Namibia has a significant urban population, 70% of which live in the north. Northern-central and northern-eastern regions such as Oshakati are experiencing a large urbanisation trend. In addition that the majority of Namibia’s younger population lives in the northern regions. The country is well-positioned to attract investment to cater to the growing urban middle class and younger populations.
Investment opportunities
Namibia is an ideal place to invest if you are trying to make a profit or establish a presence for your business. As one of Africa’s most tiniest nations, Namibia has a small population, but it is growing urban middle class. Businesses can capitalize on their strengths to profit from Namibia’s expanding economy due to no large government. Namibia is abundant in natural resources and has a low tax rate. Also, it has a robust infrastructure to draw foreign investment.
Namibia is currently undergoing an ambitious program of infrastructure development. Investment opportunities in Namibia may take the form of partnerships between public and private or equity holdings. The current key areas of interest are power generation transportation, logistics, and water infrastructure. There are many opportunities for investment in the construction and maintenance of rail and road infrastructures and also affordable housing. If you are considering investing in Namibia, be sure to find an investment bank with a good reputation. The government is looking for partners to support its ambitious plans.
The country is rich in natural resources that can assist investors increase their profits. Investments in the mining industry have been made by big Chinese companies in addition to South African banks and diamond companies. Russia and Spain have made substantial investments in the fishing industry. Other countries have expressed desire to explore oil in Namibia’s waters. Opportunities for FDI include logistics, manufacturing mining, and logistics. If you’re looking to increase your investment, Namibia is a great place for you to start.
Challenges
The start-up community in Namibia isn’t able to match entrepreneurs with the appropriate investor. In the end, entrepreneurs tend to seek out bad investors that will do more harm than good. An ideal investor will provide time, access and money to startups. New investors may not have access to the right connections and lack of information about market conditions. Namibian investors should be cautious in deciding on projects to fund.
The investment environment in Namibia has seen a rapid improvement in recent years, however the country still faces significant challenges. Namibia has a low domestic market, a sluggish supply of skilled labor and high transportation costs. Despite these challenges the country is expanding its vaccination program which is expected to alleviate production bottlenecks and reopen the tourism sector. The government has set an emphasis on attracting foreign investment, reducing the rate of unemployment, and diversifying the economy.
There are numerous opportunities to FDI to Namibia. Many large Chinese companies have made significant investments in Namibia’s mining industry of uranium. Other countries with substantial investments in Namibia include South Africa and Canada, which hold substantial stakes in the banking and mining sector. The Office of the President is also focused on the development of renewable energy sources. Mining and tourism are also highly desirable sectors. These are the mainstays of the country’s economic activity. The general trend is for prices for commodities to rise in the coming years, which will enable more companies to take advantage of private equity.
Government support
The Namibian government has acknowledged the bureaucratic procedures that can hamper businesses’ ability to do business, and is currently working on addressing these issues. The Investment Promotion Act is currently being examined. The new legislation will likely replace the old Foreign Investment Act. Although this new law is aimed at attracting foreign investment, investors seeking to fund projects in Namibia must be aware of its nuances. A business owner may not be able to get information about a project, including the financial situation of the owner.
The Registrar of Companies is responsible for managing businesses and regulating business creation in Namibia. While registration is mandatory however, investors are advised to seek assistance from the Namibia Investment Centre. The Namibia Investment Centre provides services to investors starting in the early inquiry phases to operations. It also provides information on incentives, projects, as well as procedures. The investment centre is also able to streamline procedures and coordinates with regulatory and government agencies. This allows investors to concentrate on projects that will have positive effects on the country.
Although Namibia’s private sector heavily depends on bank finance however, the banking sector is quite weak in the area of financing start-ups. Most commercial banks in Namibia apply traditional lending methods. This requires that new companies pledge collateral in order to get a loan. This means that the amount of loans that are unsecured is limited, and bank loans are generally risky. Furthermore, the support offered by the government to investors looking to fund projects in Namibia is not sufficient.
Financial institutions
You’re not the only one searching for an ideal project in Namibia. The Namibian government and several financial institutions want to aid the development of the economy as well as private sector development. The Development Bank of Namibia (DBN) has recently convened a stakeholder panel which revealed that Namibia requires more than grants to fund. Public-private financing is essential to increase productivity as well as modernize customs and facilitate free access to information. The panel concluded, among other things, that transparency and good corporate governance were essential.
