Namibia has a large urban population, with 70% of which live in the north. The trend towards urbanization is increasing in the northern-eastern and northern-central regions, such as Oshakati. Additionally, the majority of Namibia's youth population is in the northern regions. As such, the country is ripe for investments to meet the needs of the younger population and the growing urban middle class.
Investment opportunities
Namibia is a fantastic place to invest if you're looking to make a profit or establish a presence for your business. Being one of the smallest nations, Namibia has a small population, but a growing urban middle class. Companies can make use of their strengths to benefit from Namibia's rapidly growing economy because there is no huge government. In addition to being rich in natural resources, Namibia also offers a low tax rate and an infrastructure that is strong enough for foreign investment.
The country is in the midst of an ambitious programme of infrastructure development. Investment opportunities in Namibia could take the form of public-private partnerships or equity holdings. The most prominent areas of interest are power generation, transmission and logistics. There are opportunities in both construction and maintenance of rail and road infrastructures and also affordable housing. When investing in Namibia be sure to look for a reputable investment bank. The government is seeking partners to help realise its ambitious goals.
The country is rich in natural resources that can boost investors' returns. Investments in the mining sector are being made by large Chinese companies and South African banks and diamond companies. Spain and Russia have made significant investments in the fishing sector. Other foreign countries have expressed an interest for exploration of Namibia's oil waters. Opportunities for FDI include manufacturing logistics, and mining. If you're looking to maximize your investment, Namibia is a great location to begin.
Challenges
In Namibia the startup ecosystem has not been able to connect entrepreneurs to the right investors. Entrepreneurs are often attracted by poor investors that can cause more harm than good. The ideal investor should provide access to money, time, and access to start-ups. New investors will have limited access to the appropriate connections and have no information about market conditions. Namibian investors need to be cautious when deciding which projects to fund.
The investment climate in Namibia has improved dramatically in recent years, but the country still faces significant obstacles. The country has low domestic market, a sluggish workforce of skilled workers, and high transport costs. Despite these difficulties the country is undergoing an expansion of its vaccination program, which is expected to ease production bottlenecks as well as reopen the tourism sector. The government has set a high priority on attracting foreign investment, combating the rate of unemployment, and diversifying the economy.
There are numerous opportunities for FDI in Namibia. Numerous large Chinese companies have made significant investments in Namibia's uranium mining industry. Canada and South Africa are also significant investors in Namibia with significant holdings in mining and banking. The Office of the President is working to develop renewable energy sources. Mining and tourism are both highly desired sectors. These are the mainstays of the country's economic activity. The general trend is for commodity prices to rise over the next years, which will enable more companies access private equity.
Government support
The Namibian government is working to eliminate administrative obstacles that might make it difficult to conduct business. The Investment Promotion Act is currently being revised. The new legislation is likely to replace the previous Foreign Investment Act. While this new law is aimed at attracting foreign investment, those looking to fund projects in Namibia must be aware of its nuances. For instance the business owner might not have access to information on a project, such as the financial position of the owner.
The Registrar of Companies is responsible for managing companies and regulating the business formation in Namibia. While registration is required investors are urged to seek out assistance from the Namibia Investment Centre. The Namibia Investment Centre offers services for investors, beginning with the initial inquiry phase and to operations. It also provides information on incentives, projects, as well as procedures. The investment center streamlines processes and collaborates with regulatory and government agencies. This helps investors focus on projects that benefit the country.
While Namibia's private sector is heavily dependent upon bank financing however, the banking sector is quite weak in terms of funding new businesses. Most commercial banks in Namibia employ conventional lending methods. This requires that start-up businesses provide collateral to secure the loan. Unsecured lending is not permitted and bank loans are typically risky. Additionally, the government's support for investors seeking projects to fund in Namibia is insufficient.
