Namibia has a large urban population, with 70 percent of them living in the north. The northern-central and north-eastern parts of Namibia such as Oshakati are experiencing an extensive urbanisation trend. The majority of Namibia’s young lives in the northern regions. Namibia is well placed to attract investments to meet the growing urban middle class and younger populations.
Investment opportunities
Investment in Namibia is a great choice for those looking to turn a profit and establish an presence in the country. Namibia is one of Africa’s smallest countries. However, it has an urban middle-class that is growing and a relatively small population. The absence of a big government means that businesses can utilize their strengths to take advantage of the growing economy in Namibia. Aside from being rich in natural resources, Namibia also offers a low tax rate and an infrastructure that is strong enough for foreign investment.
The country is currently going through an ambitious program of infrastructure renewal. Namibia is a great investment destination through equity and public-private partnerships. The current focus areas include power generation and how to get investors transmission, logistics, and water infrastructure. There are numerous opportunities in the construction and maintenance of rail and road infrastructures, as well as affordable housing. When investing in Namibia, be sure to look for an investment bank that is reputable. The government is seeking partners to help realize its ambitious goals.
The country is rich in natural resources that could increase the returns of investors. Large Chinese companies have made investments in the mining industry as have South African businesses in the diamond and banking industries. Spain and Russia have made substantial investments in the fishing sector. Other foreign countries have expressed interest in exploration of oil in Namibia’s waters. Opportunities for FDI include manufacturing, logistics, and mining. The FDI market in Namibia is an ideal place to start if you are looking to increase your investment.
Challenges
In Namibia, the start-up ecosystem has not been able to match entrepreneurs with the appropriate investors. Entrepreneurs are often drawn to bad investors who will cause more harm than good. The ideal investor will give access to money, time, and access to startups. Investors who are new will not have the same connections or knowledge as experienced investors. Namibian investors must be cautious when deciding on which projects to invest in.
While the investment environment in Namibia has improved in recent years, there are still significant obstacles. The country has a low domestic market, limited skilled labor pool, and high transport costs. Despite these difficulties the country is going through an expansion of its vaccination program which is expected to reduce production bottlenecks and revive the tourism industry. The government has placed a high priority on attracting foreign investment, reducing the high rate of unemployment, as well as diversifying the economy.
There are many opportunities to FDI to Namibia. Namibia is home to several large Chinese companies, which have significant investments in the uranium industry. Canada and South Africa are also significant investors in Namibia with substantial investments in mining and banking. The Office of the President is also focused on the development of renewable energy sources. Other sectors that are highly desirable include mining and tourism which are the principalstay of the economy of the country. In general, commodity prices will increase in the next few years, enabling more companies to take advantage of private equity.
Government support
The Namibian government is working to eliminate administrative obstacles that might hinder ease of doing business. The Investment Promotion Act is currently under review, and this new law is scheduled to replace the outdated Foreign Investment Act. While this new law is aimed at attracting foreign investment, those looking to fund projects in Namibia must be aware its intricacies. A business owner might not be able to access information regarding a project, including the financial situation of the owner.
The Registrar of Companies manages Namibia’s companies and regulates the formation of businesses. While registration is mandatory investors are urged to seek out assistance from the Namibia Investment Centre. The Namibia Investment Centre offers services for investors, beginning with the initial inquiry phase, and concluding with operations. It also provides information on projects, incentives, and procedures. The investment center streamlines processes and works with regulatory and government agencies. This enables investors to focus on projects that will benefit the country.
The private sector in Namibia heavily depends on bank financing, the banking industry is relatively weak in terms of funding new businesses. The majority of commercial banks in Namibia apply traditional lending methods. This requires that start-up businesses pledge collateral to receive a loan. In the end, the amount of loans that are unsecured is limited, and bank loans are generally risky. In addition, the support of the government for investors looking for projects to fund in Namibia is insufficient.
Financial institutions
If you’re in search of a good project in Namibia there’s no need to look elsewhere. The Namibian Government and a number of financial institutions are looking to help with economic development and private sector development. The Development Bank of Namibia (DBN) has recently convened a stakeholder panel which revealed that Namibia requires more than grant funding. Public-private financing is essential in order to build capacity for production as well as modernize customs practices and provide free access to information. The panel concluded that, among other things that transparency and a good corporate governance system were essential.