In Namibia there are several kinds of investors. Public funders include the Development Bank of Namibia and Start-Up Namibia, which is an initiative that is a first to promote the start-up scene in Namibia. These funders are more diverse, and may be focused on grants or concessionary loans, rather than equity investments. These funders might be a good fit if you have a large social impact and are in the beginning stages of your company. It is important to keep in mind that government funds can limit the way companies can operate.
While Namibia has not yet implemented a privatization program, talks have been initiated on privatizing state-owned enterprises. The Government Institutions Pension Fund, for instance, has pledged 350 million dollars to private equity funds since 2010, and has a mandate to fund infrastructure as well as small and medium-sized enterprise development, and bulk municipal services. Recently, the government announced plans to sell a portion of its stake in Air Namibia, the state-owned airline. The government plans to reduce its debt with the proceeds of the sale.
Taxes
Although Namibia does not have an exclusive tax system for foreigners, Namibia has a number of tax-friendly features that could be of interest to investors. For instance, foreign-owned companies cannot avoid paying dividend tax in Namibia that is a ten percent tax on Namibian-sourced dividends. There is no tax on securities in Namibia. Investors must be aware, however, that certain capital gains are subject to the normal income tax. Third, Namibia is a member the Common Monetary Area and its dollar is based on the South African rand. In addition, certain sectors require that a certain percentage be local for projects they finance.
Namibia’s financial system is secure and transparent. The country is part of the Common Monetary Area, a group of southern African countries. According to World Bank Development Indicators, Namibia’s foreign currency remittances have always been lower than one-fifth the GDP over the past decade. Most remittances to Namibia are handled by commercial banks. And the BON has not changed the rules for investment remittances over the last few years.
Economic empowerment
If you’re an investor looking for projects to fund with funds in Namibia, then this article may help you begin. The country’s government owns many different enterprises. These enterprises are called parastatals and they account for more than 40 percent of the GDP. They receive subsidy from the government, angel investors South Africa even though they are typically insolvent. Joint ventures are often financed by foreign investors, which has slowed their expansion.
The government is generally transparent in its public policy. It publishes its annual budget and mid-term reviews in the Government Gazette and consults with interested parties when it is preparing its budget. It also publishes the government’s debt position, both explicit and contingent. The fiscal framework of Namibia is generally clean of corruption. The Namibian government doesn’t impose any mandatory localization requirements. Government policies are aimed at encouraging local content and encouraging local ownership of state-owned companies.
The government of the country is trying to increase its financial market and attract foreign capital. The SDG Investment Fair brings together investors from various sectors to invest in sustainable development projects in developing countries. Namibia is represented by its Hydrogen Commissioner and Economic Advisor investors looking for entrepreneurs to the President. Both are part of the Common Monetary Area (CMA). This agreement allows capital to freely flow between the two countries. Investors from all over the world are invited attend the event to look at the current investment opportunities in the country.
Water sector
The Namibian water sector has been able to receive approximately 25% of the budget for the country’s national budget. To achieve this, the Government of Namibia has set up a Namibia Water Sector Support Program to draw foreign angel investors south africa (www.5mfunding.com). This program is designed to improve the water infrastructure and provide water to the country. At present, the government is trying to find international investors for the program as well as private sector companies. The African Development Bank Group has granted a grant to the government.
There are many opportunities for investment in Namibia’s water sector. EOS Capital is one of these firms. It recently announced that it has completed its first round of funding of the Euphrates Agri Fund, raising 90 million Namibian dollars. Cherry Irrigation Namibia was the fund’s first investment. The company is planning to continue investing in the country’s infrastructure for water, as well as the agricultural sector.
Green bonds are an attractive alternative to traditional bank lending , and there is a huge market in Namibia. AFD has developed an eco-friendly financing label for Namibia which encourages the local commercial bank to expand its green lending services. The Bank Windhoek is working to build a pipeline of projects that are eligible for green financing and is contemplating an additional issuance. A Green Bond works in a similar way as a non-convertible debenture with the main difference being that these bonds are not secured by physical assets however, they are backed by the reputation of the issuer and documents in an indenture.
