VZCZCXRO8642
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHWD #0042/01 0150705
ZNR UUUUU ZZH
R 150703Z JAN 10
FM AMEMBASSY WINDHOEK
TO RUEHC/SECSTATE WASHDC 0077
INFO SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 14 WINDHOEK 000042 
 
SIPDIS 
FOR STATE EB/IFD/OIA D. AHN, AND T. WALSH 
FOR STATE AF/S P. GWYN 
FOR USTR W. JACKSON 
FOR DOC/ITA J. DIEMOND 
 
E.O. 12958: N/A 
TAGS: EINV EFIN ETRD ELAB KTDB PGOV USTR OPIC WA
SUBJECT: Namibia: 2010 Investment Climate Statement 
 
REF: 09 STATE 124006; 09 WINDHOEK 20 
 
 
============================== 
Openness to Foreign Investment 
============================== 
 
¶1.  (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. 
 
¶2.  (U) The Foreign Investment Act guarantees equal treatment for 
foreign investors and Namibian firms, i.e., 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. Investment incentives and special 
tax incentives are also available for the manufacturing sector. 
 
¶3.  (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. 
 
¶4.  (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 as 
well as recognizing the role of foreign investment.  The act is 
intended to promote: 
 
*     The efficiency, adaptability and development of the Namibian 
economy; 
 
*     Competitive prices and product choices for customers; 
 
*     Employment and advancement of 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. 
 
¶5.  (U) Other laws include the Companies Act and the Close 
Corporation Act. These laws provide the legal framework for the 
establishment of business entities. Implementation of the 
Competition Act and the amended Companies Act, however, is still 
pending. 
 
 
Foreign Ownership Restrictions 
------------------------------ 
 
¶6.  (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 requires local participation before issuing licenses 
to exploit natural resources. 
 
 
Black Economic Empowerment and Affirmative Action 
--------------------------------------------- ---- 
 
¶7.  (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. 
 
¶8.  (U) In certain industries the government has employed different 
techniques to increase Namibian participation..  In the fishing 
sector, companies pay lower quota fees if they operate 
Namibian-flagged vessels that are based in Namibia, with crews that 
are predominantly Namibian.  The Minister of Mining and Energy has 
made clear that prospective mining companies must "indicate and 
show commitment to empower previously disadvantaged Namibians" in 
their applications for exploration and mining licenses. 
 
 
Government Tenders 
------------------ 
 
¶9.  (U) Most government transactions, including the procurement of 
goods and services, are coordinated through the Tender Board of 
Namibia (http://www.mof.gov.na/tender.htm).  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. The board generally requires that companies are registered 
with the Ministry of Trade and Industry and that it is in good 
standing with the Department of Inland Revenue (the tax authority) 
and the Social Security Commission. 
 
 
Parastatals 
----------- 
 
¶10. (U) While Namibian companies are generally open to foreign 
investment, government owned enterprises (parastatals) have to date 
generally been closed to all investors (Namibian and foreign).  The 
following are the most prominent commercial parastatals: 
 
*     Air Namibia (Air carrier) 
 
*     Namibia Airports Company (Airport management company) 
 
*     Namibia Wildlife Resorts (Tourism) 
 
*     Namport (Maritime Port Authority) 
 
*     Nampost (Postal and courier services) 
 
*     Namwater (Water sanitation and provisioning) 
 
*     Roads Contractor Company 
 
*     Telecom Namibia (Fixed-line telecommunications) 
 
*     TransNamib (Rail company) 
 
*     NamPower (Energy generation and transmission) 
 
¶11. (U) The government owns a host of other enterprises, from media 
ventures to a fishing company.  In December 2009, the Minister of 
Mines and Energy inaugurated Epangelo Mining, a wholly 
government-owned mining company.  Parastatals own assets worth 
approximately 40%  of GDP and most receive subsidies from 
government. 
 
¶12. (U) Foreign investors have participated in joint ventures with 
government in certain sectors (i.e., mobile telecommunications and 
mining).  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.  NamDeb, a 50-50 partnership between the government and 
DeBeers has mined Namibia's land-based diamonds since 1994. 
 
¶13. (U) 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. 
 
