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RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHWD #0374/01 2871230
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R 141230Z OCT 09
FM AMEMBASSY WINDHOEK
TO RUEHC/SECSTATE WASHDC 0809
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 06 WINDHOEK 000374 
 
SIPDIS 
SENSITIVE 
 
STATE PLEASE PASS TO AF/S AND AF/EPS Gabrielle Mallory 
USTR FOR BILL JACKSON AND CONSTANCE HAMILTON 
DEPT OF COMMERCE FOR J.DIEMOND AND KEVIN BOYD 
DEPT OF TREASURY FOR ANTHONY IERONIMO 
 
E.O. 12958: N/A 
TAGS: EAGR EAID ECON ENRG ETRD PHUM WA
SUBJECT: NAMIBIA: 2009 AGOA ELIGIBILITY REVIEW SUBMISSION 
 
REF: A. STATE 97769 
 
¶1. (SBU) Summary:  This cable is the AGOA Eligibility Review 
submission for Namibia.  Responses are keyed to paragraph 3 of 
reftel.  End Summary. 
 
Country: NAMIBIA 
Current AGOA Status: Eligible 
 
¶3. (SBU) Country Background Summary: 
 
Namibia has a population of approximately 2.1 million (projected). 
GNI in 2008 was $8.88 billion; 2008 GNI per capita was $4,200. 
Namibia's formal economy produces most of its wealth, although 
traditional subsistence agriculture (mainly in the north) supports 
most of its labor force.  Independent since 1990, Namibia maintains 
a functioning democracy based on a modern, liberal constitution.  In 
November 2004, the nation elected then Minister of Lands, 
Resettlement and Rehabilitation Hifikepunye Pohamba as the new 
President, succeeding the country's founding father and first 
democratically elected President, Sam Nujoma.  This year's 
Presidential and National Assembly elections are scheduled for 
November 28-29.  Namibia's greatest challenges are to bring the 
majority of Namibians disadvantaged by apartheid into the economic 
mainstream while addressing the challenge of HIV/AIDS.  In July 
2008, the Namibian government and Millennium Challenge Corporation 
(MCC) signed a $ 304 million grant agreement. The National Assembly 
ratified the compact in November 2008, and it entered into force in 
September 2009.  The five-year compact will help strengthen access 
to and quality of Namibia's education and training sector, increase 
productivity of farm enterprises in communal rural areas and promote 
growth in Namibia's tourism industry. Namibia has a developed 
infrastructure.  Over half of the country's export earnings come 
from diamonds and other mineral products including copper, zinc, and 
uranium.  Namibia is also a significant exporter of fish and fish 
products.  Namibia's excellent conservation policies ensure the 
protection of its fragile ecosystem and abundant wildlife. 
 
¶4. (SBU) Section I. Market Based Economy/ Elimination of Trade 
Barriers 
 
¶A. Major Strengths Identified 
 
- The economy is modern and market-based, incorporating a 
rules-based trading system. 
 
- The Foreign Investment Act guarantees foreign investors national 
treatment, 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. 
 
- The legal system protects and facilitates acquisition and 
disposition of property rights. 
 
- Registration of patents, trademarks and designs is administered by 
the Registrar of Companies, Patents and Trademarks. 
 
- The Namibian Society for Composers and Authors of Music (NASCAM) 
established in 1994 in terms of the Copyright and Neighboring Rights 
Protection Act administers and protects musical works. 
 
- A second copyright organization, known as the Namibian 
Reproduction Rights Organization (NAMRRO) was launched on 27 March 
¶2008. NAMRRO represents the rights of authors and publishers of 
literary, artistic and dramatic works. 
 
- The transportation infrastructure is well developed and there is a 
favorable business climate. 
 
- Namibia was ranked 66 out of 183 countries in the 2010 World Bank 
Group's Doing Business Report. Namibia ranked fourth amongst 
Sub-Saharan African countries. 
 
- Namibia has responsible economic policies, institutional capacity, 
and sound banking and financial management practices. 
 
- As a member of the Southern African Customs Union (SACU) and host 
of the SACU Secretariat, Namibia is an enthusiastic participant in 
the implementation of the U.S.-SACU Trade, Investment and 
Development Cooperation Agreement (TIDCA) which was signed in July 
¶2008. 
 
- The government is working to improve service delivery and 
efficiency through decentralizing sector management. 
 
 
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- The Government has initiated projects to increase the supply of 
electricity in response to increased demand in Namibia and the 
sub-region. 
 
