The Economic Policy Research Unit (EPRU) has warned that Namibia’s proposed Investment Bill, if enacted in its current form, would suppress private-sector activity and deepen the country’s unemployment, fiscal and competitiveness challenges.
In a new report, the think tank said the Bill would fail to attract investment and instead risk deterring both foreign and domestic capital.
It argued that the proposed legislation represents a decisive shift away from a rules-based, market-oriented economic framework towards a permission-based, command-and-control system driven by extensive ministerial discretion.
“The Bill does not promote investment. On the contrary, it represents a fundamental shift away from a rules-based, market-oriented economic framework toward a permission-based, command-and-control investment regime administered through extensive ministerial discretion,” the report said.
According to the EPRU, the Bill replaces legal certainty with political discretion by granting the Minister wide powers to determine who may invest, in which sectors, under what conditions and for how long. The Minister would also decide whether investments may be expanded, transferred or sold.
The report noted that these decisions are not guided by objective statutory criteria, but instead rely on broad and loosely defined concepts such as “national interest”, “public interest” and “net benefit to Namibia”.
This approach, the EPRU said, is incompatible with international best practice, where investment regimes are typically governed by clear rules, narrowly defined national security tests and oversight by independent regulators rather than political office bearers.
The EPRU further warned that ministerial discretion under the Bill is “structurally virtually unlimited”.
It said the Minister would have the authority to set policy, introduce incentives, designate sectors, require approvals, impose conditions, expand approval criteria through regulations, restrict or exempt investors, and issue binding directives.
A key concern raised in the report is that the Bill applies equally to domestic investors. The EPRU said Namibian businesses would be subject to prior approvals, ongoing monitoring, extensive information requirements, criminal sanctions and even ministerial orders to cease operations.
“In effect, Namibians become conditional participants in their own economy,” the report said.
The proposed change-of-control provisions were described as “effectively nationalised”, as any change of control in designated sectors would require prior ministerial approval.
The EPRU warned that this would undermine mergers and acquisitions activity, block private exits without state consent and make private equity and project finance unworkable.
“No serious institutional investor will invest under this regime,” the report said.
