Return to: Index of "1996 Country Commercial Guides" ||
Index of "Economic and Business Issues" ||
Electronic Research Collections Index ||
U.S. Department of State
Namibia Country Commercial Guide
Office of the Coordinator for Business Affairs
COUNTRY COMMERCIAL GUIDE
American Embassy Windhoek
Table of Contents
I. Executive Summary.................................
II. Economic Trends and Outlook.......................
III. Political Environment.............................
IV. Marketing U.S. Products and Services..............
V. Leading Sectors for U.S. Exports and Investment...
VI. Trade Regulations and Standards...................
VII. Investment Climate...............................
VIII. Trade and Project Financing......................
IX. Business Travel..................................
Appendix A: Country Data................................
Appendix B: Domestic Economy............................
Appendix C: Trade.......................................
Appendix D: Namibia Contact Points......................
Appendix E: Trade Event Schedule........................
I. Executive Summary
Namibia, a sparsely populated market-oriented democracy on the
southwestern coast of Africa, is one of the newest nations on the
continent. Since gaining independence from South African rule in March
1990, Namibia has been a model of peaceful political transition. The
Namibian economy is most notably characterized by its dual nature: a
modern market sector which produces most of the country's wealth,
contrasted by a traditional subsistence sector that supports the
majority of the population. Agriculture and herding are the occupations
of most Namibians, but the country also enjoys a small skilled work
force and a well-trained professional class. The economic policies
pursued by the current government are aimed at alleviating the effects
of apartheid, including the unequal income distribution and lack of
opportunities that afflict most indigenous Namibians.
Despite the small population, limited internal market and lack of
historical trading ties outside of South Africa, there is ample
opportunity for Namibia to become a gateway for business looking to
enter the Southern African regional market. The new government's
history of fiscal discipline and pursuit of a free market economy,
coupled with the fine infrastructure and the accessible port of Walvis
Bay (site of a nascent Export Processing Zone), make Namibia a prime
candidate for investment and future growth. Job creation is among the
highest of priorities for the Namibian government. Bringing previously
disadvantaged Namibians into the economic mainstream through private
sector (commercial) development has led the Government to actively seek
foreign investment and maintain a positive partnership with the private
Namibia has significant resources that can provide solid economic
growth. The country has also adopted tight macroeconomic and fiscal
policies up to now, and has earned a respected international credit
rating. The mining, fishing, tourism, and manufacturing sectors of the
economy offer the best prospects for development and expansion. Namibia
is looking to diversify its economy away from diamonds and uranium, the
major export commodities, and away from reliance upon South Africa,
which provides 85 percent of all the imported goods sold in Namibia.
The Government is looking to expand the labor-intensive manufacturing
sector in order to boost employment figures and GDP. The country also
intends to capitalize on the natural beauty and rich diversity that is
Namibia through development of the tourism sector. The fine climate,
superior infrastructure, favorable location, and stable government make
Namibia a prime candidate for international banking, health care, and
U.S trade with Namibia has been seriously handicapped by the Southern
African Customs Union's (SACU) exclusionary trading practices, which
impose tariffs as high as 110 percent on high-value consumer goods that
U.S. manufacturers have the comparative advantage in producing. Most of
the American products purchased in Namibia are exported from the States
to South Africa, and then re-exported to Namibia by South African
distributors. As SACU is re-negotiated and members are required to meet
GATT-mandated regulations, U.S. manufacturers will find the Southern
African market open up considerably. Despite the expense, Namibians
hold high regard for the quality and technology offered by U.S. goods
and services. U.S. business is courted by a trade-friendly, investment-
needy government, but sometimes faces difficulties from the well-
connected, long-time suppliers of competing goods. Main imports into
Namibia include foodstuffs, chemicals, textiles, vehicles, machinery,
transport equipment, electronic goods, and petroleum products. Namibia
exports diamonds, uranium, copper and other base metals, seafood,
handicrafts, beef and other agricultural products, semi-precious stones,
marble, and granite. There are opportunities for both countries to
increase bilateral trade and investment, and develop even further the
positive relations that already exist.