¶B. Major Issues/Problems Identified 
 
- Income distribution inequalities in Namibia, as measured by the 
Gini Coefficient, are among the worst in the world. Namibia's Gini 
Coefficient is 0.6.  Aggregated macroeconomic statistics mask huge 
disparities in wealth and income between different populations. 
 
- Although the government has studied various options for 
privatization of parastatals and has frequently stated its 
commitment to instituting provisions for private investment in these 
organizations, privatization remains slow with almost no active 
progress. 
 
- The government retains ownership of various assets, including 
power, telecommunications, transport, and water utilities.  Many 
operate as commercialized entities, operating as businesses 
independently of subsidies from the national budget.  Power and 
telecommunications parastatals are among Namibia's most profitable 
companies and pay dividends to the government.  There are some 
parastatals, however, that are draining subsidies from the national 
budget, such as Air Namibia. Only a limited number of the 41 
recognized parastatals produce annual reports on a regular basis. 
 
- Persistent levels of poverty, unemployment, and HIV/AIDS remain 
the most challenging issues for Namibia.  Namibia's adult HIV 
prevalence rate is approximately 15 percent, according to UNAIDS. 
 
- There is a serious shortage of skilled and specialized workers, 
especially in the science, engineering and health sectors. 
 
- While Namibia still ranks high amongst Sub-Saharan African 
countries in the World Bank Group's Doing Business Report, it 
slipped on 9 of 10 sub-indicators in the report and dropped 12 
places overall from 54 to 66 out of 183. According to the report, 
Namibia ranks 151 out of 183 countries for Trading Across Borders. 
Import/Export documentation requirements are a leading factor in why 
Namibia lags behind even its regional peers. 
 
- There are often long delays in the processing of work permit 
applications. 
 
- Increases in demand for electricity and water that may outstrip 
supply in the short-term which could jeopardize development 
projects. 
 
- While inflation still remains moderately high (above 7 percent), 
2009 saw a sharp decrease from 2008 levels which eclipsed 12 
percent.  This decrease was triggered mainly by the global economic 
slowdown and measures introduced by the central bank to control 
inflation (primarily the reduction of the REPO rate). 
 
- Approximately 40 percent of the Namibian government's revenues are 
derived from the SACU revenue pool.   A steep drop in SACU revenues 
in 2009 has widened the Namibian government's budget deficit. 
 
¶5.  (SBU) Section: II.  Political Reforms/Rule of 
Law/Anti-Corruption 
 
¶A. Major Strengths Identified 
 
- Freedom House's Freedom in the World index ranks Namibia as "Free" 
(Ranking: 2). 
 
- Several elections since independence have been accepted 
domestically and by the international community as reflecting the 
will of the people. 
 
- The constitution provides for an independent judiciary and the 
government respects this in practice. 
 
- Rights to due process, a fair trial, and equal protection under 
the law are well established, although the right to a fair trial is 
limited somewhat in practice by long delays in hearing cases in the 
regular courts and the uneven application of constitutional 
protections in the traditional system. 
 
- Anti corruption legislation and institutions have been established 
to combat corruption. An Anti-Corruption Commission, launched in 
January 2006, investigates instances of corruptions and refers them 
to the Office of the Prosecutor General for prosecution. Other 
anti-corruption institutions include the Office of the Ombudsman, 
the State-Owned Enterprises Governance Council, and the Office of 
 
WINDHOEK 00000374  003 OF 006 
 
 
the Auditor General. 
 
- Opposition parties are able to register and participate in 
elections. 
 
¶B. Major Issues/Problems Identified 
 
- A large court backlog, lengthy pretrial detention, and lengthy 
delays during trials remain problems. 
 
- The law prohibits corruption, and the government has shown 
improvement in addressing the problem, but officials continued to 
engage in corrupt practices. The World Bank's Worldwide Governance 
Indicators reflected that corruption was a problem. 
 
- In May, the government implemented the Financial Intelligence Act 
and the Prevention of Organized Crime Act, paving the way for 
authorities to monitor and prosecute money laundering activities and 
organized crime, as well as impose forfeiture measures on the 
proceeds of crime. The new laws are expected to bolster efforts to 
combat money laundering and its predicate financial crimes, such as 
tax evasion, false accounting, and corruption. 
- Over the past three years Namibia has slipped to 61 out of the 180 
countries on Transparency International's Corruption Perception 
Index.  In 2006, Namibia was 55, and in 2007 it ranked 57th. 
 
- Media practitioners, civil society, political commentators and 
other persons criticized the passing of a new Communications Bill, 
which contains a clause that allows the intelligence services to 
intercept phone calls and short message service (SMS), as well as to 
monitor e-mails and internet usage with authorization from any 
magistrate. Many had argued that interception should only be 
authorized by the judge president of the High Court. Opponents 
called the law an invasion of privacy and a violation of the right 
to freedom of expression. 
 
