
Frankfurt in Germany and the UK capital,
London, although the latter was recently
discontinued due to the airlines financial
difficulties. The airline has incurred persistent
operating losses, and the government continues
to bail it out with financial subsidies, which have
exceeded N$2.2bn to date.
The Namibia Airports Company is investing
N$15m in upgrading the main airports, including
new passenger facilities at Windhoek's Hosea
Kutako International Airport.
5.5
Telecommunications
Namibia was one of the last countries in Africa

to introduce competition in the mobile
communications sector when a second network
finally launched in 2007. Despite this, the
country has achieved a market penetration rate
well above the regional average. However, the
average revenue per user has more than halved
since then.
Fixed-line services are still a monopoly of TN,

but as a member of the WTO the government
plans to open the telecom sector to full
competition. TN entered the lucrative mobile
market as the third player with a CDMA network
but was put on hold by the industry regulator,
the Namibian Communications Commission,
until a new communications law was enacted
which, among other issues, addresses fixedmobile convergence. Since then, however, the
absence of effective regulation during the
transition to a new regulatory authority, the
Communications Regulatory Authority of
Namibia, has led to further delays in market
liberalisation.
Despite being reasonably competitive with six
ISPs, development of Namibias internet and
broadband sector has been held back by high
prices for international bandwidth, caused by the
lack of a direct connection to international
submarine fibre optic cables. This changed in
early 2011 when the WACS cable landed in the
country, with services launched in May 2012. In
parallel, Namibia is working to diversify its
transit access routes via neighbouring countries,
but broadband price reductions on the retail
level have only been moderate so far.
The country is well prepared for a broadband
boom, with 3G and 4G mobile services and a
national fibre backbone infrastructure in place.
Several WiMAX and other wireless broadband
services offer additional access options and are
standing by to bring additional competition to
the voice market as well, once internet
telephony is deregulated.
Both GSM operators MTC (managed by

Portugal Telecom) and Cell One (renamed Leo
by its new owner, Orascom) have entered the
internet and broadband market with 3G mobile
broadband services in a bid to create new
revenue streams. MTC introduced fourth
generation (4G) technology to the market in May
2012 when it launched an LTE network in the
capital, Windhoek. In addition, Telecom Namibia
(TN) is offering 3G mobile broadband services
using EV-DO technology.
12
Investing in
Namibia
Index/ranking
Year
Score
TI Corruption Index
2011
Score 4.4 | Ranking 57 of 183
Heritage Economic Freedom
2011
Score 62.7 | Ranking 73 of 179
World Bank Doing Business
2012
78 of 183
MCC Government Effectiveness
2009
0.55 (90%)
MCC Rule of Law
2009
0.59 (73%)
MCC Control of Corruption
2009
0.64 (87%)
MCC Fiscal Policy
2009
1.3 (75%)
MCC Trade Policy
2009
88.4 (100%)
MCC Regulatory Quality
2009
0.18 (67%)
MCC Business Start Up
2009
0.928 (34%)
MCC Land Rights Access
2009
0.571 (13%)
MCC Natural Resource Management
2009
78.16 (29%)
6.1
Openness to, and restrictions

upon foreign investment
The Government of the Republic of Namibia

(GRN) is committed to stimulating economic
growth and employment through attracting
foreign investment. The Foreign Investment Act
of 1990 is the primary legislation that governs
foreign direct investment in Namibia. The
Ministry of Trade and Industry (MTI) is the
governmental authority which is primarily
responsible for carrying out the provisions of the
Foreign Investment Act.
Under the Foreign Investment Act, the Ministry
established the Namibia Investment Centre
(NIC). The NIC serves as Namibias official
investment promotion and facilitation office. It is
often the first point of contact for potential
investors. The NIC is designed to offer
comprehensive services that range from the
initial inquiry stage through to operational
stages. The NIC also provides general
information packages and advice on investment
opportunities, incentives, and procedures. The
NIC is also tasked with assisting investors
minimise
bureaucratic
red
tape
by
coordinating work with government ministries
as well as regulatory bodies.
The NIC is also responsible for screening all
potential foreign investments. The NIC does not
follow a formal review process, but it does

evaluate the credibility of potential investors,
their business presentations, and gauges the
potential economic benefit to the country. The
NICs decisions are forwarded to the Minister of
Trade and Industry for final approval/rejection.
The Namibian Competition Commission (NaCC),
established in 2009 under the Competition Act
of 2003 is charged by the Ministry of Trade and
Industry with reviewing mergers (foreign and
domestic)
to
safeguard
and
promote
competition in the Namibian market. See the
section on Transparency of the Regulatory
system for more information on the Competition
Commission.
The Foreign Investment Act guarantees equal
treatment for foreign investors and Namibian
firms, i.e., 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. Investment
incentives and special tax incentives are also
available for the manufacturing sector.
The Registrar of Companies in the Ministry of
Trade and Industry is responsible for managing,
regulating, and facilitating the formation of
businesses. The Registrars office encourages
13
investors to seek professional advice from legal

practitioners, auditors, accounting officers, or
secretarial firms when registering their
businesses. The Namibian Embassy in
Washington provides a guide to registering a
business
which
can
be
found
at:
http://www.namibianembassyusa.org/images/Tr
ade/how%20to%20register%20a%20business
%20in%20namibia.pdf. Other laws that impact
foreign investors include the 2004 Companies
Act and the 1998 Close Corporation Act. These
laws provide the legal framework for the
establishment of business entities. The 2004
Companies Act went into force on November 1,
2010.
6.2
Foreign ownership
restrictions
While the Foreign Investment Act stipulates that

foreign investors should be treated the same as
Namibian investors, the Act acknowledges that
the government has the right to impose
restrictions. Most restrictions have to do with
land and natural resource rights and government
contracts
(tenders).
For
example,
the
government requires local participation before
issuing licenses to exploit natural resources and
has implemented additional restrictions in the
case of certain strategic minerals.
In 2011, Cabinet declared uranium, diamonds,
gold, copper and rare earth metals as strategic
minerals. The declaration aims to make the
Namibian Government and the people of
Namibia meaningful participants in the mining
sector by granting a State owned company the
right to own all new licenses issued for the
exploration and mining of strategic minerals.
While others may be formed, the current
company, Epangelo, is authorised to enter into
joint ventures with other parties for exploration
and/or development. Renewal of existing
licenses will not be affected.
The Land Reform Act regulates the acquisition
of agricultural land by foreign nationals. No
foreign national is allowed to acquire agricultural
land without the prior consent of the Minister of
Lands.
6.3
Government tenders
Government
transactions,
including
the
procurement of goods and services, are to be
coordinated through the Tender Board of
Namibia
(http://www.mof.gov.na/tender.htm).
The board comprises representatives from

various government ministries appointed by the
Minister of Finance. The Government is required
by law to publicise calls for tenders in the local
media and the Namibia Government Gazette.
Although the primary aim of the tender board is
to ensure that tenders are awarded to the best
bid in an open bidding process, the procurement
policy of Namibia does permit preferences
according to certain socio-economic goals and
strategies. Beneficiaries of these preferences
are not exclusively restricted to the historically
disadvantaged or Namibian citizens but are
reserved for individuals and companies
domiciled in Namibia. In addition, the Tender
Board may exempt procurements from the
tender procedures if they are valued at less than
N$10,000, or the Board finds good cause to
deem it impracticable or inappropriate to invite
tenders.
The board generally requires that companies are
registered with the Ministry of Trade and
Industry and that are in good standing with the
Department of Inland Revenue (the tax
authority) and the Social Security Commission.
6.4
Independent ratings on
Namibias investment climate
Independent ratings confirm that Namibia enjoys