II. Economic Trends and Outlook
Since independence in 1990, the Namibian government has been focusing on
increasing economic stability in the region. The government realizes
that macroeconomic stability is essential for economic growth. As seen
in recent fiscal year budgets, the government continues to produce well-
crafted blueprints which embody prudent fiscal discipline.
The economy of Namibia grew strongly at 5.4 percent during 1994 after
decrease of real GDP during 1993 amounting to 3.3 percent. The economy
is expected to grow at an average rate of 4 percent. In 1994, Namibia
had a current account surplus of $207 million and a capital account
deficit of $122 million. The current account has consistently
maintained a surplus from the healthy demand for Namibian exports,
specifically diamonds. However, consumer price inflation accelerated in
1994 to almost 11 percent compared to 8.5 percent in 1993, due primarily
to a stronger inflationary drift in South Africa and the depreciation of
Currently, Namibia has a mixed economy consisting of privately and
publicly-owned enterprises. Although most business enterprises in
Namibia are privately owned, direct state involvement in the economy
takes the form of parastatals. These parastatals are mostly in the
postal services, telecommunications, development banking, electricity
and water supply, and transport, in addition to agricultural commodity
marketing boards. However, the government is actively promoting private
sector activities in lieu of parastatals in order to create employment.
Namibia is an open economy with export earnings exceeding 50 percent of
GDP. Imports are similarly high. The government is strongly
encouraging increasing trade in many sectors of Namibia's economy.
Currently, the economy is highly integrated with the Republic of South
Africa as most of Namibia's imports originate there. The relationship
with South Africa is seen through the membership of regional economic
groups. For example, Namibia belongs to the Southern African Customs
Union (SACU) with South Africa, Botswana, Lesotho, and Swaziland. These
countries share a common external trade tariff and goods are allowed to
flow across borders unimpeded by tariffs or other restrictions. In
addition, the Namibian currency, the Namibia Dollar, successfully
introduced in September 1993, is pegged on par with the South African
Rand. Therefore, prices of goods in Namibia will continue to be heavily
influenced by prices in South Africa. The heavy dependence on South
Africa is beginning to change as Namibia seeks to diversify its
Five prominent sectors in Namibia (mining and energy, manufacturing,
fishing, agriculture, and tourism) hold promise for economic growth.
The mining industry is the principal source of income for Namibia
comprising approximately 20 percent of the country's total GDP. Namibia
is a major producer of uranium, pyrites, cadmium, arsenic, silver and
fluorspar. Gem-quality diamonds are the country's largest generator of
foreign exchange, accounting for nearly one-third of export revenues.
The diamond industry was previously monopolized by De Beers. However,
in November 1994, President Nujoma signed an agreement with De Beers
which gives the state a 50 percent stake in the new Namibian company,
NAMDEB. The Government of Namibia is encouraging investment in the
mining sector to diversify products and maintain mining as the backbone
of the economy.
Although diamonds continue to be Namibia's leading source of export
earnings, there is a small but growing manufacturing export sector.
Excluding fish processing, the contribution of the manufacturing sector
to the total GDP was about 5 percent in 1993. Including fish processing
this percentage rises to 9.2 percent. Because the manufacturing sector
plays a minor role in the economy, there is a strong effort to enhance
this industry in order to increase value-added products in the region
for export. However, Namibian manufacturing is inhibited by a small
domestic market, dependence on imported goods, and a limited supply of
local capital. A small skilled labor force, high labor costs and
subsidized competition from South Africa add to the difficulties.
Scarce supplies of energy and water are also constraints to large-scale
manufacturing in Namibia. Presently, the primary industrial activity in
the country (excluding mining) is in food (meat and fish) processing.
Other light industries include brewing, plastic products, furniture,
textiles and apparel, steel fabrication, and small crafts.
Commercial fishing and fish processing is quickly becoming the fastest-
growing sector of the Namibian economy in terms of employment, export
earnings, and contribution to GDP. White fish, especially hake, is
Namibia's richest marine resource. Main species include pilchards
(sardines), anchovies, red herring and horse mackerel. There are also
stocks of rock crab, lobster, squid, tuna, mussels, oyster and lantern
fish. The fishing industry suffered a decline in its resources in pre-
independence Namibia due to severe over fishing. The government is now
pursuing a conservative resource management policy along with an
aggressive fisheries enforcement campaign to insure the sustainable
viability of this important sector.
