‘Vague’ NEEEB fuelling uncertainty
The CIF says every effort should be made to focus on attracting investments – both domestic and foreign direct investment.
Staff reporter – Namibia’s proposed empowerment legislation in its latest format has not “allayed any fears and made people more appeased with government’s commitment that people’s ownership rights will not be affected, and that their livelihoods will not be threatened”, the Construction Industries Federation (CIF) says.
The industry and various public had called for more certainty, so that the public and stakeholders would be in the position to plan and act accordingly.
“That need for certainty was particularly linked to whether or not NEEEB would become enacted, and if indeed it would, what then the respective pillars and standards were. Certainty around that normally is crucial information for any current business person, and potential investors, be it a Namibian domestic investor or foreign direct investment,” the CIF says.
Bärbel Kirchner, consulting general manager of the CIF, elaborates: “NEEEB in its current format, due to its vagueness, does not provide the required certainty.
“There is no clarity what the standard would be relating to each pillar and whether indeed compliance with a respective pillar would be compulsory or voluntarily. The assigned minister in this role would then have an unrealistically high authority to determine the standards and the legislation’s applicability.”
No clarity
At the same time, there is no clarity with regard to which business types might be affected, as according to NEEEB, it would relate to “any economic activity”, the CIF says. It is also unclear if measures to be taken as a result of NEEEB would ever come to an end, as the bill currently does not include a sunset clause, the federation states.
Related administrative processes appear to be extensive, which would increase bureaucracy and an overall burden to business.
“There is already uncertainty as to how it might affect public procurement. It appeared that under the current Procurement Act (2015), joint ventures with foreign companies were already favoured,” the CIF says.
A major concern of the CIF is the timing of possible implementation of the NEEEB.
Investment crucial
By considering the current economic environment - affected by past four years’ recession and the further impact of Covid-19 – and its impact on the Namibian economy, CIF is of the opinion that every effort should be made to focus on attracting investments – both domestic and foreign direct investment, the federation says.
“In order for Namibia to experience growth and the upliftment of its people, it is necessary that any policy or legislation enacted by parliament, will indeed attract investment. In this way, Namibia can focus on creating additional new wealth, instead of distributing existing wealth,” the CIF says.
Kirchner emphasises: “Attracting investors would be the most realistic way that Namibia can move forward and out of the current economic and financial crisis and can ensure growth, and therefore increase the capacity to produce goods and services. A Namibian economy on a steady and consistent growth trajectory would be better positioned to address poverty and secure the upliftment of its people.”
‘Trust’
She continues: “If one were to consider the advice of key economists, with the currently compromised public revenue collection, and limited public, private sector and household spending, and a hugely import dependent economy, it is absolutely critical that Namibia creates an environment that appeals to investors.”
Kirchner says attracting investment requires an optimal policy and legislative environment, which allows the development of trust based on the guarantee and certainty of ownership and an ease to do business, as well as good and accountable governance.
“The timing of tabling and enacting NEEEB as economic empowerment legislation in its current format, will be very detrimental for the small Namibian economy, as when investment is most needed, investors will turn away, and look at alternative, more secure propositions elsewhere,” the CIF concludes.
The industry and various public had called for more certainty, so that the public and stakeholders would be in the position to plan and act accordingly.
“That need for certainty was particularly linked to whether or not NEEEB would become enacted, and if indeed it would, what then the respective pillars and standards were. Certainty around that normally is crucial information for any current business person, and potential investors, be it a Namibian domestic investor or foreign direct investment,” the CIF says.
Bärbel Kirchner, consulting general manager of the CIF, elaborates: “NEEEB in its current format, due to its vagueness, does not provide the required certainty.
“There is no clarity what the standard would be relating to each pillar and whether indeed compliance with a respective pillar would be compulsory or voluntarily. The assigned minister in this role would then have an unrealistically high authority to determine the standards and the legislation’s applicability.”
No clarity
At the same time, there is no clarity with regard to which business types might be affected, as according to NEEEB, it would relate to “any economic activity”, the CIF says. It is also unclear if measures to be taken as a result of NEEEB would ever come to an end, as the bill currently does not include a sunset clause, the federation states.
Related administrative processes appear to be extensive, which would increase bureaucracy and an overall burden to business.
“There is already uncertainty as to how it might affect public procurement. It appeared that under the current Procurement Act (2015), joint ventures with foreign companies were already favoured,” the CIF says.
A major concern of the CIF is the timing of possible implementation of the NEEEB.
Investment crucial
By considering the current economic environment - affected by past four years’ recession and the further impact of Covid-19 – and its impact on the Namibian economy, CIF is of the opinion that every effort should be made to focus on attracting investments – both domestic and foreign direct investment, the federation says.
“In order for Namibia to experience growth and the upliftment of its people, it is necessary that any policy or legislation enacted by parliament, will indeed attract investment. In this way, Namibia can focus on creating additional new wealth, instead of distributing existing wealth,” the CIF says.
Kirchner emphasises: “Attracting investors would be the most realistic way that Namibia can move forward and out of the current economic and financial crisis and can ensure growth, and therefore increase the capacity to produce goods and services. A Namibian economy on a steady and consistent growth trajectory would be better positioned to address poverty and secure the upliftment of its people.”
‘Trust’
She continues: “If one were to consider the advice of key economists, with the currently compromised public revenue collection, and limited public, private sector and household spending, and a hugely import dependent economy, it is absolutely critical that Namibia creates an environment that appeals to investors.”
Kirchner says attracting investment requires an optimal policy and legislative environment, which allows the development of trust based on the guarantee and certainty of ownership and an ease to do business, as well as good and accountable governance.
“The timing of tabling and enacting NEEEB as economic empowerment legislation in its current format, will be very detrimental for the small Namibian economy, as when investment is most needed, investors will turn away, and look at alternative, more secure propositions elsewhere,” the CIF concludes.
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