Namibia has a large urban population, 70 percent of whom reside in the north. The trend towards urbanization is growing in the northern-eastern and northern-central regions, including Oshakati. In addition that the majority of Namibia’s younger population is located in northern regions. As such, the country is ripe for investment to meet the needs of the population that is younger and the growing middle class in urban areas.
Investment opportunities
Investment in Namibia is a great option for those looking to turn an income and establish an identity in the country. Namibia is one of the countries with the lowest population. However, it has an urban middle-class that is growing as well as a tiny population. Businesses can capitalize on their strengths to profit from Namibia’s growing economy since there is no large government. Namibia is rich in natural resources and has an extremely low tax rate. Also, it has a well-developed infrastructure to draw foreign investment.
The country is going through an ambitious program of infrastructure improvement. Namibia offers investment opportunities through public-private partnerships and equity holdings. The current focus areas include power generation and transmission, logistics, and water infrastructure. Opportunities are available in the construction and maintenance of rail and road infrastructure, as well as in affordable housing. When investing in Namibia make sure you choose a reputable bank. The government is looking for partners to help in implementing its ambitious goals.
The country is rich in natural resources that can assist investors increase their profits. Mining sector investments have been made by big Chinese companies, as well as South African banks and diamond businesses. Spain and Russia have made substantial investments in the fishing sector. Other foreign countries have expressed an interest in oil exploration in Namibia’s waters. Opportunities for FDI could include manufacturing, logistics as well as mining. If you want to maximize your investment, Namibia is a great place for you how to get investors start.
Challenges
In Namibia, the start-up ecosystem hasn’t been able to match entrepreneurs with the appropriate investors. Entrepreneurs tend to seek out bad investors that could cause more harm than good. An ideal investor will provide time, access and money to startups. New investors will be limited to the right connections and lack of information about market conditions. Namibian investors should be cautious when deciding on which projects to fund.
Although the investment environment in Namibia has improved in recent years, there remain significant challenges. Namibia has a weak domestic market, a weak labor pool, and high transportation costs. Despite these issues the country is currently going through an expansion of its vaccination program which is expected alleviate production bottlenecks and reopen the tourism sector. The government has emphasized the attraction of foreign investment, tackling unemployment and diversifying the economy.
There are numerous opportunities for FDI to Namibia. Numerous large Chinese companies have invested significant amounts in Namibia’s uranium industry. Other countries that have substantial investments in Namibia include South Africa and Canada, which have considerable holdings in mining and the banking sector. The Office of the President is also looking to develop renewable energy sources. Tourism and mining are also highly sought-after industries. These are the mainstays of the country’s economic activity. In general, commodity prices will rise in the next few years, which will allow more businesses to access private equity.
Government support
The Namibian government has acknowledged the bureaucratic procedures which can hinder the business efficiency, how to get investors and is currently working to address these challenges. The Investment Promotion Act is currently under review, and this new legislation is expected to replace the previous Foreign Investment Act. This new law is expected to draw foreign investment. However, investors who wish to finance projects in Namibia should be aware of the nuances. For instance an owner of a business may not have access to details about a project, like the financial status of the owner.
The Registrar of Companies manages Namibia’s companies and regulates business formation. Although registration is mandatory, investors should seek the assistance from the Namibia Investment Centre. The Namibia Investment Centre provides services to investors starting in the early phases of inquiry through operations. It also provides information on projects, incentives, as well as procedures. The investment center also streamlines processes and coordinates with regulatory and government entities. This enables investors to focus on projects that benefit the country.
While Namibia’s private sector is heavily dependent upon bank financing, the banking sector is relatively weak in terms of funding startups. Many commercial banks in Namibia follow orthodox lending practices, which requires start-up businesses to pledge collateral for loans. As a result, the amount of loans that are unsecured is limited, and bank loans are generally risky. A lack of government support is available for investors looking to finance projects in Namibia.
