The Namibian government is mulling over a draft bill that, if approved, will make it compulsory for white-owned businesses to sell a 25% stake in the company to black investors.
If Namibia’s Economic Empowerment Framework Bill is signed into law, it will go a long way in transforming business ownership and, as a consequence, economic transformation in the country.
President Hage Geingob said economic transformation in Namibia had been excruciatingly slow since it gained independence 27 years ago, with statistics indicating that business ownership still overwhelmingly belongs in the hands of white people, despite the fact that they make up just 6% of the country’s 2,4 million population.
“The majority of Namibians remain structurally excluded from meaningful participation in the economy and, as we established earlier, inclusivity ensures harmony and exclusivity brings discord. We require the support of all Namibians to fix the obvious and dangerous flaws in our social structure,” Geingob was quoted as saying in a Reuters report.
But not everyone agrees with the president’s empowerment plan as it was cited as one of the reasons credit ratings agency Fitch downgraded the country’s economic outlook from stable to negative last year.
The fear among bodies such as the Namibian Construction Industries Federation (CIF), the Namibian Chamber of Commerce and Industry as well as the Namibian Employers Federation is that the policy could potentially deter investment in the country.
“Any empowerment initiatives should not lead to distinctions based on race as it would negatively impact race relations. Instead, poor Namibians, regardless of racial origins, should benefit through increased focus and monitoring of already existing empowerment efforts,” the CIF says.
The bill is expected to be debated in Parliament soon.