The agricultural sector contributes only 8.5 percent to Namibia's
monetized GDP; however, around 70 percent of Namibians rely on it for
their livelihood. Agriculture consists primarily of livestock ranching.
Cattle raising is predominant in the central and northern regions, while
karakul sheep, goat, and ostrich farming are concentrated in the more
arid, southern regions. The ostrich industry is one of the fastest
growing agricultural sectors in Namibia. Subsistence farming is
confined chiefly to the so-called "communal lands" of the country's
populous north, where roaming cattle herds are prevalent and the main
crops are mahango (millet), sorghum, corn, and peanuts. The Namibian
government would like to increase local processing, particularly of
livestock, to diversify crop production and to narrow the gap between
commercial and subsistence farming.
The tourism industry is small, presently accounting for 7 percent of the
total GDP. However, it is expected to grow substantially. Promotion of
the tourism industry is a major focus of the government, and development
of 4-star hotels with gambling casinos and upscale tourist facilities
has proceeded apace over the past year . With its spectacular deserts,
canyons, and mountains, along with a wide array of flora and fauna,
Namibia is known as "Africa's Gem". Namibia is home to the world's
oldest desert, the Namib, which extends along the coast from Angola to
South Africa. The country boasts a wide variety of game, much of which
ranges in conservation areas such as the world-renowned Etosha National
Park, Skeleton Coast Park, and the Namib-Naukluft Park. Namibia also
has the world's highest sand dunes at Sossusvlei, as well as the Fish
River Canyon, Africa's "Grand Canyon". The Ministry of Environment and
Tourism is keen on developing eco-tourism. In February 1994, the
government unveiled its "White Paper" on tourism which elaborates a
strategy for development of this sector. In May 1995, Namibia became
the first African country to host the Miss Universe pageant, which
presented Namibia an opportunity to showcase its tourism potential.
Namibia has an impressive infrastructure conducive to foreign
investment. The road system is highly developed and well maintained,
with most of the major roads paved. Construction is currently underway
on a Trans-Kalahari Highway which will link Namibia and Botswana. In
the north-east, the all weather Trans-Caprivi Highway will link Namibia
to south-east Angola, Zambia, Zimbabwe, and northern Botswana. Namibia
also has a small rail system, a superb international airport in
Windhoek, and several smaller airports capable of handling large
aircraft. Furthermore, Namibia is in the process of procuring state-of-
the-art technology to modernize its already impressive communications
infrastructure, including the erection of new satellite earth stations
which will link Namibia with the world. The well-developed
infrastructure in Namibia is a unique asset to the foreign investor
interested in the Southern Africa region.
III. Political Environment
Namibia gained its independence from South Africa on March 21, 1990, and
recovered Walvis Bay in March 1994. Independence marked a decisive break
with the past, as Namibia has established itself as a multiparty,
nonracial democracy. The Constitution contains an entrenched Bill of
Rights, providing for freedom of speech, press, assembly, association,
and religion. It also establishes a bicameral Westminster-style
parliament with a strong executive, an independent judiciary, and
effective separation of powers.
General elections for the National Assembly (the first house of
Parliament) and the President are held every five years. In the
December 1994 general elections, President Sam Nujoma was elected to a
second 5-year term of office, and the ruling SWAPO party won 53 of the
72 elected National Assembly seats. Elections were also held in late
1992 to choose members of the 13 Regional Councils, as well as new
municipal officials. Two members from each Regional Council serve
simultaneously as members of the National Council, the country's second
house of Parliament. These elections take place every 6 years.