 
Independent Ratings on Namibia's Investment Climate 
--------------------------------------------- ------ 
 
¶14. (U) Independent ratings confirm that Namibia enjoys a 
relatively positive investment climate. The World Bank ranked 
Namibia 66 among 183 countries in its 2010 Doing Business report. 
Namibia received its lowest rankings for registering property, 
trading across borders, and starting a business.  The World Bank 
reported that Namibia 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 /?economyid=135 
 
 
¶15. (U) In December 2009, the Fitch Ratings service issued its most 
recent credit analysis and assigned Namibia a long term foreign 
currency rating of BBB-.  This was consistent with Fitch's 2005 
rating of Namibia.  For more information go to: 
 
http://www.fitchratings.com (Logon required) 
 
 
Foreign Investment in the Namibian Stock Exchange 
--------------------------------------------- ---- 
 
¶16. (U) Foreigners must pay a 10% non-resident shareholders tax on 
dividends; however there are 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 
------------ 
 
¶17. (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. 
 
 
Index/Ranking 
------------- 
 
2009 TI Corruption Index        56 of 180 
 
2009 Heritage Economic Freedom  71 of 183 
 
2010 World Bank Doing Business  66 of 183 
 
2009 MCC Govnt Effectiveness    0.55  (90%) 
 
2009 MCC Rule of Law            0.59  (73%) 
 
2009 MCC Control of Corruption  0.64  (87%) 
 
2009 MCC Fiscal Policy          1.3   (75%) 
 
2009 MCC Trade Policy           88.4  (100%) 
 
2009 MCC Regulatory Quality     0.18  (67%) 
 
2009 MCC Business Start Up      0.928 (34%) 
 
2009 MCC Land Rights Access     0.571 (13%) 
 
2009 MCC Natural Resource Mgmt  78.16 (29%) 
 
 
================================ 
Conversion and Transfer Policies 
================================ 
 
¶18. (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. 
 
 
¶19. (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; 
 
*     utilize Namibian labor and natural resources to contribute to 
the economy; 
 
*     assist in the advancement of socially, economically or 
educationally disadvantaged of Namibians; 
 
*     make provisions for equal opportunities for women; and, 
 
*     likely impact the environment, and the proposed measures to 
mitigate adverse environmental consequences. 
 
 
¶20. (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.  Three of the four local 
commercial banks are subsidiaries of South African banks. All local 
commercial banks handle international transactions and trade 
financing.  Banking fees and charges are among the highest in the 
world. 
 
 
============================== 
Expropriation and Compensation 
============================== 
 
¶21. (U) Government expropriations are rare. According to the 
Foreign Investment Act, foreign investors who have received a 
Certificate of Status Investment (CSI) are entitled to "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. 
 
¶22. (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. 
 
¶23. (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. 
 
Dispute Settlement 
 
¶24. (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. 
 
¶25. (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 1973 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. 
 
¶26. (U) A new Insolvency Amendment Bill was passed in 2005 but has 
not yet been signed into law. Implementation of the new Company's 
Act of 2007 is pending  finalization of regulations. 
 
¶27. (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. 
 
¶28. (U) Namibia signed but has not ratified the Convention on the 
Settlement of Investment Disputes Between States and Nationals of 
Other States. 
 
 
======================================= 
Performance Requirements and Incentives 
======================================= 
 
¶29. (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 
---------- 
 
¶30. (U) Incentives are mainly aimed at stimulating manufacturing in 
Namibia and promoting exports. To take advantage of the incentives, 
companies must be registered with the Ministry of Trade and 
Industry (MTI) and the Ministry of Finance. Tax and non-tax 
incentives are accessible to both existing and new manufacturers. 
The MTI has developed a brochure titled Special Incentives for 
Manufacturers and Exporters which is available from the Namibia 
Investment Centre (NIC).  Namibia has also established an Export 
Processing Zone (EPZ) regime that offers favorable conditions for 
companies wishing to manufacture and export products for regional and 
international markets (see section Foreign-Trade Zones/Free Ports). 
 
 
Import Permits 
-------------- 
 
¶31. (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. 
 
¶32. (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. 
 
 
 
¶33. (U) Namibia is a party to the WTO Agreement on Import 
Licensing. 
 
 
============================================ 
Right to Private Ownership and Establishment 
============================================ 
 
¶34. (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 
----------- 
 
¶35. (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 
============================= 
 
¶36. (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. 
 
¶37. (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. 
 
¶38. (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 the administration of patents, 
marks and designs.  The law has not yet been passed. 
 
¶39. (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.  The amendments also aim to 
improve standards of IPR protection and include new aspects such as 
satellite, traditional knowledge and folklore issues.  They have 
not yet been passed and enacted, however.  Two copyright 
organizations, the Namibian Society of Composers and Authors of 
Music (NASCAM) and the 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.  NAMRRO 
protects all other intellectual property rights including literary, 
artistic, broadcasting, satellite, traditional knowledge and 
folklore. 
 
 
================================= 
Transparency of Regulatory System 
================================= 
 
¶40. (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. 
 