a relatively positive investment climate. The
World Bank ranked Namibia 78th among 183
countries in its 2012 Doing Business report.
Namibia has seen a steady decline in its
rankings since 2007, when it was ranked 42nd
among the 175 countries evaluated. For the
2012 report, Namibia received its lowest
rankings for registering property, trading across
borders and starting a business. The World Bank
reported that Namibia requires on average 10
procedures and 66 days to start a business.
Registering property takes on average 7
procedures and 39 days, and the process costs
13.7 of the propertys value. It takes 9
documents and approximately 29 days to export
a product and it takes 7 documents and 24 days
to import an item (trade across borders),
according to the World Bank.
In September 2011, Moodys assigned Namibia
its second credit rating (in addition to a previous
Fitch rating) of Baa3/stable. In December 2011,
the Fitch Ratings service once again issued
Namibia a long term foreign currency rating of
BBB-, consistent with the ratings Fitch has
14
issued since 2005. For more information go to:

http://www.fitchratings.com.
In
2005,
the Southern
Africa Global
Competitiveness Hub (or Trade Hub), funded by
the U.S. Agency for International Development
(USAID), at the request of the MTI, conducted
an Investor Roadmap Study for Namibia. The
study identified 51 recommendations to improve
administrative, regulatory, and procedural issues
that could have a potential positive impact on
the attractiveness of Namibia to foreign direct
investment (FDI). In 2010, the Trade Hub
conducted a follow-up audit to review progress
on
implementing
the
recommendations
identified in the 2005 Investor Roadmap. The
audit determined that 16 recommendations had
been implemented, and 24 others were
pending.
6.5
Foreign investment in the

Namibian stock exchange
Foreigners must pay a 20% non-resident

shareholders tax on dividends, which could be
reduced to 10% if the beneficial owner of the
dividends is a company which holds directly or
indirectly at least 25% of the share capital of the
company paying the dividends. The rate of tax
can be reduced further in terms of provisions of
Double Tax Agreements. There are currently no
capital gains or marketable securities taxes. As a
member of the Common Monetary Area, the
Namibia Dollar (denoted as N$) is pegged oneto-one with the South African Rand.
6.6
Infant industry protection
The dairy and pasta industries have enjoyed

infant industry protection since 2003 under the
terms of a provision in the Southern African
Customs Union (SACU) Agreement. This means
the government charges up to 40 per cent
import tariffs on imported Ultra High
Temperature (UHT) milk products and pasta. As
an interim measure, quantitative restriction has
been put in place recently. The IPP is a form of
protection over the chicken processing and dairy
industries, adding value to Namibian products
and creating jobs.
6.7
Conversion and transfer

policies
The Foreign Investment Act of 1990 offers
investors meeting certain eligibility criteria

the opportunity to obtain a Certificate of
Status Investment (CSI). A status investor

is entitled to:
Preferential access to foreign exchange to
repay foreign debt, pay royalties and similar

charges, remit branch profits and dividends
Preferential access to foreign currency in

order to repatriate proceeds from the sale of
an enterprise to a Namibian resident
Exemption from regulations which might
restrict certain business or categories of

business to Namibian participation
Right to international arbitration in the event

of a dispute with the government
Payment of just compensation without
undue delay and in freely convertible

currency in the event of expropriation
To obtain a CSI, an investor must apply to
the Ministry of Trade and Industry. The

investors application must demonstrate the
extent to which the proposed investment
will:
Contribute toward Namibias development

objectives
Utilise Namibian labour and natural resources

to contribute to the economy
Assist in the advancement of socially,
economically or educationally disadvantaged

Namibians
Make provisions for equal opportunities for

women
Likely impact the environment, and the
proposed measures to mitigate adverse

environmental consequences
Non-status investors are subject to exchange

controls under the South African regulations
applicable to the Common Monetary Area
(CMA) South Africa, Lesotho, Swaziland and
Namibia.
There is no limit on investment transfers by
corporations to other countries. The Bank of
Namibia processes applications. Non-residents
may access local credit up to 200 percent of
their total shareholders investment to finance
foreign direct investments in Namibia. The
banking system is modern and closely tied to
the South African system. Three of the four local
commercial banks are subsidiaries of South
African banks. All local commercial banks handle
international transactions and trade financing.
15
Banking fees and charges are among the

highest in the world.
6.8
The Bank of Namibia (BoN) must approve all

loans originating from foreign lenders no matter
how the loan is denominated. To approve a loan
the BoN reviews the loan agreement between
the two (foreign and local) parties. The
documentation is provided by the local
commercial bank in which the loan funds will be
deposited. The BoN usually responds within
three days.
Government expropriations are rare. According

to the Foreign Investment Act, foreign investors
who have received a Certificate of Status
Investment (CSI) are entitled to just
compensation without undue delay and in freely
convertible currency if the government
expropriates
the
investors
property.
Furthermore,
the
courts
are
generally
independent and uphold contracts.
Loans may be denominated in local or foreign

currency; however interest rate caps on foreign
loans are contingent on the currency
denomination. The South African Rand (ZAR) is
viewed as local currency.
The primary mechanism for land reform that the

government continues to pursue is a willing
buyer-willing seller programme, which is
rooted in Namibian law specifically the Land
Reform Act of 1995. In 2003, this Act was
amended to allow the expropriation of property
in the public interest subject to the payment of
just compensation and in accordance with
legal procedures. Landowners have the option
to challenge the Government, including the price
offered for expropriation, through the court
system. As in other Southern African countries
emerging from apartheid, land reform is at the
forefront of public debate. The land reform
process draws criticism for the slow pace of
acquiring commercial farmland and resettling
Namibias landless.
Interest rate caps on foreign originating loans:
Foreign originating loans denominated in a

foreign currency may not exceed LIBOR +
200 basis points
Foreign originating loans denominated in a

local currency (ZAR or N$) many not exceed
the local prime rate + 300 basis points
These caps are determined by the Common

Monetary Area
The BoN requires that the principal payment on

a foreign originated loan may not be shorter than
six months. The BoN must approve the principal
payment prior to the transaction. The BoN
essentially reviews that the principal payment is
in line with what was in original loan agreement.
The local commercial bank handling the principal
payment provides the requisite documents to
the BoN. The BoN usually responds within 3
days.
The BoN does not review interest payments. In
other words, commercial banks can transmit
interest payments without the BoN's review.
The BoN has never faced a situation in which it
restricted a loan repayment. Foreign currency
reserves have, to date, always been sufficient to
cover foreign loan payments. The CMA and thus
the BoN is moving toward relaxing the controls
on foreign loans (i.e., no longer requiring
approval).
Expropriation and
compensation
Under its land reform programme the

government has attempted the expropriation of
unproductive agricultural land from both
domestic and overseas (primarily German)
landowners. In 2005, the only year in which the
Government took such action, the GRN
expropriated four farms. The High Court of
Namibia on March 6, 2008 made its first ruling
on the legality of expropriation under the land
reform programme. The Court ruled the
programme was constitutional but found that
the Ministry of Lands and Resettlements
administration of the expropriation process had
violated Namibian law on several grounds. As a
result of the ruling, two farms were returned to
their owners, while the GRN compensated in
full the absentee owners of the other two
farms.
6.9
Dispute settlement
The Foreign Investment Act allows for the

settlement of disputes by international
arbitration for investors that have obtained a
Certificate of Status Investment (CSI). The CSI
must also include a provision for international
16
arbitration. The Act stipulates that arbitration