Namibia's political spectrum is made up of several different groups,
ranging from traditional groupings based on tribal authority to modern
political parties. The South West Africa People's Organization (SWAPO)
is the ruling party, and has been since Independence. Formerly Marxist-
oriented, SWAPO now champions a multiparty democracy, a mixed economy,
and national reconciliation. The Democratic Turnhalle Alliance (DTA),
Namibia's chief opposition party, governed Namibia under Pretoria's
supervision for the decade prior to Independence. Other political
parties represented in the Parliament are the United Democratic Front
(UDF); the Democratic Coalition of Namibia (DCN), newly formed before
the December 1994 elections; and the Monitor Action Group (MAG), a
conservative party with support from portions of the small white
community. Parliamentary debate is open and lively.
Because of their shared democratic and free market values, Namibia and
the United States have enjoyed warm bilateral relations. The United
States was instrumental in helping Namibia gain independence, and
continues to work with Namibia to foster democratic principles. The
U.S. Embassy in Windhoek was established shortly after independence.
Currently, the United States and Namibia are working together to
increase the human resource capacity of previously-disadvantaged
Namibians, to promote small private enterprise development, and to
improve the education system. Encouraging local entrepreneurs and
increasing employment opportunities for Namibians are the stated
government policies that most affect the business climate.
IV. Marketing U.S. Products and Services
While the appeal of American products and services is slowly growing in
Namibia, marketing here requires special efforts. For example,
Namibia's historical isolation has left it ill-prepared to provide the
customer service required to cater to the type of foreign tourist
Namibia wishes to attract. The expertise of the United States' service
industry would be of great benefit to Namibian entrepreneurs seeking to
capitalize on the increased volume of tourists to the country.
Additionally, South African and German-linked concerns dominate the
marketing and distribution networks in Namibia, as well as many of the
product-line markets. This fact, coupled with the high cost of imports
from outside the Southern African Customs Union (SACU), creates a
distinct disadvantage to U.S. producers who compete against goods made
by countries within the union. Therefore, joint-venture opportunities
may be the best vehicle for increasing U.S. products and services in
Namibia. The government's push to bring more indigenous business people
into the mainstream, including various incentive packages, are an added
benefit to U.S. companies interested in the Southern Africa market.
The Namibian Development Corporation (NDC), as well as Namibian National
Chamber of Commerce and Industry (NNCCI) and its affiliated chambers,
offer services to foreign investors in need of agents, distributors, and
Business in Namibia may be conducted in the form of a public or private
company, branch of a foreign company, partnership, joint venture, or
sole trader. Companies are regulated in Namibia under the Companies
Act. The Act covers both domestic companies, as well as those
incorporated outside Namibia but trading through a local branch.
Both public and private companies are required to obtain from the
Registrar of Companies approval for the name of the company before
incorporation. A branch of a foreign company must register within 21
days of establishing a business in Namibia. There are no specific
registration requirements for Partnerships and Sole Traders. All
businesses must obtain the appropriate trading license from the local
municipality. In addition, businesses must also register with:
--The Workmen's Compensation Commissioner with regard to the government
operated workmen's compensation insurance scheme;
--The appropriate Industrial Council governing the pertinent trade or
--The Ministry of Finance with regard to finance; and
--The Receiver of Revenue as an employer.
An external company must maintain statutory records in Namibia which are
necessary to fairly present its state of affairs and business in
Namibia. Registered offices and business records must be maintained;
Namibian accountants and auditors must be appointed and engaged; and
adherence to laws of taxation and labor is required.
Namibia is endowed with well-trained and experienced professional people
in various fields. However, the government realizes that there are
sectors of the economy in which there is a shortage of skilled labor.
Therefore, work permits for expatriates may be obtained in the bona fide
absence of suitable qualified or experienced local candidates.
Sales of goods and services to the Government of Namibia are usually
conducted by means of a fair tender/bidding process. Most Namibian
government tenders are of quantities and commodities that would not
interest the standard U.S. supplier, but there are notable exceptions
that are reported to the Department of Commerce's National Trade Data
Bank for distribution.
Like South Africa, Namibia's legal system is based on Roman-Dutch law.
This system differs from the common law system in the United States.
The American Embassy in Windhoek can provide information on which local
attorneys have expertise in trade and investment matters. The
establishment of a company in Namibia must be done through an attorney.
