Identifier
Created
Classification
Origin
09WINDHOEK20
2009-01-22 15:01:00
UNCLASSIFIED
Embassy Windhoek
Cable title:  

NAMIBIA: 2009 INVESTMENT CLIMATE STATEMENT

Tags:  ECON EFIN EINV ETRD ELAB PGOV OPIC KTDB USTR WA 
pdf how-to read a cable
P 221501Z JAN 09
FM AMEMBASSY WINDHOEK
TO SECSTATE WASHDC PRIORITY 0299
INFO SOUTHERN AFRICAN DEVELOPMENT COMMUNITY PRIORITY
USDOC WASHDC
UNCLAS WINDHOEK 000020 


STATE DEPT FOR AF/S/; AF/EPS; EB/IFD/OMA, EEB/CBA DENNIS WINSTEAD,
ADA ADLER
STATE PASS TO USTR FOR WILLIAM JACKSON

E.O. 12958: N/A
TAGS: ECON EFIN EINV ETRD ELAB PGOV OPIC KTDB USTR WA

SUBJECT: NAMIBIA: 2009 INVESTMENT CLIMATE STATEMENT

REF: 08 STATE 123907

UNCLAS WINDHOEK 000020


STATE DEPT FOR AF/S/; AF/EPS; EB/IFD/OMA, EEB/CBA DENNIS WINSTEAD,
ADA ADLER
STATE PASS TO USTR FOR WILLIAM JACKSON

E.O. 12958: N/A
TAGS: ECON EFIN EINV ETRD ELAB PGOV OPIC KTDB USTR WA

SUBJECT: NAMIBIA: 2009 INVESTMENT CLIMATE STATEMENT

REF: 08 STATE 123907


1. (U) Summary. Post is pleased to submit its 2009 Investment
Climate for Namibia. Per reftel paragraph 13, Post sent the ICS in
Microsoft Word format to J. Nathaniel Hatcher and his backup Gregory

N. Hicks on January 16. End Summary.

BEGIN TEXT

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Openness to Foreign Investment
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2. (U) 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 Investment is the governmental
authority which is primarily responsible for carrying out the
provisions of the Foreign Investment Act. Under the act the
Ministry established the Namibia Investment Center (NIC). The NIC
serves as Namibia's 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 minimize bureaucratic "red
tape" by coordinating work with government ministries as well as
regulatory bodies.


3. (U) The Foreign Investment Act states that "foreign nationals
shall be in no different position than any Namibian." The act
guarantees foreign investors' treatment equal to that given to
Namibian firms, fair compensation in the event of expropriation,
international arbitration of disputes between the 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.


4. (U) The Registrar of Companies in the Ministry of Trade and
Industry is responsible for managing, regulating, and facilitating
the formation of businesses. The Registrar's office encourages
investors to seek professional advice from legal practitioners,
auditors, accounting officers, or secretarial firms when registering
their businesses.


5. (U) 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 and
while recognizing the role of foreign investment and competition.
The act is intended to promote:

-- The efficiency, adaptability and development of the Namibian
economy;
-- Competitive prices and product choices for customers;
-- Employment and advance the social and economic welfare of
Namibians;
-- Expanded opportunities for Namibian participation in world
markets;
-- Participation of small enterprises in the economy by ensuring a
level playing field; and
-- Greater enterprise ownership particularly among the historically
disadvantaged.


6. (U) Other laws include the Companies Act and the Close
Corporation Act. These laws provide the legal framework for the
establishment of business entities.

Foreign Ownership Restrictions


7. (U) 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 may require local participation before issuing
licenses to exploit natural resources.

Black Economic Empowerment and Affirmative Action


8. (U) 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 Labor and Social Welfare's Equity Commission requires
all firms to develop an affirmative action plan for management
positions and to report annually on its implementation. Namibia's
Affirmative Action Act strives to create equal employment
opportunities, improve conditions for the historically
disadvantaged, and eliminate discrimination. The commission
facilitates training programs, provides technical and other
assistance, and offers expert advice, information, and guidance on
implementing affirmative action in the work place.