Financial institutions
If you’re in search of an excellent project in Namibia, you’re not alone. The Namibian government and a number of financial institutions want to support economic development and private sector development. A recent stakeholder panel convened by the Development Bank of Namibia (DBN) revealed that Namibia requires more than just grant funding. Public-private financing is essential in order to build productive capacity, modernise customs, business funding and facilitate free access to information. The panel concluded that, among other things, that transparency and good corporate governance were essential.
There are a variety 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 community 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 significant social impact and are in the beginning stages of your company. It is important to be aware that government funds can limit the way that companies can operate.
Although Namibia has no privatization plan there are discussions of privatizing state-owned enterprises. For instance, the Government Institutions Pension Fund has committed 340 million dollars to private equity funds over the last decade. It has the mandate to fund infrastructure small and medium-sized enterprises development, and bulk municipal services. Recently the government announced plans to sell part of its stake in Air Namibia, the state-owned airline. The proceeds from the sale will be used to help reduce the amount of debt owed by the government.
Taxes
Namibia is not a country with a distinct tax system for foreigners. However it does have variety of tax-friendly features that could be appealing to foreign investors. For one, foreign companies can’t avoid paying dividend taxes in Namibia, which is a ten percent tax on Namibian-sourced dividends. There is no tax on securities in Namibia. However, investors should be aware that certain capital gains can be taxed as normal income. Thirdly, since Namibia is an ally of the Common Monetary Area, its dollar is tied to the South African rand. Furthermore, certain sectors require a certain percentage of local ownership in projects that they fund.
Namibia’s financial system is reliable and transparent. Namibia is part of the Common Monetary Area (a group of southern African nations). In this way, foreign currency remittances to Namibia have been consistently less than one fifth of the country’s GDP over the last decade, as per World Bank Development Indicators. Most remittances are processed through commercial banks. The BON has not changed investment policy on remittances over the last few years.
Economic empowerment
This article can help investors in their search for projects to finance in Namibia. The country’s government owns an array of businesses. These companies are known as parastatals, and they contribute more than 40% of GDP. The majority of them are unprofitable but they receive subsidies from the government. Foreign investors are involved in joint ventures, however this has hampered their growth.
The government is generally transparent in its public policy. It publishes its annual budget as well as mid-term reviews in the Government Gazette and consults with interested parties when it is preparing its budget. It also publishes its government’s debt situation, including contingent and explicit liabilities. The framework for its fiscal policy is generally free of corruption. The Namibian government doesn’t impose any mandatory localization requirements. Government policies are designed to encourage local content and encouraging local ownership of state-owned enterprises.
The government of the country is working to improve its financial market and to attract more foreign capital. The SDG Investment Fair brings together investors representing different sectors to invest in sustainable development projects for developing nations. 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 to freely flow between these two countries. Investors from around the world are invited attend the event to view the opportunities for investment in the country.
Sector of water
The Namibian Water Sector has received approximately 25% of the budget for the country’s national budget. The Namibia Water Sector Support Program was created by the Government of Namibia to attract foreign investors. The goal of the program is to develop infrastructure that is water-related and supply potable water to the nation. The government is looking to attract 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 the water sector in Namibia. EOS Capital is one of these companies. The company announced recently that it had raised 90 million Namibian dollars in its initial Euphrates Agri Fund funding round. The fund’s first investment was Cherry Irrigation Namibia. The company is planning to continue investing in Namibia’s infrastructure for water as well as in the agriculture sector.
Green bonds are a viable alternative to traditional bank loans and there is a huge market in Namibia. AFD has created a green financing label for Namibia that encourages the local commercial bank to expand its green lending activities. The Bank Windhoek is currently working to create a pipeline of green financing projects and is considering another issue. Green Bonds Green Bond works in a similar way as a non-convertible debenture with the primary difference being that these bonds are not secured by physical assets, however, they are backed by the reputation of the issuer and documents indentures.