Financial institutions
You're not the only one looking for the perfect project in Namibia. The Namibian government and various financial institutions want to aid economic development and private sector development. The Development Bank of Namibia (DBN), convened a recent stakeholder panel that revealed that Namibia requires more than company funding options grants funding. Public-private financing is vital to increase productivity, modernise customs and provide access to information for free. The panel concluded, among other things, that transparency and good corporate governance are essential.
There are many types of investors in Namibia. The Development Bank of Namibia (or Start-Up Namibia) are two examples of public funders. This initiative promotes the startup community in Namibia. These funders are more diverse and can be focused on grants or concessionary loans instead of equity investments. These funders might be an ideal fit if you have a large social impact and are in the beginning stages of your business. But, it is important to be aware that government funds can impose limitations on how companies operate.
While Namibia has not yet implemented a privatization program, discussions have begun to privatize state-owned enterprises. For instance the Government Institutions Pension Fund has pledged 340 million dollars to private equity funds over the past decade. It has the mandate to fund infrastructure as well as small and medium-sized company development, as well as large municipal services. Recently, the government announced plans to sell part of its stake in Air Namibia, the state-owned airline. The proceeds of the sale will go towards reducing government debt.
Taxes
Although Namibia does not have an exclusive tax system for foreigners, Namibia has a number of tax-friendly features that may be appealing to investors. For instance, foreign-owned companies can't avoid paying dividend taxes in Namibia which is a ten percent tax on dividends that are sourced in Namibia. There is no tax on securities in Namibia. However, investors should be aware that certain capital gains can be taxed as normal income. Third, Namibia is a member the Common Monetary Area and its dollar is based on the South African rand. Furthermore, certain sectors require a certain percentage of local ownership for projects they fund.
Additionally, Namibia's financial environment is relatively stable and transparent. Namibia is a member of the Common Monetary Area (a group of southern African nations). Therefore, the remittances of foreign currency to Namibia have been less than one-fifth of Namibia's GDP in the past decade, according to World Bank Development Indicators. The majority of Namibian remittances get handled by commercial banks. The BON has not changed its investment policies on remittances in the last few years.
Economic empowerment
This article can help investors in their search for projects to finance in Namibia. The government of Namibia owns a vast range of enterprises. These are called parastatals and account for over 40 percent of GDP. They are generally unprofitable, but they receive subsidies from the government. Foreign investors are part of joint ventures, but this has limited their growth.
The government is generally transparent when it comes to public policy. It releases its annual budget, its mid-term reviews and consults with interested parties when the budget is being prepared. It also publishes its debt position as well as contingent. The fiscal framework of Namibia is generally free of corruption. Furthermore, the Namibian government does not enforce forced localization requirements. Government policies aim to encourage local content and encouraging local ownership of state-owned enterprises.
The country's government is trying to boost its financial market and attract more foreign capital. The SDG Investment Fair brings together investors from different sectors to invest in sustainable development projects in developing countries. Namibia is represented by its Hydrogen Commissioner and Economic Advisor to the President. Both countries are members of the Common Monetary Area. This agreement allows for capital flows between the two countries. Investors from all over the world can attend the event and look at the opportunities available to invest in the country.
Sector of water
In Namibia, the water sector has received around 25 percent of the budget of the country. To achieve this the Government of Namibia has set up a Namibia Water Sector Support Program to draw foreign investors. This program is designed to improve the water infrastructure and supply water to the nation. The government is currently seeking international investors and private sector companies to fund the program. The government has received a grant from the African Development Bank Group.
There are numerous opportunities for investment in Namibia's sector. EOS Capital is one such firm. It recently announced that it had raised 90 million Namibian dollars in its initial Euphrates Agri Fund funding round. Cherry Irrigation Namibia was the fund's first investment. The firm plans to invest further in the country's water infrastructure as well as in the agricultural sector.
Green bonds are a viable alternative to traditional bank lending , and there is a large market in Namibia. AFD has developed a Namibian green finance label, which encourages local commercial banks to increase their green lending. The Bank Windhoek is currently working to build a pipeline of green financing projects and is looking into a second issue. A Green Bond works in a similar manner 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 as well as the documents indentures.