- Although to a lesser extent than 2008, opposition political 
parties still faced harassment when organizing in some areas of the 
country by ruling party supporters. 
 
¶6. (SBU)  Section III. Poverty Reduction 
 
¶A. Major Strengths Identified 
 
- The government recognizes the importance of economic growth to 
poverty reduction and actively encourages inward foreign investment. 
 Government officials have praised AGOA for creating opportunities 
for value-added manufacturing. 
 
- In July 2008, the government and MCC signed a $304.5 million 
poverty reduction grant.  The Namibian National Assembly ratified 
the compact in November 2008, and it entered into force in September 
¶2009. The MCA compact will support the education and training 
sector, increase productivity of farm enterprises in communal rural 
areas and promote growth in Namibia's tourism industry. 
 
- The government continues to encourage black economic empowerment 
(BEE) partnerships, many in joint ventures with foreign investors, 
to increase economic participation of historically disadvantaged 
Namibians.  The government has been criticized, however, for its 
failure to implement a formal BEE policy. 
 
- Namibia has adopted a fiscally prudent and balanced macroeconomic 
approach to addressing poverty. 
 
- In the 2009/2010 budgetary year, 9.6 percent of total expenditures 
were for the health and social services sector and 21.5 percent were 
for education. 
 
- The 2009/2010 budget also made provision for an increase in the 
number receiving social grants. 
 
- Growth and poverty reduction are central to the government's goals 
and have been included in all development policy documentation, 
including the government's long-term development plan, Vision 2030. 
 
- The government's Drought Relief Program continues to provide free 
food rations to a considerable number of people. 
 
- The government recognizes the needs of the micro-enterprise sector 
and is addressing them through policy and legislation to enable more 
coordinated service delivery and access to credit needed by the 
large section of the population attempting to enter the formal 
sector. 
 
- In August, the Bank of Namibia granted a provisional banking 
 
WINDHOEK 00000374  004 OF 006 
 
 
license to FIDES Bank Namibia, the first micro-finance bank in the 
history of Namibia. 
 
- In 2007, the government negotiated a deal with De Beers which will 
ensure supply of Namibian rough diamonds to local diamond cutting 
and polishing factories. This has resulted in a major boost for the 
diamond cutting and polishing sector. 
 
- The government continues to support the state-owned national 
energy utility's (Nampower) infrastructural development for power 
generation to ensure security of electricity supply. 
 
- The government allocated substantial resources for the upgrade of 
airport, roads and railway facilities over the medium term. 
 
¶B. Major Issues/Problems Identified 
 
- A 2004 Namibia Labor Force Survey determined that chronic 
unemployment exceeds 36 percent.  The rate of female unemployment is 
higher than that of men. 
 
- After becoming AGOA eligible in 2000, Namibia attracted over $300 
million in investment and created nearly ten thousand new jobs in 
the textile and apparel industry.  In May 2008, the Malaysian 
company Ramatex permanently closed its operations, claiming 
operational losses. 
 
- Some of the factors that contributed to the closure of two apparel 
companies include low worker productivity, ongoing labor disputes, 
transportation delays, strikes, poor public relations, and 
environmental issues. 
 
- HIV/AIDS threatens to undermine economic growth and social 
cohesion.  The government recognizes the severity of the problem, 
and has launched serious counter programs, many in close 
coordination with USG agencies.  Namibia is one of 15 focus 
countries benefiting under the President's Emergency Plan for AIDS 
Relief. 
 
- Although the government still lacks an official BEE policy, BEE 
schemes in general have come under fire for benefiting a select few 
elites rather than serving as a tool for empowerment. 
 
¶7. (SBU) Section IV. Workers' Rights/Child Labor/Human Rights 
 
¶A. Major Strengths Identified 
 
- The Constitution provides for freedom of association, including 
freedom to form and join trade unions and the government respects 
that right in practice. 
 
- Internationally recognized worker rights are protected and 
respected in the 2007 Labor Act.  Forced or bonded labor by adults 
and children is prohibited. 
 
- The government is working with the ILO to harmonize the work of 
its Labor Law Courts with other similar courts in the southern 
Africa region. 
 
- Namibia has ratified 10 of the International Labor Conventions 
including Convention 182 on the Worst Forms of Child Labor. 
 
- The government began to implement recommendations emanating from 
the National Initiative to Eliminate Exploitative Forms of Child 
Labor. 
 
- The government generally respects the rights of its citizens, 
although there were problems in several areas. 
 