shall be in accordance with the Arbitration
Rules of the United Nations Commission on
International Trade Law in force at the time
when the Certificate was issued unless the CSI
stipulated another form of dispute resolution.
There is no domestic arbitration body. Investors
without a CSI that encounter a dispute will have
to address their dispute in the Namibian courts,
or the court system which has jurisdiction
according to the investors contract. The
Namibian court system is independent and is
largely perceived to be free from government
interference. Per the Criminal Procedure Act of
2004, foreign court judgments may be accepted
if a bilateral treaty is in place.
Namibias legal system, based on the Roman
Dutch Law, is similar to South Africas legal
system. The system provides effective means
to enforce property and contractual rights. The
Companys Act of 2004 governs company and
corporate liquidations while the Insolvency Act
61 of 1936 governs insolvent individuals and
their estates. The Insolvency Act details
sequestration procedures and the rights of
creditors. A new Insolvency Amendment Bill
was passed in 2005 but has not yet been signed
into law.
As the one-stop-shop for investors, the NIC
should be the body that first learns of an
investment dispute between a foreign investor
and a domestic enterprise. The NIC has never
received a report of an investment dispute.
Namibia signed but has not ratified the
Convention on the Settlement of Investment
Disputes Between States and Nationals of
Other States.
6.10
Performance
requirements/incentives
Namibia does not impose performance

requirements as a condition for establishing,
maintaining, or expanding investments on
foreign investors. The requirements in place are
mostly imposed as a condition to access tax and
investment incentives. For example, to benefit
from incentives in a planned export processing
zone, investors are required to export a certain
percentage of the finished product. There is no
legal requirement for investors to purchase from
local sources. However, for certain industries,
there are local content requirements to exempt
final products from duties under the Southern

African Customs Union (SACU).
Incentives:
Incentives are mainly aimed at stimulating
manufacturing and attracting foreign investment
to Namibia and promoting exports. To take
advantage of the incentives, companies must be
registered with the Ministry of Trade and
Industry (MTI) and the Ministry of Finance. Tax
and non-tax incentives are accessible to both
existing and new manufacturers. The MTI has
developed a brochure titled Special Incentives
for Manufacturers and Exporters which is
available from the Namibia Investment Centre
(NIC). Namibia has also established an Export
Processing Zone (EPZ) regime that offers
favourable conditions for companies wishing to
manufacture and export products for regional
and international markets.
The Ministry of Trade and Industry is reviewing
the Foreign Investment Act. According to
government sources, the impetus to change the
act is the desire to provide domestic investors
with the same incentives afforded foreign
investors. Government is also contemplating
expanding incentives beyond the manufacturing
sector to service industries (primarily hospitality
and tourism).
Import Permits:
The Ministry of Trade and Industry requires
import permits for products entering the
country. Products subject to non-automatic
import licensing are:
Medicines
Chemicals
Frozen and chilled fish
Meat including game
Live animals
Genetic materials
Pornographic materials
Controlled agronomic products
Controlled petroleum products
Firearms and explosives
Diamonds
Coins
Gold, and other minerals
17
Works of art which have been in Namibia for

more than 50 years
Almost all second-hand goods, including

clothing and motor vehicles
In practice, the Ministry of Trade and Industry

does not issue licenses for used clothing
imports.
Most non-agricultural imports only require a
permit issued by MTI. However, depending on
the
agricultural
product,
additional
documentation may be necessary. The
Namibian Agronomic Board issues permits for
the import, export, and transit of controlled
agronomic crops such as wheat, wheat
products, corn, and corn products. Agronomic
crops and derivatives and plants and plant
products also require a phyto-sanitary certificate
issued by the Ministry of Agriculture, Water and
Forestry (MAWF).
Retailers of fruits, vegetables, and other crop
products must purchase 27.5 percent of their
stock from local farmers. The Namibian Meat
Board regulates the import and export of live
animals (cattle, sheep, goats and pigs) and
derivative meat products. Importers of these
products must demonstrate compliance with
the countrys animal health standards by
obtaining a veterinary import permit from the
Directorate of Veterinary Services. The import of
wood and lumber products requires permits
from the MAWF.
Namibia is a party to the WTO Agreement on
Import Licensing.
6.11
Black economic
empowerment and
affirmative action
The
government
actively
encourages
partnerships with historically disadvantaged
Namibians. Although the Government does not
have a codified Black Economic Empowerment
(BEE) program, the Ministry of Labour and Social
Welfares Equity Commission requires all firms
to develop an affirmative action plan for
management positions and to report annually on
its implementation.
In November 2011, the Prime Minister tabled
the New Equitable Economic Empowerment
Framework which aims to create conditions in
which the distribution of income becomes far
more equitable than it is at present. It is not

clear whether this policy will be approved and
implemented. Namibias Affirmative Action Act
strives
to
create
equal
employment
opportunities, improve conditions for the
historically
disadvantaged,
and
eliminate
discrimination.
The commission facilitates training programmes,
provides technical and other assistance, and
offers expert advice, information, and guidance
on implementing affirmative action in the work
place.
In certain industries the government has
employed different techniques to increase
Namibian participation. In the fishing sector,
companies pay lower quota fees if they operate
Namibian-flagged vessels that are based in
Namibia, with crews that are predominantly
Namibian. The Minister of Mining and Energy
has made clear that prospective mining
companies
must
indicate
and
show
commitment
to
empower
previously
disadvantaged Namibians in their applications
for exploration and mining licenses.
6.12
Work permits
The lengthy process of obtaining work permits

is among investors greatest complaints in
Namibia. Although the government cites the
unemployment rate as its motivation for a strict
policy on work permits, generally Namibia does
not yet have the available skills capacity to fill
the jobs which foreigners seek.
6.13
Right to private ownership

and establishment
The Namibian Constitution guarantees all

persons the right to acquire, own and dispose of
all forms of property throughout Namibia, but
also allows Parliament to make laws concerning
expropriation of property and to regulate the
right of foreign nationals to own or buy property
in Namibia. There are no restrictions on the
establishment of private businesses, size of
investment, sources of funds, marketing
products, source of technology, or training in
Namibia.
6.14
Real Estate
Foreign investors can purchase and own land in

Namibia. There is an exception related to
agricultural land. Due to Namibias ongoing land
18
reform and resettlement process, legislation

restricts
non-resident
foreigners
from
purchasing
agricultural
farmland.
Some
stakeholders have called for the expropriation of
agricultural land owned by non-resident
foreigners
(so-called
absentee
owners).
However, to date, the government has not
engaged in any significant expropriation of
farmland.
6.15
Protection of property rights
The Namibian legal system protects and

facilitates acquisition and disposition of property
such as land, buildings, and mortgages. All
deeds of sales are registered with the Deeds
Office. Property is usually purchased through
real estate agents and most banks provide credit
through mortgages. The Namibian Constitution
prohibits
expropriation
without
just
compensation.
Namibia is a party to the WIPO Convention, the
Berne Convention for the Protection of Literary
and Artistic Works, and the Paris Convention for
the Protection of Industrial Property. Namibia is
also a party to the Protocol Relating to the
Madrid Agreement Concerning the International
Registration of Marks and the Patent
Cooperation Treaty. Namibia is a signatory to the
WIPO Copyright Treaty and the WIPO
Performances and Phonograms Treaty.
The responsibility for IPR protection is divided
among three government ministries. The
Ministry of Trade and Industry oversees
industrial property and is responsible for the
registration of companies, private corporations,
patents, trademarks, and designs. The Ministry
of Information and Communication Technology
manages copyright protection, while the
Ministry of Environment and Tourism protects
indigenous plant varieties and any associated
traditional knowledge of these plants.
In April, 2010 the Ministry of Trade and Industry
tabled the updated Industrial Property Bill, which
proposes to establish an Industrial Property
Office to handle the administration of patents,
marks and designs. However, parliament has
not yet passed the bill.
The Ministry of Information and Communication
Technology has drafted amendments to the
Copyright and Neighbouring Rights Protection
Act of 1994 with the aim of bringing it in line
with the TRIPS Agreement and the WIPO
treaties. The amendments also aim to improve