9. (U) In certain industries, such as the fishing sector, there has
been a concerted campaign to increase Namibian participation in
existing investments. In particular, some foreign companies with
fishing licenses have reported being required to form partnerships
with local individuals or firms chosen by the government in order to
renew their licenses.

Government Tenders


10. (U) Most government transactions, including the procurement of
goods and services, are coordinated through the Tender Board of
Namibia. The board comprises representatives from various
government ministries appointed by the Minister of Finance. The
Government is required by law to publicize 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 generally not restricted to the historically
disadvantaged or Namibian citizens but are reserved for individuals
and companies domiciled in Namibia.

Parastatals


11. (U) While Namibian companies are generally open to foreign
investment, government owned enterprises (parastatals) have to date
been closed to all investors (Namibian and foreign). Foreign
investors have participated in joint ventures with parastatals in
certain sectors (i.e., mobile telecommunications). 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. Parastatals provide most of the essential services such as
telecommunications, transport, water, and electricity. Although the
Government underscores its commitment to privatization, the process
remains slow and many parastatals remain in the hands of the
Government. That said, the Government sold a 34% share in 2006 in
its state-owned mobile phone company, MTC, to Portugal Telecom.
However, a U.S. business criticized the process for a lack of
transparency and unfair bidding practices designed to favor one
party. In 2007, a second cellular operator, Cell One, entered the
market.. Nampower is the national power utility parastatal of
Namibia. In January 2009, Orascom Telecom's subsidiary Telecel
Globe acquired 100% of Cell One. Nampower is the national power
utility parastatal.

Independent Ratings on Namibia's Investment Climate


12. (U) Independent ratings confirm that Namibia enjoys a positive
investment climate. The World Bank ranked Namibia 51 among 181
countries in its 2009 Doing Business report. Namibia received its
lowest rankings for registering property, trading across borders,
and starting a business. The World Bank reported that it requires
on average 10 procedures and 66 days to start a business.
Registering property takes on average 9 procedures and 23 days, and
the process costs nearly 10% of the property's value. It takes 11
documents and approximately 29 days to export a product and 24 days
to import an item (trade across borders),according to the World
Bank.

http://www.doingbusiness.org/ExploreEconomies /
Default.aspx?economyid=135

Foreign Investment in the Namibian Stock Exchange


13. (U) Foreigners must pay a 10% non-resident shareholders tax on
dividends; however there is no capital gains or marketable
securities tax. As a member of the Common Monetary Area the Namibia
Dollar (denoted as N$) is pegged one-to-one with the South African
Rand.

Work Permits


14. (U) The lengthy and administratively burdensome process of
obtaining work permits is among investors' greatest complaints in
Namibia. Although the government cites the 36 percent 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.

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Conversion and Transfer Policies
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15. (U) 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; and
-- payment of just compensation without undue delay and in freely
convertible currency in the event of expropriation.


16. (U) To obtain a CSI, an investor must apply to the Ministry of
Trade and Industry. The investor's application must demonstrate the
extent to which the proposed investment:

-- will contribute toward Namibia's development objectives;
-- will use Namibian labor and natural resources to contribute to
the economy;
-- will assist in the advancement of socially, economically or
educationally disadvantaged of Namibians;
-- will make provisions for equal opportunities for women; and,
-- will likely impact the environment, and the proposed measures to
mitigate adverse environmental consequences.


17. (U) 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. However, banking fees and charges are among
the highest in the world. Three of the four local commercial banks
are subsidiaries of South African banks. All local commercial banks
handle international transactions and trade financing.

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Expropriation and Compensation
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18. (U) Government expropriations are rare. According to the Foreign
Investment Act, foreign investors who have received a Certificate of
Status Investment (CSI) are entitled "just compensation . . without
undue delay and in freely convertible currency" if the government
expropriates the investor's property. Furthermore, the courts are
generally independent and uphold contracts.


19. (U) The primary mechanism for land reform that the government
continues to pursue is a "willing buyer-willing seller" program,
which is rooted in the Namibian Constitution. The Namibian
Constitution also provides for 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
Namibia's landless. Namibian stakeholders agreed that foreign-owned
and non-productive farmland should be primary targets for
expropriation. In 2005, the Government introduced a land tax to
raise money for land acquisition subjecting absentee landowners to
higher tax rates than resident farmers.