Beyond that, there is no particular need to obtain legal services. In
cases of intellectual property protection, disputes can be handled by a
V. Leading Sectors for U.S. Exports and Investment
Due to Namibia's small internal market, opportunities for import-
substitution investment are limited. The prospects for U.S. trade and
investment are thus not solely for the Namibian market. Therefore,
Namibia should be viewed as a gateway into the rest of the Southern
Africa region. With its excellent physical and managerial
infrastructure, Namibia can provide a platform for servicing markets in
Central and Southern Africa. Moreover, Namibia's stable political
climate, positive and open attitude to foreign investment, and the port
of Walvis Bay are all valued assets to a potential U.S. exporter or
Best Trade and Investment Opportunities for Non-Agricultural Goods and
There is opportunity for U.S. products and services in those products
that are either not available within SACU or in products and services in
which the U.S. has a comparative advantage, thus offering high quality
products at lower costs.
--Low-cost housing: Affordable low-cost housing is needed in various
regions throughout Namibia including low-cost building materials
suitable for sunny, arid climates.
--Oil and gas exploration: Namibia still has large unexplored areas
with offshore blocks seeming to hold the greatest promise. The country
has issued several oil and gas licenses, and is seeking interested
bidders in a second licensing round through 1995.
--Tourism services and products: The tourism sector, specifically eco-
tourism, holds promise for U.S. service industries. As establishments
bordering state-owned national parks become commercialized, there is
considerable potential for the building of accommodation facilities and
various tourism services. There will also be potential for U.S. exports
of camping equipment or products geared toward eco-tourism.
--Value-added manufacturing: In the manufacturing sector, the country's
goal is to increase value-added products (e.g. mineral processing).
This is also an area where American equipment (either new or previously
owned) could be sold for manufacturing purposes.
--Telecommunications equipment: Namibia has a fairly well structured
telecommunications system. However, updated equipment will be needed as
Namibia moves forward in development of this sector.
--Water and energy technology: The availability of water is a great
concern in this dry desert climate. The recent drought situation has
also added an urgent need for water facilities. In addition, the
government and the private sector are constantly looking for alternative
energy sources (e.g. solar energy). There is a possibility of U.S.
technology transfer through technical assistance, engineering, and
consulting services in these sectors. Desalinization projects would
certainly be a "best prospect" in arid Namibia.
Best Trade and Investment Opportunities for Agricultural Goods and
Namibia's dry climate and generally soil-poor topography does not lend
itself to high yield food production. Instances of drought only
exacerbate the problem and increase the need to import foodstuffs. The
United States has recently sold corn and wheat to Namibia, but South
Africa has long been Namibia's source for most agricultural products
outside of grains and meat. Becoming more self-sufficient
agriculturally is a high priority of the government, and much of that
technology and know-how can be gained from the United States.
--Used agricultural equipment: Reliable agricultural equipment will be
fundamental as Namibia strives to increase production for subsistence
use and for agribusiness opportunities.
--Agricultural chemicals: Chemicals applied to agricultural uses or for
clearing of range bush may be an area of potential sales for U.S.
producers, provided such chemicals are environmentally safe.
--Agricultural processing: Investment opportunities are available in
leather and tallow products such as glue and gelatin, processing of
pelts and wool of the karakul sheep, millet milling, meat and dairy
processing, and fruit and vegetable processing including canning,
blanching and freezing various products.
--Fish processing: There is a dire need for investment in onshore
processing and modernization of existing facilities. There are also
opportunities in the fishing support industries such as marketing,
canning and packaging materials, ingredients for fish processing, plant
and equipment, vessel servicing, cold storage, transport services,
surveillance and inspection.
--Consumer-ready food products: Most of the food products in Namibia
are imported from South Africa. As previously stated, Namibia would
like to diversify its food sources away from South Africa. There is a
potential market for U.S. packaged food products.
--The Government of the United States acknowledges the contribution that
outward foreign direct investment contributes to the U.S. economy. U.S.
foreign direct investment is increasingly viewed as a complement or even
a necessary component of trade. For example, roughly 60 percent of U.S.
exports are sold by American firms that have operations abroad.