standards of IPR protection and include new
aspects such as satellite, traditional knowledge
and folklore issues. The new amended act has
however not yet been passed.
Two copyright organisations, the Namibian
Society of Composers and Authors of Music
(NASCAM) and the Namibian Reproduction
Rights Organisation (NAMRRO), are the driving
forces behind the governments anti-piracy
campaigns. NASCAM administers intellectual
property rights for authors, composers and
publishers of music. NAMRRO protects all other
intellectual property rights including literary,
artistic, broadcasting, satellite, traditional
knowledge and folklore.
6.16
Transparency of the
regulatory system
The Competition Act of 2003 establishes the

legal framework to safeguard and promote
competition in the Namibian market. The
government, through the Competition Act, has
designed a legal and regulatory framework that
attempts to safeguard competition while
boosting the prospects for Namibian businesses
as well as recognising the role of foreign
investment. The act is intended to promote:
The efficiency, adaptability and development

of the Namibian economy
Competitive prices and product choices for

customers
Employment and advancement of the social

and economic welfare of Namibians
Expanded
opportunities
for
participation in world markets
Namibian
Participation of small enterprises in the

economy by ensuring a level playing field
Greater enterprise ownership particularly

among the historically disadvantaged
The act established the Namibia Competition

Commission (NaCC) which was officially
launched in December 2009. The NaCC has the
mandate to review any potential mergers and
acquisitions that might limit the competitive
landscape or adversely impact the Namibian
economy. The Minister of Trade and Industry is
the final arbiter on merger decisions and may
accept or reject an NaCC decision. Any investor
can file an appeal with the MTI but there is no
formal process. In 2010 the NaCC approved
19
some mergers by foreign buyers and rejected

the merger of two cement companies. In 2011,
the roles and authorities of the Ministry and the
NaCC came under question in the Namibian
courts in the proposed merger between
Walmart and South African Massmart. The
merger was approved in spring 2012.
In many sectors, a relatively effective and
transparent regulatory system exists. In 2000,
the government established the Electricity
Control Board (ECB), which is responsible for
regulating the energy sector. The Namibian
parastatal responsible for providing electricity,
NamPower, currently enjoys a virtual monopoly.
Though procedures for the establishment of
Independent Power Producers (IPP) exist, to
date no power purchasing agreements of note
have been concluded. However, the ECBs core
function is to regulate electricity generation,
transmission, distribution, supply, import and
export within the country. The ECBs vision is
for Namibia to have a competitive and
transparent electricity market. As regulator, the
ECB is responsible for recommending to the
Minister of Mines and Energy which companies
or entities should receive licenses.
In October 2009 President Pohamba signed into
law a new Communications Act replacing the
Communications Commission Act (Act 4 of
1992). The 2009 act also amended certain
sections
under
the
Posts
and
Telecommunications Act, 1992 (Act 19 of 1992).
Advocates of the new act argued it was needed
to
level
the
playing
field
for
all
telecommunication operators and improve
competition. Many implementing regulations are
not yet in place.
Under the act, the Communications Regulatory
Authority of Namibia (CRAN) replaces the
Namibian Communication Commission (NCC),
which only had limited regulatory authority. Civil
society groups argue that the new act does not
provide
the
CRAN
enough
regulatory
independence. Such groups note that the
Minister of Information and Communication
Technology alone may appoint the CRAN
Chairperson and Vice-Chairperson, and that the
Minister must concur on the prescribing of any
new broadcast licenses.
The
state-owned
Namibian
Broadcasting
Corporation (NBC) - which transmits TV and
radio services - is exempted from licensing
procedures enumerated in the act. The act also
contains intelligence gathering (intercept)

provisions which civil society groups have
argued violate civil liberties and the Namibian
constitution. To comply with the intercept
provisions,
telecommunications
companies
could be saddled with many technical burdens
and significantly higher costs, critics argue.
Note, however, that these provisions have to
date never been implemented.
The Bank of Namibia (BoN) regulates the
banking sector. In 2010, the BoN rejected a bid
by South Africas ABSA Group to acquire a 70
percent stake in Capricorn Holdings, the parent
company of Bank Windhoek. The BoN argued
that the ABSAs acquisition would make all
banks foreign-owned, as Bank Windhoek is the
only bank in Namibia that has majority domestic
ownership. As all other banks in Namibia are
South African-owned the BoN also argued that
permitting the merger would have exposed
Namibia to single country risk and would
make the banking system more susceptible to
cross-border shocks through the risk of
contagion. In November, the BoN granted a
provisional license to SME Bank Namibia
Limited, a majority government owned banking
institution that the GRN wishes to use to help
provide better access to financial services for
small and medium Namibian enterprises.
The Namibia Financial Institutions Supervisory
Authority (NAMFISA) regulates non-banking
financial institutions. The authority aims to
reduce financial crime through developing and
implementing effective regulatory systems.
6.17
Efficient capital markets and

portfolio investment
There is a free flow of financial resources within

Namibia and throughout Common Monetary
Area (CMA) countries of the South African
Customs Union (SACU) which include Namibia,
Swaziland, South Africa and Lesotho. Capital
flows with the rest of the world are relatively
free, subject to South African exchange controls
(discussed above in Conversion and Transfer
Policies). The Namibia Financial Institutions
Supervisory Authority (NAMFISA) registers
portfolio managers and supervises the actions of
the Namibian Stock Exchange (NSX) and other
non-banking financial institutions.
Although the NSX is the second largest stock
exchange in Africa, this distinction is largely
because many South African firms listed on the
20
Johannesburg exchange are also listed (dual

listed) on the NSX. The government has also
introduced investment incentives to attract
mutual funds and foreign portfolio investors that
have energised emerging stock markets
elsewhere in the developing world. By law,
Namibias government pension fund and other
Namibian funds are required to allocate a certain
percentage of their holdings to Namibian
investments. Namibia has a world-class banking
system that offers all the services needed by a
large company. Foreign investors are able to get
credit on local market terms.
There are no laws or practices by private firms in
Namibia enabling incorporations to prohibit
foreign investment, participation or control; nor
are there any laws or practices by private firms
or government precluding foreign participation in
industry standards setting consortia.
6.18
Competition from stateowned enterprises (SOEs)
While Namibian companies are generally open

to foreign investment, government owned
enterprises have to date generally been closed
to all investors (Namibian and foreign). State
Owned Enterprises (SOE also known as
parastatals) include a wide variety of commercial
companies, financial institutions, regulatory
bodies, educational institutions, boards and
agencies. Generally, employment at SOEs is
highly sought after because their remuneration
packages are not bound by public service
constraints. Parastatals provide most of the
essential services such as telecommunications,
transport, water, and electricity. The following
are the most prominent commercial SOEs:
Air Namibia (Air carrier)

Namibia
Airports
Company
(Airport
management company)
Namibia Wildlife Resorts (Tourism)

Namport (Maritime Port Authority)
Nampost (Postal and courier services)
Namwater
provisioning)
(Water
sanitation
Roads Contractor Company

Telecom
Namibia
and
(Fixed-line
telecommunications)
TransNamib (Rail company)

