NAMIBIA’S slide down to 107th on the World Bank’s Ease of Doing Business index and Global Competitiveness ranking may be an issue of the past as government has finally tackled stifling concerns from the private sector, which hampers economic growth and inflow of investments.
Namibia has for the past five years declined quickly on several of the World Bank’s specific rankings for the ease of doing business including the time it takes in dealing with construction permits, resolving insolvency and starting a business.
With policy recommendations made by the High Level Panel on the Economy, chaired by Johannes! Gawaxab, the government spoke on some of the reforms it will make.
Secretary to the Namibian Cabinet, George Simataa informed the summit that Cabinet agreed to expedite the finalization of NEEEB, acknowledging that certain provisions therein, as well as prolonged consultations on the Bill has created uncertainty for the private sector and prospective investors into the Namibian economy.
He stated that the finalization of NEEEB is a key priorities and the Bill will be tabled in Parliament within six months.
The compulsory 25% equity clause has been removed. However, all Pillars will remain and be taken into account for enterprises doing business with Government and applying for natural resources licensing.
He further clarified that an enterprise wanting to do business with Government will be expected to comply with all the Empowerment Pillars espoused in the NEEEB bill.
Simataa stated that NEEEB will refer to the need for Sector Charters. The equity threshold will be determined in the Sector Charters not an enterprise complies, will be guided by a weighted scorecard.
He further detailed that the definition of the term ‘Previously Disadvantage Persons’ for the NEEEB refers to the Namibian citizens that were racially disadvantaged by colonial and Apartheid Laws and practices before 21 March 1990.
Furthermore, Simataa said that the government will table the Investment Promotion Act before Parliament during 2019 and will tackle multiple concerns raised by the private sector.
With regard to the Public Procurement Act, 2015, Simataa stated that there is a need to split the roles between the Accounting Officer’s function and that of the Chairperson, to safeguard against conflict of interest and ensure adherence to corporate governance principles
Other reforms include simplifying bidding documents to prevent lengthy procurement process and enabling local businesses participation.
Simataa said that the state will implement Section 69 of the Act: which directs that the Minister may grant preferential treatment in procurement in pursuance of the developmental and empowerment policies of the government. The reforms will be undertaken during this current financial year.
With regard to the construction sector Simataa stated that domestic construction companies face substantial challenges when competing with foreign companies due to an uneven playing field.
“This is due to requirements in relation to performance guarantees and collateral. The other problem relates to the lack of an institution that regulates the construction sector. Cabinet directed the Ministry of Works and Transport to introduce the National Construction Council and ensure that any additional regulations should not hinder the participation of SMEs in the building and construction sector.” he explained.
Furthermore, for the Namibian economy to grow, Simataa stated that domestic savings should effectively be intermediated into investment that are growth enhancing.
Cabinet agreed that Close Corporations should be allowed to participate in unlisted Investment, on condition that effective control measures such as provision of Audited Financial Statement is instituted.
He added that government owns wide range of immovable assets that are often not optimally utilised.
These include land, building and infrastructure as well as natural resources such as mining, fish wildlife, public enterprises and social infrastructure. HLPNE recommends leveraging initiatives for Government assets to raise capital to fund its social agenda and support productive activities.
Touching on Public Private Partnerships, (PPPs), Simataa said, “Due to limited financial resources, Public Capital Projects have experienced delays and cost over runs. PPP could mitigate some of these shortcomings, accelerate project implementation and inject additional funds into the economy.”.
He detailed that government should enlist PPPs in the procurement of complex large projects such as those of more than N$ 250 million and with a lifespan of more than ten (10) year to leverage state assets to unlock liquidity.
Cabinet agreed on PPP, however, such partnerships should be referred to general principles of PPP rather than to specific projects.