By Irvin Titus and Stephen Vlieghe
Over the last few years, Namibia has been boosted to the top of Africa’s Greenfield FDI Performance Index and is second globally, reflecting increasing investor confidence in the country’s stability, governance and long-term potential.
The Index tracks and ranks countries based on their ability to attract foreign direct investment (FDI) relative to the size of their economies.
According to the Bank of Namibia’s latest FDI Report, net inflows have amounted to more than NAD 114.9 billion since 2021, with the majority channelled into oil and gas exploration.
Even excluding oil and gas, other sectors attracted NAD 56 billion, indicating strong and broad-based investor interest, over the same period.
To facilitate this investment, a range of regulatory reforms are currently underway. These include the modernisation of its dispute resolution framework, enhanced investor protection laws, and improvements the Government has made to the ease of doing business in the country.
As an example, Namibia’s Sixth National Development Plan (NDP6) and 2025 Budget signalled a pro-investment shift in terms of a budget allocation of more than NAD 2.7 billion to transport, logistics and digital infrastructure. The aim of this is to boost Namibia’s role as a regional export hub.
Namibia’s alignment with the principles of African Continental Free Trade Area investment protocol and its participation in regional efforts to harmonise trade and legal frameworks also reflect the country’s commitment to cross-border integration.
Emerging sectors
Namibia’s net FDI inflows are sourced mainly from China, the Arab Gulf states, the United Kingdom and France.
The country is making significant progress in developing its green hydrogen, solar and wind projects, positioning itself as a regional leader in clean energy.
Europe’s focus on energy diversification and the Gulf States’ green transition strategies align very well with Namibia’s approach to clean energy and have resulted in significant investor interest from countries in those regions.
The country’s digital economy strategy, which is part of the Financial Sector Transformation Strategy 2025–2035, is attracting the interest of businesses in fintech, data infrastructure and e-commerce.
For example, investment in the development of mobile money and digital wallet platforms is assisting those previously excluded from financial platforms.
Most of the FDI into Namibia continues to be greenfield investment. In 2024, announced greenfield projects exceeded NAD 2.2 billion in value, which amounted to an increase of 85% from the previous year.
The interest in greenfield investment is significant, as it reflects the focus on new infrastructure development, the creation of jobs, and the development of capabilities, rather than transfers of ownership.
In 2024, FDI was mostly directed towards oil and gas exploration and appraisal. The country’s offshore oil discoveries in the Orange Basin have drawn significant investor attention, but other sectors are also growing, particularly projects in the manufacturing and renewable energy sectors.
Other major sources of FDI were Canada and Mauritius – both countries made investments in mining activity. Investment in the transport and storage sector also rose during 2024, mostly due to investment in the port of Walvis Bay.
Merger and acquisition transactions in the manufacturing sector, from investors in South Africa, contributed to FDI inflows of NAD 4.1 billion in 2023. An example of a recent large transaction in this sector is Coca-Cola Beverages Africa’s NAD 900 million investment in a new bottling line and water treatment plant.
Local impact
The country is not without its challenges, with youth unemployment is still unacceptably high.
The Government has therefore made it clear that FDI must focus on inclusive growth. Focusing on the upstream oil and gas industry, a comprehensive National Upstream Petroleum Local Content Policy, designed to transform the country’s burgeoning oil and gas sector into a catalyst for broad-based economic growth, sustainable development, and national empowerment, has been introduced.
The policy’s vision is to establish an internationally competitive petroleum sector that maximises value for Namibia through meaningful and sustainable participation by Namibians and local companies across the entire value chain. The mission is to enhance the benefits accruing to Namibian citizens by fostering phased participation of local companies, workforce, goods, and services, while ensuring technology transfer, capacity building, and innovation.
The Namibia Investment Promotion and Development Board (NIPDB) has taken numerous steps to enable this approach, including creating a national small and medium enterprises database to connect investors with local suppliers.
Incentives
To ensure sustainable growth, Namibia must balance the attraction of investment capital with ensuring public interest is protected. ESG compliance frameworks, and sector-specific incentives have stipulated that investors must support sustainability initiatives.
The NIPDB plays a major role in this balancing act by ensuring transaction approvals are streamlined, transparent and aligned with national development priorities.
The role of legal advisors
Behind the scenes, legal advisors are facilitating this investment, advising the country’s biggest investors on regulatory compliance, ESG integration and local content obligations, for example.
As a result, corporate law offices are expanding across the country and have been for some time. At the beginning of March 2024, Koep & Partners, which had an established and growing presence in the country for over 40 years, joined forces with African law firm Bowmans.
The integration of the two firms is already proving beneficial to clients, particularly investors in energy and natural resources, maritime and shipping, and oil and gas.
Since then, a number of other law firms have followed suit.
* Irvin Titus is a Senior Partner, and Stephen Vlieghe is the Managing Partner at Bowmans Namibia.