NamPower
(Energy
generation
transmission)
and
The government owns a host of other

enterprises, from media ventures to a fishing
company. In December 2009, the Minister of
Mines and Energy inaugurated Epangelo Mining,
a wholly government-owned mining company.
Parastatals own assets worth approximately
40% of GDP and most receive subsidies from
government. In certain industries, SOEs have
been perennially unprofitable and have only
managed to stay solvent because of
government subsidies. In industries where
private companies compete with SOEs (i.e.,
tourism, fishing, communications, etc) SOEs are
sometimes perceived to receive favourable
concessions from government.
Foreign investors have participated in joint
ventures with government in certain sectors
(i.e., mobile telecommunications and mining).
The Government sold a 34% share in 2006 in its
state-owned mobile phone company, MTC, to
Portugal Telecom. NamDeb, a 50-50 partnership
between the government and DeBeers has
mined Namibias land-based diamonds since
1994. There has been some debate on whether
to list parastatal companies on the Namibian
Stock Exchange (NSX), but there are no plans to
do so in the near future.
The 2006 State Owned Enterprises Governance
Act, which has yet to be fully implemented,
requires each SOE to submit an annual business
and financial report to its portfolio minister at
least three months prior to the beginning of
each financial year. With important exceptions,
very few SOEs have consistently provided such
annual reports. This Act has established a
Cabinet Committee called the SOE Governance
Council consisting of the Prime Minister, the
Minister of Finance, the Minister of Trade and
Industry, the Attorney General and the Director
General of the National Planning Commission
which will be tasked with developing common
principles of good governance and a common
policy framework. This Council also will approve
the appointment of board members.
To date, the Cabinet Minister whose portfolio
includes oversight of a particular SOE nominates
the SOEs board members but must get Cabinet
approval before the board member can be
officially appointed. Chief Executive Officers
(CEO) report to the board and senior
management report to the CEOs. In most
cases, SOEs can make business decisions
without consulting government. In May 2010,
Parliament approved the Governance Policy
21
Framework on SOEs. This framework requires

that performance agreements be signed
between all SOEs and Government. All chief
executives and chairpersons of boards will be
required to enter into five-year performance
agreements with Government.
Namibia does not have a Sovereign Wealth Fund
(SWF). The Government Institution Pension
Fund (GIPF) is a pension fund established to
provide retirement and benefits for employees
in the service of the Namibian Government as
well as institutions established by an Act of the
Namibian Parliament. According to the GIPF, it
represents 61% of the Namibian retirement
funds industry.
6.19
Corporate social
responsibility
There is a general awareness of Corporate

Social Responsibility (CSR) in Namibia amongst
the business community, although there is little
research to show that Namibian consumers
choose to trade with firms based on their CSR
programmes.
Most large firms including SOEs have well
defined (and publicised) social responsibility
programmes that provide assistance in areas
such as education, health, environmental
management, sports, and Small Medium
Enterprise (SME) development. Many firms
include their Black Economic Empowerment
(BEE) programmes within their larger CSR
programmes.
Firms operating in the mining sector Namibias
most important industry generally have visible
CSR programmes that focus on education,
community
resource
management
and
environmental sustainability, health, and BEE.
Many Namibian firms have HIV/AIDS workplace
programmes to educate their employees about
how to prevent contracting and spreading the
virus/disease. Some firms also provide antiretroviral (ARV) treatment programmes beyond
what may be covered through government and
private insurance systems.
6.20
Political violence
Namibia is a stable multi-party and multi-racial

democracy. The protection of human rights is
enshrined in the Namibian constitution, and the
government generally respected those rights.
Political violence is rare, but there were some
political confrontations and violent incidents in

2008 and 2009 between supporters of the
opposition Rally for Democracy and Progress
(RDP) and pro-government SWAPO party
members. Nevertheless, damage to commercial
projects and/or installations as a result of
political violence is considered unlikely. The
State Departments 2010 Human Rights Report
for Namibia provides additional information on
incidents of political violence in the country.
6.21
Corruption
Transparency Internationals 2011 Corruption

Perceptions Index ranked Namibia 57 out of 178
countries. Namibia scored 4.4 just behind South
Africas score of 4.5. Only five sub-Saharan
African countries (Botswana, Mauritius, Cape
Verde, Seychelles and South Africa) ranked
higher.
There are no international or regional
watchdog organisations operating in the
country.
The Namibian Government passed the AntiCorruption Act in May 2003, appointed the
director and deputy director of the resulting AntiCorruption Commission in October 2005, and
launched the opening of the office in 2006. The
Commission attempts to complement civil
societys anti-corruption programmes and
support existing institutions such as the
Ombudsman's Office and Attorney General.
Anti-corruption legislation is in place to combat
public corruption. Some critics charge that the
ACC narrowly interprets its mandate and
focuses on minor cases. The ACC has
countered that it requires additional funding in
order to properly fulfil its mandate. The ACC
receives 700 to 900 reports of corruption per
year, but less than 10 percent are deemed
pursuable.
In
a
nationwide
survey
commissioned by the ACC and released in
December 2011, corruption was listed at the
second most important development challenge
facing
Namibia
(12.8
percent,
after
unemployment at 39.6 percent).
Namibia has signed and ratified the UN
Convention Against Corruption and the African
Unions African Convention on Preventing and
Combating Corruption. Namibia signed the
Southern African Development Communitys
Protocol Against Corruption.
22
6.22
Bilateral investment
agreements
Namibia has ratified reciprocal investment

promotion and protection treaties with
Switzerland, Malaysia, France, Germany, the
Netherlands, Cuba, Finland, Spain, Austria,
Angola, Vietnam, Italy. China and the Russian
Federation have signed investment agreements
with Namibia, but the agreements have yet to
be ratified. There is no bilateral investment
agreement and no bilateral tax treaty between
the United States and Namibia. In 2008, SACU
(of which Namibia is a member) signed a Trade,
Investment and Development Cooperation
Agreement (TIDCA) with the United States of
America, and work continues in pursuit of a Free
Trade Agreement between the United States
and SACU.
As a member of the Southern African Customs
Union (SACU), Namibia will be a beneficiary of
SACUs free trade agreement with the European
Free Trade Association (Iceland, Lichtenstein,
Norway, and Switzerland) currently awaiting
signatures and is part of negotiations for trade
agreements with Mercosur (Argentina, Brazil,
Paraguay, and Uruguay). SACU plans to extend
its free trade network to the EU, China, Egypt,
India, Kenya, and Nigeria. Namibia also has an
FTA with Zimbabwe that was finalized in 1993.
The Southern African Development Community
(SADC) negotiating bloc have agreed on an
interim Economic Partnership Agreement (EPA)
with the European Union, but Namibia remains
the only country which has not yet ratified it.
6.23
Labour
The Namibian Constitution allows for the

formation of independent trade unions to
protect workers rights and to promote sound
labour relations and fair employment practices.
Namibia has ratified six of the International
Labour Organisations fundamental conventions.
Businesses operating within the EPZ are
required to adhere to the Labour Act.
While there is a pool of qualified workers in
varying professions in Namibia, there is a
shortage of specialized skilled labour. Employers
often cite labour productivity and the shortage of
skilled labour as one of the biggest obstacles to
business growth. This shortage appears to be
linked to weaknesses in Namibias education
sector. The 2012 World Economic Forum, Global
Competitiveness Report ranked Namibia 113th

