EAN backs draft Investment Bill

The Economic Association of Namibia (EAN) has welcomed the draft Investment Promotion and Facilitation Bill, saying it has the potential to streamline investment policy while improving coordination across government institutions.

The comments follow the release of the draft bill for public consultation in November last year.

“The Bill represents an important step towards consolidating investment policy, improving coordination across institutions, and aligning investment decisions with Namibia’s long-term development objectives,” the EAN said.

According to the think tank, the inclusion of provisions on investor rights, dispute resolution, performance agreements and transparency reflects an intention to enhance predictability and accountability within Namibia’s investment regime.

Promote investment, limit regulation 

However, the EAN cautioned that the draft legislation places a stronger emphasis on approval and control mechanisms than on actively promoting investment.

“At the same time, the Bill would benefit from a stronger emphasis on investment attraction and facilitation, in line with its stated title and objectives. While regulation is an important part of any investment framework, the overall balance of the Bill currently leans more heavily towards approval, control and compliance mechanisms than towards actively encouraging investment,” the EAN said.

“This may create perceptions of complexity or uncertainty for prospective investors, particularly in a competitive global environment. Namibia is a member of several regional and continental integration initiatives, including the Southern African Customs Union, the Southern African Development Community and the African Continental Free Trade Area, all of which aim to promote cross-border trade, regional value chains and investment flows,” it added.

The EAN said it would be preferable for the Bill to draw on best practice from existing regional and continental investment frameworks.

“It is therefore important that the Bill is aligned with these broader commitments and supports Namibia’s ambition to position itself as an open, competitive and attractive investment destination within the region.”

Key considerations

Despite welcoming the Bill’s overall intent, the EAN identified several areas requiring refinement. It noted that Section 3 limits the application of the Act largely to investors seeking incentives or operating in designated sectors.

“This raises questions regarding the regulatory framework applicable to investments that fall outside these categories and may benefit from clarification,” the EAN said.

Concerns were also raised around the designation of economic sectors and business activities.

“The designation framework is an important policy tool. However, additional clarity on classification criteria, review periods and transition arrangements could help reduce uncertainty for existing and prospective investors, particularly in relation to long-term planning and reinvestment decisions,” the EAN said.

The think tank further questioned the treatment of expansions of existing investments, warning that classifying expansions as new investments could undermine reinvestment incentives.

“Consideration should be given to clearer safeguards to ensure that expansions that strengthen existing operations are not unduly constrained,” it said.

Ministerial powers in the spotlight 

The EAN also highlighted the level of discretion embedded in the investment approval process.

“The approval framework places significant discretion with the Minister or sectoral minister. Additional guidance on the weighting or prioritisation of the criteria listed in Section 35 could enhance transparency, predictability and consistency in decision-making, thus impacting micro, small and medium-sized enterprises,” the EAN said.

“Consideration should also be given to the practical impact of the proposed approval and assessment requirements on micro, small and medium-sized enterprises. While the intention to ensure investments deliver net benefits to Namibia is understandable, extensive information and approval requirements may disproportionately affect smaller investors, both domestic and foreign, who often lack the administrative capacity to navigate complex processes,” it added.

The draft Investment Promotion and Facilitation Bill is expected to be tabled in the National Assembly in March.