20. (U) Under its land reform program the government has carried out
the expropriation of "unproductive" agricultural land from both
domestic and overseas (primarily German) landowners. The High Court
of Namibia on March 6, 2008 made its first ruling on the legality of
expropriation under the land reform program. The Court ruled the
program was constitutional but found that the Ministry of Lands and
Resettlement's administration of the expropriation process had
violated Namibian law on several grounds.

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Dispute Settlement
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21. (U) 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 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.


22. (U) Namibia's legal system, based on the Roman Dutch Law, is
similar to South Africa's legal system. The system provides
effective means to enforce property and contractual rights. The
Company's 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.


23. (U) A new Insolvency Amendment Bill was passed in 2005 but has
not yet been signed into law.


24. (U) The Namibian court system is independent, and does not
suffer from government interference. Per the Criminal Procedure Act
of 2004, foreign court judgments may be accepted under an
extradition treaty.


25. (U) Namibia signed but has not ratified the Convention on the
Settlement of Investment Disputes Between States and Nationals of
Other States.

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Performance Requirements and Incentives
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26. (U) Namibia does not impose performance requirements on foreign
investors. For certain industries, however, there are local content
requirements to exempt final products from duties under the Southern
African Customs Union (SACU).

Incentives


27. (U) Incentives are mainly aimed at stimulating manufacturing in
Namibia and promoting exports. Incentives are designed to give
Namibia-based entrepreneurs investing in manufacturing and exporting
a competitive edge. These tax and non-tax incentives are accessible
to both existing and new manufacturers.

Import Permits


28. (U) 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 and meat, live animals, genetic materials, controlled
petroleum products, firearms and explosives, diamonds, gold, and
other minerals, and 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.


29. (U) 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 phytosanitary 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 country's 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.


30. (U) Namibia is a party to the WTO Agreement on Import Licensing.


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Right to Private Ownership and Establishment
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31. (U) 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 (see above) 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.

Real Estate


32. (U) Foreign investors can purchase and own land in Namibia.
There is an exception related to agricultural land. Due to
Namibia's ongoing land reform and resettlement process, legislation
restricts non-resident foreigners from purchasing agricultural
farmland. Existing agricultural land owned by non-resident
foreigners (so-called absentee owners) has been considered a primary
target for government expropriation under the land reform process.

Protection of Property Rights


33. (U) 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.


34. (U) 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.


35. (U) 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 January 2009 the Ministry of Trade
and Industry circulated a draft industrial property bill, which
proposes to establish an Industrial Property Office to handle
administration of patents, marks and designs. The law has not yet
been passed.


36. (U) The Ministry of Information and Communication Technology has
drafted amendments to the Copyright and Neighboring Rights
Protection Act of 1994 with the aim of bringing it in line with the
TRIPS Agreement and the WIPO treaties. However, the new law still
needs to be passed and enacted. It aims to improve standards of IPR
protection and include new aspects such as satellite, traditional
knowledge and folklore issues. Two copyright organizations, the
Namibian Society of Composers and Authors of Music (NASCAM) and the
newly established Namibian Reproduction Rights Organization (NAMRRO)
are the key driving forces behind the government's anti-piracy
campaigns. NASCAM administers intellectual property rights for
authors, composers and publishers of music while NAMRRO protects all
other intellectual property rights including literary, artistic,
broadcasting, satellite, traditional knowledge and folklore.

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Transparency of Regulatory System
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37. (U) Namibia has a bicameral legislature comprising the National
Assembly and National Council. Most power rests in the National
Assembly. While committees in both houses can consider and make
recommendations on legislative proposals, in practice, the National
Assembly standing committees make recommendations on proposed bills
to the National Assembly. The committees are required to solicit
citizen and civil society participation when reviewing bills and
government agency performance. Sector-based and non-government
organizations often work with the Ministry of Justice and other
government agencies to sponsor legislation or provide technical
expertise for draft legislation. Namibia also has a fledgling lobby
movement.