out of 139 countries in the Higher Education and
Training category, and 114th in the Health and
Primary Education category. Additionally, that
report identified poorly educated workforce as
the most problematic factor for doing business
in Namibia (selected by 16.9 percent of
respondents).
The
Government
offers
manufacturing
companies special tax deductions of up to 25
percent if they provide technical training to
employees. The Government will also reimburse
companies for costs directly related to
employee training under approved conditions.
The 2007 Labour Act, which entered into force
in November 2008, contained a provision that
prohibited the hiring of temporary or contract
workers (labour hire), but the provision was
ruled unconstitutional by the Supreme Court. In
late 2011, the Government tabled in Parliament
amendments to the Labour Act introducing strict
regulations with respect to the use of Labour
Hire, and defining the user of temporary
workers as their legal employer, under a
triangular employment relationship. In addition
the amendments place strict limitations on
short-term employment contracts. These
amendments may effectively make the use of
labour hire non viable. In September 2012 the
High Court reserved judgement on the matter.
6.24
Foreign trade zones/free

ports
Foreign firms enjoy the same investment

opportunities as local companies. There are no
free ports in Namibia, although NamPort, the
national
port
authority,
is
considering
establishing a free port distribution centre at
Walvis Bay. Botswana, Zambia and Zimbabwe
have concluded agreements to establish dry
ports for the clearance of goods destined to
their countries; however, to date, only Zambia
has begun construction.
Export processing Zones (EPZ):
Companies with Export Processing Zone (EPZ)
status can set up operations anywhere in
Namibia. There are no restrictions on the
industrial sector provided that the exports are
destined for markets outside the SACU region,
earn foreign exchange, and employ Namibians.
EPZ benefits include no corporate tax, no import
duties on the importation of capital equipment
23
or raw materials, and no VAT, sales tax, stamp

or transfer duties on goods and services
required for EPZ activities. Non-residents
operating in an EPZ may hold foreign currency
accounts in local banks. The Government also
provides grants to EPZ companies for training
programs to improve Namibian workers skills
and productivity.
The Offshore Development Company (ODC)
administers the countrys Export Processing
Zone (EPZ) regime. However, ODC has been at
the centre of a 2005 corruption scandal involving
the loss of 100 million Namibian dollars
(approximately 10 million US$) in investments.
ODC maintains that it is financially stable and is
negotiating repayment.
6.25
FDI as Percent
FDI as of Gross Fixed
Percent of
Capital
GDP
Formation
Year
USD
(Millions)
2007
733
43.6
35.3
2008
720
39.3
33.3
2009
516
33.6
24.5
2010
858
44.6
32.2
Although decreased investments in Namibian

equities led to a steep decline in FDI in 2009,
FDI figures have rebounded in 2010 and
continue to hold steady in 2011 in spite of the
ongoing global financial slump. In fact, a
significant jump in the third quarter of 2011
resulted in total inflows already well in excess of
any previous year on record. This increase
stemmed from both the reinvested earnings
and other capital sub-categories. The increase
under other capital reflects funds borrowed
by Namibian subsidiaries from their parent
companies, especially for capital expenditure.
Outflows in portfolio investment continued to
outpace inflows, howev
Foreign direct investment

statistics
The Bank of Namibia (BoN) maintains statistics

on foreign direct investment in Namibia which it
shares with the United Nations Conference on
Trade and Development (UNCTAD). UNCTAD
estimates that in 2010, FDI stocks were
equivalent to 45 percent of GDP, and FDI
inflows represented 34 percent of gross fixed
capital formation.
Value of FDI Inflows:
Composition of Direct investment in Namibia (In N$ Millions):

2006
2007
2008
2009
2010 (P)*
2011
Q1-Q3 (P)*
Total
2618
5164
5951
4376
5865
7031
Equity capital
2948
3952
2622
275
66
145
Reinvested earnings
1019
1318
1115
1327
3555
3237
Other capital
-1349
-106
2213
2774
2244
3649
244
-468
2218
2723
2012
2541
-1594
362
-5
52
232
21
Liabilities to direct investors

Claims on direct investors
*P - Provisional
24
Beverage giant SABMiller is planning to build a

US$40m brewery in Okahandja as part of its
African expansion. The company has been
importing beer into Namibia over the past two
decades and is estimated to have a 22% market
share in the industry. Minister of Trade and
Industry Calle Schlettwein said in a recent
statement that Namibia is looking to attract FDI
focussed on value addition to the countrys
natural resources. This would support higher
export receipts and employment creation.
(President Hifikepunye Pohamba echoed this
sentiment in an address to the National
Assembly.) Foreign investment stock in the
mining and agricultural sectors stood at nearly
$2bn during 2011, while that of the secondary
(manufacturing and industrials) sector equalled
only $370m, according to Investment Map,
highlighting the skewed nature of FDI away
6.26
from value addition. As indicated previously, the

government expects a significant part of FDI
over the next five years to still be channelled
towards the mining sector. This is not surprising
considering that the Fraser Institutes Survey of
Mining Companies for 2012/13 ranked the
country 30th out of 96 territories, with its
mineral potential given current regulations
ranked 35th. Further to his comments on
welcoming FDI, Mr Schlettwein indicated that
Namibia will welcome foreign investment that
does not crowd out domestic investment and
does not bring unfair competition to local
companies. There is an argument amongst
some Namibians that FDI has not resulted in the
right kinds of investment with the booming of
South African and Chinese retail operations used
as an example. These are indeed crowding out
Namibian
companies.
Setting up a company
The table below represents the steps required to open a business in Namibia. It also indicated the
time involved as well as the associated costs.
No
Procedure
Time to complete
Associated costs
1.
Obtain the approval for a company name from the

Registrar of Companies
18 days
Included in cost of
registration
2.
Pay the registration fees and buy revenue stamps at

the Receiver of Revenue
1 day
NAD 270
3.
Hire an attorney to register the company with the

Registrar of Companies; obtain the certificate to
commence business
14 days
About NAD 5,750+ NAD

556 notary fees
4.
Deposit the initial capital in a bank account
1 day
No charge
5.
Apply for a town planning certificate
1 day
No charge
6.
Apply for a trading license from the local municipality
1 day
NAD 47.00 to NAD 350

depending on the type of
business
7.
Register for VAT with the Receiver of Revenue at the 9 days

Ministry of Finance
8.
Register for PAYE with the Receiver of Revenue
9.
Register workers with the Social Security Commission 21 days
NAD 10 per employee
10.
Register workers with the Workmens Compensation 20 days

Commission
(simultaneous with
previous procedure)
No charge
No charge
4 days (simultaneous No charge

with previous
procedure)
25
Country Risk
levels are adequate, liquidity is high and the

incidence of non-performing loans is low,
although a renewed global economic downturn
would weigh on the sector's prospects.
EcoBanking
nomic
Sovereign Currency sector
Political structure Country
risk
risk
risk
risk
risk
risk
Aug
2013 BBB
BBB
BBB
BBB
BBB
BBB
Ratings
(AAA=least risky, D=most risky)
7.1
Sovereign risk
Stable. Namibia's BBB rating will be supported

by its low level of external debt, good payment
record and the tightening of fiscal policy in 201213.
7.2
Currency risk
Stable: Fairly robust investment inflows will

support the value of the South African rand, to
which the Namibia dollar is pegged, although it
will remain vulnerable to shifts in global
sentiment and local policy developments.
7.3
7.4
Political risk
The political environment is stable but

dominated by a single party, the South West
Africa People's Organisation (SWAPO); divisions
within SWAPO and ideological bias undermine
effective policymaking.
7.5
Economic structure risk
The economy's dependence on mining which

accounts for more than 10% of GDP and 50%
of exports but employs just 3% of the
workforce needs to be reduced to redress the
grossly uneven distribution of income. Progress
will be slow, partly as the inadequate education
system makes skilled labour scarce.
Banking sector risk
The rating has been upgraded to BBB from BB

over the last quarter, largely reflecting an
improvement in banks' foreign assets position.
The banking sector is well-regulated, capital
26
8.1
Country
Outlook for
20122016
Political stability
The South West Africa People's Organisation