¶41. (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?is 
sr_id=82576967 
 
¶42. (U) Parliament passed a new Communications Act which the 
President signed into law in October 2009.  The new act replaces 
the Namibian Communications Commission Act  (Act 4 of 1992) and 
amends certain relevant sections under the Posts and 
Telecommunications Act, 1992 (Act 19 of 1992). Advocates of the new 
act argued it was needed to level the playing field for all 
telecommunication operators and improve competition. Under the act, 
the Communications Regulatory Authority of Namibia (CRAN) replaces 
the Namibian Communication Commission (NCC), which only had limited 
regulatory authority.  Although the CRAN has greater powers than 
its predecessor, civil society groups argue that the new act does 
not provide the CRAN enough regulatory independence. Such groups 
note that the Minister of Information and Communication Technology 
alone may appoint the CRAN Chairperson and Vice-Chairperson, and 
that the Minister must concur on the prescribing of any new 
broadcast licenses. The state-owned Namibian Broadcasting 
Corporation (NBC) - which transmits TV and radio services - is 
exempted from licensing procedures enumerated in the act.  The act 
also contains intelligence gathering (intercept) provisions which 
civil society groups have argued violate civil liberties and the 
Namibian constitution. To comply with the intercept provisions, 
telecommunications companies could be saddled with many technical 
burdens and significantly higher costs, critics argue. 
 
¶43. (U) The Bank of Namibia (BoN) regulates the banking sector. 
The Namibia Financial Institutions Supervisory Authority (NAMFISA) 
regulates non-banking financial institutions. The authority aims to 
reduce financial crime through developing and implementing 
effective regulatory systems. 
 
============================================= ===== 
Efficient Capital Markets and Portfolio Investment 
============================================= ===== 
 
¶44. (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. 
 
¶45. (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 to 
Namibian investments.  Namibia has a world-class banking system 
that offers all the services needed by a large company. 
 
¶46. (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. 
 
================== 
Political Violence 
================== 
 
¶47. (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 and 2009 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. 
 
¶48. (U) State Department's 2008 Human Rights Report for Namibia: 
http://www.state.gov/g/drl/rls/hrrpt/2008/af/ 119016.htm 
 
 
========== 
Corruption 
========== 
 
¶49. (U) Transparency International ranked Namibia 56 out of 180 
countries in its 2009 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 South Africa's score of of 4.7.   Only four 
sub-Saharan African countries (Botswana, South Africa, Mauritius 
and Seychelles) ranked higher. See: 
 
http://www.transparency.org/policy_research/s urveys_indices/cpi/200 
9/cpi_2009_table 
 
¶50. (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.  Some critics charge that the 
ACC narrowly interprets its mandate and focuses on minor cases.  In 
2009, the ACC filed charges against a number of high-profile 
government officials. 
 
¶51. (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. 
 
=============================== 
Bilateral Investment Agreements 
============================== 
 
¶52. (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 and no 
bilateral tax treaty 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. 
 
¶53. (U) As a member of the Southern African Customs Union (SACU), 
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 
 
 
============================================ 
OPIC and Other Investment Insurance Programs 
============================================ 
 
¶54. (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).  OPIC also has invested in Helios 
Sub-Saharan Africa Fund which in turn invested in Africatel 
Holdings("Africatel"). Africatel, a subsidiary of PortugalTelecom 
Group, owns 34% of Namibia's largest cell provider MTC, while the 
government owns the remaining 66%. 
 
¶55. (U) 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. 
 
 
===== 
Labor 
===== 
 
¶56. (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. 
 
¶57. (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. 
 
¶58. (U) In 2007, Namibia passed a new Labor Act. The new law, which 
entered into force in November 2008, prohibits  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 contained a provision that prohibited the 
hiring of temporary or contract workers, but the provision was 
ruled unconstitutional by the Supreme Court. Amendments to the 
Labor Act to regulate the hiring of contract workers are being 
drafted. 
 
 
============================== 
Foreign-Trade Zones/Free Ports 
============================== 
 
¶59. (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) 
----------------------------- 
 
¶60. (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. 
 
¶61. (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 ODC and 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 
 
 
==================================== 
Foreign Direct Investment Statistics 
==================================== 
 
¶62. (U) United Nations Conference on Trade and Development (UNCTAD) 
estimates that in 2008, FDI stocks were equivalent to 39 percent of 
GDP, and FDI inflows represented 36 percent of gross fixed capital 
formation.  For country specific figures up to 2008, please see the 
UNCTAD website and select Namibia: 
 
http://www.unctad.org/Templates/Page.asp?intI temID=3198&lang=1 
 
 
============= 
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