Recognizing the benefits that U.S. outward investment brings to the U.S.
economy, the Government of the United States undertakes initiatives,
such as the Overseas Private Investment Corporation (OPIC) programs,
investment treaty negotiations and business facilitation programs, that
support U.S. investors.
VI. Trade Regulations and Standards
Namibia is an advocate of regional economic integration. Namibia
belongs to the Southern African Development Community (SADC). SADC was
established as a vehicle for closer regional integration and balanced
regional development. The organization, composed of eleven member
states, has been successful in forging a regional identity. These
eleven countries, together, make up nearly a quarter of the African land
mass, and have a combined population of nearly 150 million. As
previously stated, Namibia is also a member of the Southern African
Customs Union. SACU, reformulated in 1969, provides a basis for
dividing customs and excise revenue and the establishment of a Customs
Union Commission for consulting among member states. Within SACU no
tariffs exist on goods produced in and moving among the member states.
Most imports from outside the Customs Union are subject to tariff rates.
U.S. exporters face a high external tariff comprising a basic customs
duty as well as a scaled tax in the case of luxury items which can be as
high as 110 percent. The Republic of South Africa administers the SACU,
levying and collecting customs and excise duties for all members. An
allocation of these revenues is distributed to the members based on an
agreed formula. SACU provides the largest single source of revenue for
the Government of Namibia. Namibia is an advocate of free market and
free trade; however, membership in the SACU places Namibia in a
dilemma. Because SACU comprises 30 percent of government revenues, any
modification to the current customs arrangements will require the taxes
or other charges on the domestic economy to replace the lost revenues.
However, GATT has put pressure on SACU to reduce tariffs and other
barriers to trade. Moreover, adjustments to the tariff structure should
occur as both Namibia and South Africa are signatories to GATT and will
be required to meet agreements and undertakings mandated by the World
Challenges to U.S. - Namibian Trade
Distance, a small market size and a lack of historical trading ties
between the United States and Namibia have contributed to the relatively
low level of trade between the two nations. Moreover, the Namibian
economy is still highly dependent on South Africa for much of its
manufactured goods. Historical links, as well as SACU regulations, have
also given South African companies an edge here. Despite the "Buy
Namibian" campaign started here by local manufacturers, South African
products dominate the shelves at most Namibian retail outlets.
Furthermore, there is no direct shipping service from the United States
to Walvis Bay, Namibia's main port of entry. All ocean shipments must
first transfer to coastal freighters and ultimate delivery to Walvis Bay
from Cape Town or Durban. This additional cost, money, and time places
U.S. exporters at a disadvantage. With EPZ continued development,
Walvis Bay could soon handle direct shipping access from Europe and/or
the United States.
Another impediment to trade for the U.S. exporter is the Letter of
Credit which is required by U.S. exporters selling into Namibia.
However, Namibian trade with the Republic of South Africa is usually
conducted on an open accounting basis. Therefore, the cost of Letters
of Credit and utilization of bank lines of credit puts U.S. exporters at
A General Sales Tax of 8 percent is levied at the point of final sale.
This tax, similar to a Value Added Tax (VAT), is also applied to
products imported through the SACU. The Additional Sales Tax Duty Act
of 1993 provides for the imposition of an additional sales duty at
prescribed rates on the dutiable value of goods imported into Namibia.
Export controls are maintained on exotic and indigenous live animals
(e.g. ostriches) but not on general manufactured products. The
regulations of the South African Bureau of Standards are still followed
by Namibia for labeling requirements and other manufacturing standards.
Free Trade Zones
There are no free trade zones in Namibia.
Membership in Free Trade Arrangements
The reality of economic interdependence in the Southern African region
has led Namibia to seek regional cooperation on a variety of issues,
especially trade. As previously mentioned, Namibia is a member of SACU,
SADC, and the CMA. In addition, Namibia maintains membership in the
Preferential Trade Area for Eastern and Southern Africa (PTA) and the
Common Market for Eastern and Southern Africa (COMESA).
Namibia has also become a full and active member of the larger
international community. Prior to independence, Namibia's trade
relations were almost exclusively with the Republic of South Africa.