(SWAPO), which has governed Namibia since
the country achieved independence in 1990, will
continue to dominate the political scene. Hage
Geingob, who was re-elected as SWAPO's vicepresident at the party's elective congress in late
2012, will automatically, be its candidate at the
November 2014 presidential election, as
Hifikepunye Pohamba will stand down when his
second and constitutionally stipulated final term
as president ends. This has in effect ensured
that Mr Geingob will be Namibia's next
president, given SWAPO's political dominance.
The former trade and industry minister's bid for
the vice-presidency was closely contested by
Jerry Ekandjo, the then regional and local
government minister, whose candidacy was
supported by the radically inclined SWAPO
Youth League (SYL). Mr Geingob's victory has
demonstrated that there is only limited appetite
among SWAPO delegates for the SYL's radical
policies. A subsequent cabinet reshuffle--in
which Mr Geingob was elevated to the post of
prime minister, while other members of his
camp were also promoted--has further
strengthened the position of SWAPO's
moderate faction.
8.2
Election watch
SWAPO retained control of most authorities in

the regional and local elections in November
2010, although voter turnout was only 38% - the
lowest ever in a nationwide poll. The party is
almost certain to keep hold of the presidency
(Mr. Pohamba won 75% of the vote at the last
election) and its current parliamentary majority
at the next elections, due in November 2014.
Even if the main opposition parties manage to
form an electoral pact before then of which
there is currently little sign this would do little
to weaken SWAPO's hegemony at the national
level; under the party-list system used in
national elections, each party is allocated seats
in proportion to its share of the national vote, so
an opposition alliance would be unlikely to have
much success unless it were able to cut into

SWAPO's vote in its northern, Oshivambospeaking heartland and in major towns.
However, it could have some impact at the
regional/local level.
8.3
International relations
Namibia is not expected to face any external

threats over the forecast period. The expansion
of economic ties with other countries in the
region--notably Angola, Zambia and South Africa-will remain a priority. Relations with Western
trading partners are expected to remain
amicable. An economic partnership agreement
(EPA) with the EU is likely to be signed over the
next two years, without which Namibia would
risk losing duty-free access to the main market
for its substantial beef and fish exports. In July
the EU trade commissioner, Karel De Gucht,
indicated that the EU might be willing to adjust
its stance on a number of the issues that have
so far dissuaded Namibia from signing the EPA,
including help for infant industries. Political and
economic links with Brazil, Russia, India and
China will expand further; all four are keen to
gain access to Namibia's natural resources.
Namibia opposed the UN Security Councilapproved NATO intervention in Libya and, for
historical reasons, will continue to align itself
with China and Russia in international disputes.
8.4
Policy trends
Mr Geingob's victory in the ruling party's

leadership race has cemented The Economist
Intelligence
Unit's
forecast
that
the
government's broadly pro-business policy
stance will be sustained in 2013-17. The policy
agenda will be guided by the fourth national
development plan (NDP4; 2012/13-2016/17),
which prioritises measures to reduce poverty
and income inequality. NDP4 also incorporates
the provisions of a new industrialisation policy
that focuses on agro-processing, mineral
beneficiation and import-substituting industries.
The plan is more focused than its predecessors;
it sets specific targets for four priority sectors:
manufacturing, logistics/transport, tourism and
agriculture. The government envisages that the
investment target of N$187bn (US$21.3bn)
under NDP4 will be largely secured through
public-private partnerships. The launch of NDP4
has also marked a shift in the government's
efforts to tackle unemployment, which stood at
27.4% in 2012. These have been reoriented to
focus on creating long-term jobs in the private
sector--partly by improving the business
27
environment and addressing shortages of skilled

labour--rather than short-term jobs in the public
sector. However, the N$15.2bn three-year
public job creation scheme, launched in
2011/12, will run its course, despite the fact that
its results so far have been very disappointing.
8.5
Economic growth
Both diamond and uranium output, two key

drivers of GDP growth in Namibia, expanded
briskly, in the first six months of this year,
suggesting that GDP growth in 2013 as a whole
could come in closer to last year's officially
reported growth rate of 5% than previously
forecast. However, with exports of goods and
services accounting for over 40% of nominal
GDP, much will depend upon global economic
developments in the second half of this year.
A recent upward revision of the 2011 GDP
growth rate to 5.7% (from 4.9%) by the Namibia
Statistics Agency (NSA) indicates that the
country's underlying economic performance has
been stronger than previously thought. Owing
mainly to a higher estimate for agricultural
production, the NSA has revised up primarysector output growth in 2011 to 1.9%, from
0.1%. Secondary-sector output growth is now
reported at 4.7% (originally 3.3%), with the
previous 0.6% contraction in manufacturing
output revised to a gain of 1.2%. The NSA has
also raised its estimate for tertiary-sector growth
in 2011, to 4.9% (3.6% previously), reflecting
higher financial intermediation, real estate and
business services activity. Although the NSA left
the overall 2012 growth rate unchanged, we
expect an upward revision by the end of 2013.
In the meantime, sectoral revisions to the
underlying 2012 figures included higher mining
sector growth of 12% (11.2% previously),
almost doubling primary sector growth to 12.8%
(from 6.5%). This was offset by weaker growth
in other sectors, notably a decrease in
manufacturing output, from 4.3% to 1.2%.
Mining and construction in the vanguard
Recent data releases also point to strengthening
economic conditions in the first half of 2013.
Diamond output grew by just under 10% year
on year to 852,000 carats in the first half of this
year, reflecting higher marine recoveries and
increased onshore output, mainly from the
recommissioned Elizabeth Bay mine. Marine
recoveries will continue to expand strongly as in
April the sea mining unit of Namdeb (the
Namibian diamond corporation) commissioned a

sixth mining vessel, with a 350,000 carat/year
production capacity. Global demand for the highquality gem stones that Namdeb mainly
produces has strengthened. This was reflected
in De Beers' decision to raise rough diamond
prices by 6% in the first half of 2013, having
lowered them by 12% in the second half of
2012. We expect annual output of 1.8m-1.9m
carats, a 6-12% increase over 2012.
Uranium production rose by 5% year on year in
January-June 2013 to 2,468 tonnes, mainly
reflecting the higher output generated by the
stage-three expansion of the Langer Heinrich
mine in central Namibia. For 2013 as a whole,
the increase in uranium production is likely to be
of a similar magnitude to that recorded in the
first half of the year, which means that annual
output will amount to around 5,300 tonnes. As
the bulk of production is sold under long-term
contracts, activity in the near term will be
relatively unaffected by the current weakness in
uranium spot prices (which have fallen to a fiveyear low of US$35 per pound).
Copper-concentrate output fell by 5% year on
year in the first half of 2013, mainly owing to
subsidence forcing the abandonment of an ore
compartment at the larger of the two mines
operated by Weatherly International of the UK.
However, the company has said that it expects
a revised mining plan and access to a new ore
compartment to lead to a recovery in production
in the second half of 2013. Treatment of
imported copper concentrate at the Tsumeb
smelter, which is owned by Dundee Precious
Metals of Canada, grew by 19% year on year, to
89,000 tonnes, in the first six months of this
year. An expansion of the smelter plant is
currently under way, aimed at boosting its
capacity
from
some
170,000-200,000
tonnes/year of concentrate feed to 240,000
tonnes by 2014.
The construction sector recorded its fourth
consecutive month of above-average activity in
June, underpinned by buoyant conditions in both
the commercial and residential building
subsectors. Construction activity will also be
spurred this year by ongoing projects in the
mining sector, including the US$2.1bn
development of the Husab uranium mine along
with the smaller Oshikoto gold mine. After a
moderation last yearto a still robust 12.5%
rate of expansion, from 19% in 2011we
28
expect construction to expand by around 20% in