38. (U) In many sectors, a relatively effective and transparent
regulatory system exists. In 2000, the government established the
Electricity Control Board (ECB) www.ecb.org.na, which is responsible
for regulating the energy sector. The Namibian parastatal
responsible for providing electricity, NamPower, currently enjoys a
monopoly. However, the ECB's core function is to regulate
electricity generation, transmission, distribution, supply, import
and export within the country. The ECB's 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.

Click here for Fitch's credit rating for NamPower:

http://www.fitchratings.com/corporate/ratings /
issuer_content.cfm?issr_id=82576967


39. (U) The Namibian Communication Commission (NCC) www.ncc.org.na
has limited regulatory responsibilities, which include regulating
frequency allocation and establishing license fees. NCC does not
regulate the national fixed line operator, Telecom Namibia, and this
creates a de facto regulatory vacuum for the industry. Namibia has
a small degree of parastatal market liberalization. Internet and
mobile telephony services have been opened up to competition. This
move is intended to improve service and foster better communication
in rural and remote areas. Currently, there is a moratorium on the
issuing of all telecommunications licenses until the new
Telecommunications Bill is passed.


40. (U) The Namibia Financial Institutions Supervisory Authority
(NAMFISA) www.namfisa.com.na regulates non-banking financial
institutions. The authority aims to reduce financial crime through
developing and implementing effective regulatory systems.

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Efficient Capital Markets and Portfolio Investment
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41. (U) 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.


42. (U) Although the NSX is the second largest stock exchange in
Africa, this distinction is largely because many South African firms
listed on the Johannesburg exchange are also listed (dual listed) on
the NSX. For additional information on the Namibian Stock Exchange,
please visit: http://www.nsx.com.na/. The government has also
introduced investment incentives to attract mutual funds and foreign
portfolio investors that have energized emerging stock markets
elsewhere in the developing world. By law, Namibia's government
pension fund and other Namibian funds are required to allocate a
certain percentage of their holdings in Namibian investments.
Namibia has a world-class banking system that offers all the
services needed by a large company.


43. (U) 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.

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Political Violence
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44. (U) 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 between supporters of
the Rally for Democracy and Progress (RDP) and SWAPO party members.
Nevertheless, damage to commercial projects and/or installations as
a result of political violence is considered unlikely.

State Department's 2008 Human Rights Report for Namibia:
http://www.state.gov/g/drl/rls/hrrpt/2008

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Corruption
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45. (U) Transparency International ranked Namibia 61 out of 180
countries in its 2008 corruption perceptions index, which measures
the perceptions of businesses and country analysts about the degree
of corruption in a country. A score of 10 reflects a "highly clean"
and 0 reflects a "highly corrupt" nation. Namibia scored 4.5 just
behind Turkey, Lithuania, and Poland's score of 4.6. Only four
sub-Saharan African countries (Botswana, South Africa, Mauritius and
Seychelles) ranked higher.

See: http://www.transparency.org/policy_research/
surveys_indices/cpi/2008


46. (U) The Namibian Government has adopted a policy of "zero
tolerance" for corruption. The Namibian Government passed the
Anti-Corruption Act in May 2003, appointed the director and deputy
director of the resulting Anti-Corruption Commission in October
2005, and launched the opening of the office in 2006. The Commission
attempts to complement civil society's anti-corruption programs and
support existing institutions such as the Ombudsman's Office and
Attorney General. Anti-corruption legislation is in place to combat
public corruption. Critics of the anti-corruption campaign charge
that the ACC narrowly interprets its mandate and focuses on minor
cases, with few cases reaching prosecution.


47. (U) Namibia has signed and ratified the UN Convention Against
Corruption and the African Union's African Convention on Preventing
and Combating Corruption. Namibia signed the Southern African
Development Community's Protocol Against Corruption.

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Bilateral Investment Agreements
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48. (U) Namibia has ratified reciprocal investment promotion and
protection treaties with Switzerland, Malaysia, France, Germany, the
Netherlands, Cuba, Finland, Spain, Austria, Angola, Vietnam, Italy
and China. There is no bilateral investment agreement 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.


49. (U) As a member of the Southern African Customs Union, Namibia
will be a beneficiary of SACU's 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 the U.S. and 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.