Namibia is highly interested in expanding its trading partners. Since
Independence, Namibia has signed bilateral trade agreements with twenty-
one major trading nations around the world.
At present, Namibia is a member of the United Nations, the World Bank,
the International Monetary Fund, the International Labor Organization,
the Food and Agriculture Organization, and the General Agreement on
Tariffs and Trade/ World Trade Organization.
VII. Investment Climate
Openness to Foreign Investment
Namibia's stability along with its superb infrastructure and sound
regulatory policies promote a fine investment climate of which foreign
entities are encouraged to take advantage. The primary focus of the
government is to create jobs for this newly independent nation. The
country welcomes foreign investment as it sees the private sector as the
most efficient provider of employment. In this regard, the government
has taken a number of positive steps to establish a system and
environment conducive to foreign investment. In order to stimulate
investment into the region, Namibia established a liberal Foreign
Investment Act in 1990.
The Foreign Investment Act was written with the assistance of the United
Nations Commission on Transnational Corporations to develop a framework
for foreign companies setting up business in Namibia. The Act was
passed in December 1990 without amendment. It provides for the
establishment of an Investment Center within the Ministry of Trade and
Industry to assist in the administration of the Act. The Act guarantees
foreign investors equal treatment with Namibian firms, fair compensation
in the event of expropriation, international arbitration of disputes
between the investors and the government, and the right to remit profits
and access to foreign exchange. Investment incentives are also
available in the manufacturing area. Moreover, the government has
implemented special tax incentives for manufacturing enterprises such as
an exemption on 80 percent of profits accruing to exports of
manufactured goods (except fish and meat processing).
Export Processing Zones
The government has been encouraging overseas investment through the
establishment of export processing zones (EPZs). While the Foreign
Investment Act is not applicable in the EPZs, special incentives for
investment exist in these zones. The port of Walvis Bay has been
designated as Namibia's first, full-scale export processing zone. (An
earlier and smaller EPZ at Arandis has not lived up to initial
expectations.) The Walvis Bay zone, which became operational in mid-
1995, is geared toward promoting export-driven growth by attracting
companies which serve not only the local market but also the whole of
Southern Africa, Europe and the Americas. EPZ incentives for investors
--exemption from customs, import and export duties and any tax on
equipment and goods;
--exemption from income, profit and sales taxes; and
--no tax on corporate profit.
The government is looking into future sites for EPZs in Namibia.
The Namibian Constitution allows for the formation of independent trade
unions to protect workers' rights and to promote sound labor relations
and fair employment practices. The Labor Act of 1992 provides for trade
unions and employee organizations. Most workers are represented by a
trade union. The Labor Act established a Labor Advisory Council, Labor
Court, District Labor Court, and Wage Commission. At present, business
operating within the Export Processing Zone are not required to adhere
to the Labor Act, but are required to follow fair labor practices
outlined by the government and the management of the Offshore
Development Company which manages the Walvis Bay EPZ. However, this is
still a source of controversy between government and the labor unions.
The National Union of Namibian Workers (NUNW) is the largest labor
federation in the country. The NUNW, an affiliate of the ruling SWAPO
party, represents workers organized into seven affiliated trade unions.
Wage rates of U.S. $200 per month or more for a 45 hour work week are
common. Other issues such as overtime payments plus annual and
maternity leave are also standard and should be considered by investors.
While there is a large pool of qualified workers in varying professions
in Namibia, a shortage of a highly skilled labor force does exist in the
country. The Namibian labor problem is a legacy of apartheid. A large
number of Namibians seeking jobs in the formal sector are held back due
to a lack of necessary skills or training. Consequently, the government
is pursuing a comprehensive educational reform program to overcome this
constraint. The government also offers special tax deductions of up to
25 percent to manufacturing concerns that provide technical training to
A foreign investor is free to set up any kind of business activity and
will be subject to the same taxation and regulations as a Namibian
company with one exception. Where rights are granted to the company for
the exploration of natural resources, the government is entitled to take
a stake in the exploitation of those rights. The government can also
choose to allocate rights to Namibian companies on more favorable terms.