2013.
Private-sector credit growth remains strong
Meanwhile, a number of other recent data
releases lend support to the view that economic
growth could perhaps surprise on the upside
this year. Private-sector credit extension (PSCE)
has remained high, indicating an upward trend in
companies' ability to borrow money for
investment purposes. PSCE expanded by an
overall 14.9% year on year in May, up from
14.1% in April. Total credit outstanding reached
a record N$54.3bn (US$5.4bn) at the end of
May, up N$7.1bn (15%) from a year earlier.
Lending growth to businesses stayed stronger
than credit extended to individuals (86% of
which comprises mortgage loans), at 16.3%
year on yearcompared to 14% for personal
borrowers. Nevertheless, individuals continued
to account for a much larger proportion of the
outstanding stock of debt (N$33.3bn, compared
with N$20.7bn for businesses).
Another positive indicator was the local IJG
Business Climate Index, which gained 5.8 points
to 134.0 in Juneits highest level so far this
year. The increase came on the back of strong
investment growth for the second consecutive
month; indeed the investment sub-index rose by
13.4 points from the previous month, reflecting
both the continuing favourable low interest rate
environment and a 27% rise in the Namibia
Stock Exchange (NSX) overall index during the
12 months to end-June.
A game of two halves
Current official forecasts for 2013 still point to a
lower growth outcome than last year, with real
GDP projected to expand by between 4.4% and
4.6%. The Economist Intelligence Unit forecast
is slightly lower, at 4.2%. The recent flurry of
upbeat data releases suggests that there could
be an upside risks to these forecasts.
Nevertheless, we believe there are grounds for
caution, not least because of an uncertain global
economic environment. The strengthening of
US output growth and some tentative signs of
recovery in the euro zone are both positive
developments for Namibian exporters; but
similarly, the evidence of a continuing slowdown
in China's economy and sluggish growth in
South Africa are both a cause for concern.
8.6
Inflation
The bulk of Namibia's imports--including most

food products--will continue to be sourced from
South Africa. As a result, domestic inflation will
remain heavily influenced by inflationary trends
in South Africa. At the same time, inflation in
Namibia will remain particularly vulnerable to any
shocks to global food prices, owing to the higher
weighting of food in its consumption basket.
Inflation in South Africa will accelerate slightly in
2013, to an average of 5.8%, partly reflecting
the recent weakness in the rand. It will ease to
an average of 4.7% a year in 2014-15, helped by
stable commodity prices, a slower pace of rand
depreciation, stricter competition policy and
efficiency gains arising from infrastructure
investment. Owing to wage rises and higher
energy prices, inflation will then rise to an
average of 5.4% in 2016-17. Roughly in line with
this, we expect inflation in Namibia to moderate
from 6.5% in 2012 to 5.5% in 2013 and 4.5% in
2014, before edging up to an average of 5.3% in
2015-17.
8.7
Exchange rates
The Namibia dollar will remain pegged at parity

to the South African rand in 2013-17. The rand
slid to R10.03: US$1 in June, its weakest level
since March 2009 (and 19.5% weaker year on
year), because of concerns about sluggish
growth, a higher trade deficit, weaker
commodity prices, strikes and global monetary
uncertainty. Although we expect the rand to
stage a modest recovery in the second half of
2013, we have revised down our forecast for
the whole of this year, to an average of R9.28:
US$1 (compared with R8.20: US$1 in 2012). The
volatile nature of foreign portfolio investment--a
vital component in financing South Africa's
current-account deficit--will continue to pose a
significant threat to currency stability. We
expect the rand to continue to drift lower, to an
average of R10.20: US$1 in 2017. However,
exogenous shocks or unwelcome policy shifts
could lead to a faster pace of decline.
8.8
External sector
After rising to an estimated 12.2% of GDP last

year, further substantial trade deficits are
forecast in 2013-14 as investment in new mines
and in the development of the Kudu offshore
gasfield boosts imports of capital goods. In 2015
the deficit is expected to fall because of faster
export growth as uranium production begins at
the Husab desposit and--possibly--the Etango
29
mine, and as import growth slows following the

completion of major mining projects. The
surplus on the services account is forecast to
decline as growth in tourist arrivals is offset by
increased freight costs. The income deficit is
expected to widen because of higher profit
remittances, mostly by mining companies (apart
from in 2013 and 2014, when increased
development costs will lead to a smaller share

of mining profits being repatriated). The current
transfers balance is expected to remain in
surplus, driven by trends in SACU receipts.
30
Appendix 1
Sources of information
Economist Intelligence Unit

CIA World Factbook
Bloomberg
World Bank
Wikipedia
Doingbusiness.org
US Department of State
31
Contact us
Robert Grant
Tel +264 61 387 500
Email robertgrant@kpmg.com
www.kpmg.com
2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP
and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative, a Swiss entity. All rights reserved.
The information contained herein is of a general nature and is not intended to address the
circumstances of any particular individual or entity. Although we endeavour to provide
accurate and timely information, there can be no guarantee that such information is
accurate as of the date it is received or that it will continue to be accurate in the future. No
one should act on such information without appropriate professional advice after a thorough
examination of the particular situation.
The KPMG name, logo and cutting through complexity are registered trademarks or
trademarks of KPMG International Cooperative (KPMG International).

Namibia Country Profile - 2012-2013 PDF

Diunggah oleh

Informasi Dokumen

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Namibia Country Profile - 2012-2013 PDF

Diunggah oleh

Hak Cipta:

Format Tersedia

Namibia

Document review and approval

This document has been reviewed by

This document has been approved by

Population growth rate

Age structures (2013 estimates)

Gender ratios (2013 estimates)

Life expectancy (2013 estimates)

6.11 Black economic empowerment and

6.18 Competition from state-owned

6.19 Corporate social responsibility

6.20 Political violence

6.22 Bilateral investment agreements

Latest Economic indicators

Five-year forecast summary

6.24 Foreign trade zones/free ports

6.25 Foreign direct investment statistics

Government and Politics

6.26 Setting up a company

Country Risk Ratings

Transport and Communica-tions

Banking sector risk

Economic structure risk

Country Outlook for 20122016

Openness to, and restrictions upon

Foreign ownership restrictions

Independent ratings on Namibias

Foreign investment in the Namibian stock

Infant industry protection

Conversion and transfer policies

Expropriation and compensation

6.10 Performance requirements/incentives

colonial occupation by the Germans and the

Namibia, officially the Republic of Namibia, is a

In 1966, uprisings and demands by African

Namibia has a population of 2,182,852 (July

Population growth rate

0.75% (2013 est.)

Source: CIA World Factbook.

1.02 male / female

1.03 male / female

1.02 male / female

1.02 male / female

1.07 male / female

0.83 male / female

65 years and over

0.78 male / female

The majority of the Namibian population is black

Source: CIA World Factbook.

Most Namibian whites and nearly all those of

The Christian community makes up more than

Source: CIA World Factbook.

Missionary work during the 1800s drew many

The official language is English. Until 1990,

in primary school and 115,237 students in

The AIDS epidemic is a large problem in

Namibia has compulsory free education for ten

The economy is heavily dependent on the

The Namibian economy is closely linked to

Latest Economic indicators

Exchange rate N$:US$ (av)a

Exchange rate N$:US$ (end-period)a

Deposit rate (av; %)