For additional information, please contact:

Directorate of International Trade
Private Bag 13340
Windhoek, Namibia
Tel: +264-61-283-7331
Fax: +264-61-253865
E-mail: dit@mti.gov.na

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OPIC and Other Investment Insurance Programs
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50. (U) The Overseas Private Investment Corporation (OPIC) provides
political risk insurance to qualified U.S. investors in Namibia. In
June 2005, OPIC approved a $25.2 million credit facility to enhance
the operations of NamGem Diamond Manufacturing Company Ltd.
(NamGem). The U.S. sponsor of the project was Lazare Kaplan
International Inc. (LKI).Namibia is also a member of the World
Bank's Multilateral Investment Guarantee Agency (MIGA),which
performs a similar function. MIGA has so far not issued any
guarantees for investment, but Namibia has been an active
beneficiary of MIGA's technical assistance services.

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Labor
- - -


51. (U) The Namibian Constitution allows for the formation of
independent trade unions to protect workers' rights and to promote
sound labor relations and fair employment practices. Namibia has
ratified six of the International Labor Organization's fundamental
conventions. Businesses operating within the EPZ are required to
adhere to the Labor Act.


52. (U) While there is a pool of qualified workers in varying
professions in Namibia, there is a shortage of highly skilled labor.
Employers often cite labor productivity as their biggest challenge.
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.


53. (U) In 2007, Namibia passed a new Labor Act to replace
legislation dating back to 1992. The new law, which entered into
force in November 2008, is stricter with respect to discrimination
in the workplace and establishes new protections for pregnant
workers as well as employees infected with HIV/AIDS. The act
provides for arbitration and conciliation as a means to resolve
labor disputes more quickly. The act also prohibits the hiring of
temporary or contract workers. Employers have expressed concern
that banning such working arrangements would diminish the
flexibility to hire workers on short-term projects, potentially
exacerbating Namibia's already high (36%) unemployment rate. A
legal challenge to the constitutionality of the labor hire
prohibition failed in the High Court. The court ruled the
prohibition was constitutional, but the case is on appeal.

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Foreign-Trade Zones/Free Ports
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54. (U) 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 center at Walvis Bay.

Export processing Zones (EPZ)


55. (U) 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 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.


56. (U) The Offshore Development Company (ODC) administers the
country's Export Processing Zone (EPZ) regime. However, ODC has
been at the center of a corruption scandal involving the loss of 100
million Namibian dollars (approximately 10 million USD) in
investments. ODC maintains that it is financially stable and is
negotiating repayment.

Further information on EPZs is available at:
http://www.mti.gov.na/subpage.php?linkNo=16
http://www.embnamibia.at/NAMIBIA/tradeInvestm ent/
export_processing_zone_investorguide.pdf

For more information on investment incentives:
http://www.mti.gov.na/subpage.php?linkNo=22

For information on Namibia's Walvis Bay port EPZ managed by the
Walvis Bay EPZ Management Company, please click:
http://www.wbepzmc.iway.na

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Foreign Direct Investment Statistics
- - - - - - - - - - - - - - - - - - -


57. (U) The most recent foreign direct investment statistics are
available from the Bank of Namibia. However, the published
statistics do not reveal country specific figures.

http://www.bon.com.na/stats/bop.aspx?type=2

For country specific figures up to 2005, please see the United
Nations Conference On Trade And Development (UNCTAD) website:

http://www.unctad.org/sections/dite_fdistat/
docs/wid_cp_na_en.pdf

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Web Resources
- - - - - - -

Government of the Republic of Namibia: www.grnnet.gov.na

Namibian Parliament: www.parliament.gov.na

Ministry of Trade and Industry: www.mti.gov.na

Bank of Namibia: www.bon.com.na

Namibia Financial Institutions Supervisory Authority (Namfisa):
www.namfisa.com.na

Namibia Stock Exchange: www.nsx.com.na

Namibia Labor Resource and Research Institute (LARRI):
www.larri.com.na

Namibia Communication Commission (NCC): www.ncc.org.na

Fitch's Ratings: www.fitchratings.com

World Economic Forum: www.weforum.org


MATHIEU