There are many types of investors in Namibia. Public funders include the Development Bank of Namibia and Start-Up Namibia, which is a new initiative to promote the start-up industry in Namibia. These funders are more eclectic and focus more on grants or concessionary loans rather than equity investments. These funders may be the right fit for you if have a significant impact on society and are in the initial stages of your company. However, it is important to remember that government funds can impose restrictions on how to get investors companies conduct business.
Although Namibia isn’t currently pursuing a privatization plan however, there are discussions regarding privatizing state-owned companies. For instance, the Government Institutions Pension Fund has committed 340 million dollars to private equity funds over the past decade. Its mandate is to finance infrastructure as well as small and medium-sized business development, and bulk municipal services. Recently the government announced plans to sell part of its stake in Air Namibia, the state-owned airline. The government will reduce its debt with the proceeds from the sale.
Taxes
While Namibia does not have an exclusive tax regime for foreigners, Namibia has a number of tax-friendly options that could be appealing to investors. One, foreign companies can’t avoid paying Namibian dividend taxes which is a 10 percent tax on dividends coming from Namibia. There is no securities tax in Namibia. However, investors must be aware that certain capital gains are taxed as normal income. Third, Namibia is a member the Common Monetary Area and its dollar is tied to the South African rand. Furthermore, certain sectors require that at least a certain proportion of the money be local to fund projects they finance.
The Namibian financial system is reliable and transparent. The country is part of the Common Monetary Area, a group of southern African countries. As such, foreign currency remittances to Namibia have been averaging less than one-fifth of Namibia’s GDP in the past decade, according to World Bank Development Indicators. Most Namibian remittances are handled by commercial banks. And the BON has not changed the rules for investment remittances over the last few years.
Economic empowerment
This article will help investors in their search for projects to finance in Namibia. The Namibian government is the owner of numerous enterprises. They are referred to as parastatals and constitute more than 40 percent of GDP. Most are perpetually unprofitable, however, they receive financial aid from the government. Foreign investors are part of joint ventures, but this has hindered their growth.
The government is generally transparent when it comes to public policy. It releases its annual budget as well as mid-term reviews in the Government Gazette and consults with interested parties when preparing its budget. It also releases the government’s debt position as well as contingent. The fiscal framework is generally free of corruption. The Namibian government doesn’t impose any mandatory localization requirements. The policies of the government encourage local content and foster local ownership of state-owned businesses.
The government of India is trying to improve the financial markets and draw more foreign capital. The SDG Investment Fair brings together investors from various sectors to invest in sustainable development projects in developing countries. Namibia’s Hydrogen Commissioner and Economic Advisor are represented by the President. Both are part of the Common Monetary Area (CMA). This agreement allows capital flow between the two countries. Investors from all over the world can attend the event and view the opportunities available to invest in the country.
Sector of water
The Namibian water sector has been able to receive approximately 25% of country’s national budget. In this regard, the Government of Namibia has set up a Namibia Water Sector Support Program to draw foreign investors. This program is designed to improve the water infrastructure and investors looking for projects to fund in namibia supply water to the country. The government is currently seeking international investors and private sector companies, to fund the program. The government has received an award from the African Development Bank Group.
There are several investment opportunities in the water sector in Namibia. EOS Capital is one of these companies. It announced recently that it had raised 90 million Namibian dollars in its first Euphrates Agri Fund funding round. The fund’s first investment was in Cherry Irrigation Namibia. The company plans to invest further in the country’s water infrastructure as well as in the agriculture sector.
Green bonds are an attractive alternative to traditional bank loans and there is a substantial market in Namibia. AFD has developed the Namibian green financing label that encourages local commercial banks to expand their green lending activities. The Bank Windhoek is currently working to develop a pipeline of green financing projects and is currently considering the possibility of a second issue. A Green Bond is similar to an unconvertible debt. The main difference is that these bonds are not secured by physical assets, but are supported by the credibility of the issuer and the document in an indenture.