- The government has made progress in improving prison conditions, 
although conditions at police detention centers continue to raise 
serious concerns. 
 
- The legislature has passed laws requiring more stringent penalties 
for rape and child abuse. 
 
- In recent years, there has been significant improvement in the 
attention paid to women's issues and the rights of the disabled. 
 
- The Prevention of Organized Crime Act enacted in November 2004, 
which entered into force in 2009, specifically prohibits trafficking 
in persons.  The Government conducted a nationwide baseline study to 
assess the extent of the problem. 
 
- A new Labor Act of 2007 will come into force on November 1, 2008, 
It includes conciliation and arbitration provisions, and fixed 
 
WINDHOEK 00000374  005 OF 006 
 
 
timelines for reaching settlements. 
 
¶B. Major Issues/Problems Identified 
 
- While workers have the right to form and join trade unions, most 
unions are affiliated with the ruling party. 
 
- There are a small number of independent unions. 
 
- The right to strike is limited to disputes involving specific 
workers' interests (e.g., pay raises).  Unions cannot legally strike 
on behalf of terminated employees. 
 
- Labor disputes have taken up to three years to resolve. 
Knowledgeable sources within the employment and labor community 
estimate there are more than 800 cases awaiting resolution in Labor 
District Courts. 
 
- No statutory minimum wage law exists, although three labor sectors 
(construction, security, farm workers) have negotiated minimum wage 
agreements.. 
 
- Child labor continues to be problem, particularly on communal 
farms and in the informal sector. 
 
- Government enforcement of labor provisions can be inconsistent. 
Some foreign companies have been publicly criticized for engaging in 
unfair competition by not following safety and compensation 
standards, especially in the construction sector. 
 
- There have been some reported instances of security forces 
assaulting or otherwise mistreating citizens during arrest or in 
detention. 
 
- Sub-standard conditions and overcrowding in prisons and police 
detention centers remain challenges. 
 
- Racial and ethnic discrimination, especially in remote rural areas 
where indigenous people often are unaware of their rights, 
continues. 
 
- Violence against women and children, including rape and child 
abuse, continues to be a problem, as well as discrimination against 
women. 
 
- A baseline assessment conducted by the government confirmed that 
Namibia is a source and destination country for trafficked children; 
however, the magnitude of this problem is unknown. Press reports and 
civil society organizations indicate that child prostitution is not 
uncommon. 
 
¶8. (SBU) Section V. International Terrorism/U.S. National Security 
 
¶A. Major Strengths Identified 
 
- Although the Parliament has not yet enacted an anti-terrorism bill 
(one has been circulating since 2003), the Namibian Government has 
been receptive to U.S. counter-terrorism concerns and has pledged 
cooperation on intelligence sharing, including the exchange of 
information on suspicious financial flows.  The Namibian Government 
regularly acts on additions to the UN 1267 Sanctions Committee 
list. 
 
- Pursuant to UNSCR 1373, the Namibian Government has taken certain 
steps to prevent and suppress terrorism, including signing the 
International Convention for the Suppression of the Financing of 
Terrorism in November 2001, and becoming party to the 1979 
Convention on the Physical Protection of Nuclear Material in March 
2002 and the Convention for the Suppression of Unlawful Acts against 
the Safety of Maritime Navigation in July 2004. 
 
- There are no legal impediments to the prosecution of terrorists in 
Namibia. 
 
- - The Financial Intelligence Act (FIA) of 2007 (developed in 
consultation with U.S. Traesury, the IMF and UN) came into force in 
April.  The legislation is administered through the newly 
established Financial Intelligence Centre (FIC) at the Bank of 
Namibia.  The center has anti-terrorist financing responsibilities. 
The U.S. Department of Treasury provided technical assistance to 
help establish the center and to train law enforcement officials in 
financial investigation techniques. 
 
¶B. Major Issues/Problems Identified 
 
- Progress in implementing UNSCR 1373 has been slow; important 
 
WINDHOEK 00000374  006 OF 006 
 
 
legislation is still pending.  Although Namibia has drafted  a 
Combatting of Terrorist Activities Bill which will criminalize 
terrorist financing, that is, the raising, providing, or use of 
funds, whether from a legal or illegal source, for terrorist 
purposes.  The Bill does not, however, provide for the  liability 
for legal persons which are used to facilitate terrorist financing 
or terrorist activities.  Furthermore, there is no legislative, 
regulatory or institutional framework for freezing and seizing 
terrorist funds or other 
assets of persons. Namibia has also made little progress in becoming 
party to the 12 international conventions and protocols relating to 
terrorism.  To date, Namibia has signed only three of the 12 and 
acceded to two.