BUSINESS White business uncertainty as Namibia drafts new empowerment bill
GABORONE: White- owned businesses in Namibia are pondering whether to leave the country or stay and take court action to fight a new government indigenisation and economic empowerment bill which, if approved in its present form, would require them to sell 25 percent ownership to “previously disadvantaged peoples”.
L a s t mont h , Na mi b i a started public consultation on the New Equitable Economic Empowerment Bill, which would require all white-owned businesses to cede at least 50 percent of management positions.
The bill also prohibits white males from selling such ownership to their wives regardless of whether they are previously disadvantaged people or not and prohibits beneficiaries from selling any portion of their businesses to white males.
It calls for a council consist- ing of selected cabinet members and six other people to preside over the selection of companies and the sale and transfer of shares. This council would be empowered to seize documents and equipment from companies in cases where improper conduct was alleged and to close businesses deemed to have failed to comply with the law.
Top Namibian investment risk analyst and consultant Eben De Klerk said many white business people were considering leaving the country for friendlier investment destinations. He said there was a low prospect of success for a court challenge to the constitutionality of the bill.
“We were advised that although a court challenge is possible, it is more likely the court will respond with a fallback argument to the effect that the bill is still in draft format, which means that the court cannot make an order at this consultative stage.”
Legal consultants had also warned although the Namibian Companies Act provides several safeguards against expropriation, this was no guarantee of security as the government could amend and re-align this act with the new empowerment law.
De Klerk said if approved, the bill would cripple the Namibian economy. He said businesses preferred Mauritius because they found its flat tax- ation, high GDP and corruption-free business environment more attractive to the “nonenabling” legal, political and economic environment in Namibia.
However, the office of the Namibian prime minister defended the bill, saying it did not contravene the constitution. Permanent Secretary in the PM’s office Andrew Ndishishi said many countries had successfully implemented similar laws. – ANA
Eben De Klerk