For example, given the government's concerted efforts to "Namibianize"
the fishing industry, joint ventures with Namibian concession holders
may be the most expeditious manner in which to invest directly in the
fishing sector. The marginal corporate tax rate in Namibia is currently
Under the Foreign Investment Act, the Bank of Namibia is obligated to
sell foreign exchange to foreign investors with Certificates of Status
to make payment transfers relating to foreign loans, license fees,
royalties, profits, dividends, investment sale proceeds, and capital
reductions. Non-status investors are subject to potential exchange
controls under South African regulations applicable to the Common
Monetary Area. In practice, there is no rationing of foreign exchange
and investors do not experience delays in repatriating profits and
dividends. In general, the Namibian banking system is modern and
efficient, and local commercial banks are fully capable of handling
international financial transactions and trade financing with ease.
Expropriation and Compensation and Dispute Settlement
The Foreign Investment Act protects the investor from expropriation. It
also guarantees settlement of any disputes by international arbitration.
The local court system provides an effective means to enforce property
and contractual rights.
Namibia imposes no performance requirements on foreign investors. In
certain industries, local content requirements must be met in order to
exempt final products from duties under the Southern African Customs
Union. The government reserves the right to take an equity position in
mineral sector ventures.
Right to Private Ownership and Establishment
Parliament has the constitutional power to limit the property rights of
foreigners, but no such legislation is contemplated and the Foreign
Investment Act guarantees effective national treatment. In practice,
there are no restrictions on the establishment of private businesses.
However, under the commercial agricultural land reform legislation
enacted in 1994, there are certain restrictions concerning the foreign
ownership of farmland.
Protection of Property Rights
The independent, transparent Namibian legal system protects and
facilitates acquisition and disposition of property rights.
Registration of patents, trademarks and designs is administered by the
Registrar of Companies, Patents and Trademarks in Windhoek in terms of
the applicable South African laws. These comprise the Trademarks Act of
1963, the Designs Act of 1967 and the Patents Act of 1978 whose
provisions are generally in line with international norms. This issue
of intellectual property is understood by most companies operating in
Namibia, but it is a new area for the government and has not yet reached
Foreign investment is encouraged through the adoption of investment and
employment codes by parliament. Foreign investment is regulated through
the Foreign Investment Act. Labor regulations are equally applicable to
all employers, local and foreign, except as noted in the Export
Capital Markets and Portfolio Investment
There is a free flow of financial resources within Namibia and
throughout the Common Monetary Area. Capital flows with the rest of the
world are relatively free, subject to South African exchange controls.
The Ministry of Finance registers portfolio managers and supervises
actions of the Namibian Stock Exchange through the Director of Financial
The Namibian Stock Exchange (NSE) was opened in September 1992 and
currently lists nearly 20 companies. The NSE continues to grow, and
provides an alternative means of raising cash to Namibian companies.
The Government hopes to attract the kind of mutual funds and foreign
portfolio investors that have energized emerging stock markets elsewhere
in the developing world, and has introduced incentives such as no
marginal securities tax, and no income tax on dividends paid from after-
tax profits. The NSE is the second largest African stock market in the
total value of shares listed.
Political violence in Namibia is virtually non-existent. Namibia enjoys
a very stable political system under a multi-party democratic
constitution. Thus, political risk in the country is minimal. However,
political uncertainty in South Africa can highly affect the exchange
rate in Namibia as the Namibian Dollar is pegged to the South African
Bilateral Investment Agreements
Although the government has expressed an interest in a bilateral
investment agreement with the United States, currently there is no
bilateral investment agreement.
Investment Insurance Programs
The Overseas Private Investment Corporation (OPIC) will provide
political risk insurance to qualified U.S. investors in Namibia.
Namibia is also a member of the Multilateral Investment Guarantee Agency
Foreign Trade Zones
Foreign firms will enjoy the same investment opportunities as Namibian
companies. There are currently no free ports in Namibia.
Capital Outflow Policy
No restrictions exist regarding capital outflows.
Foreign Direct Investment Statistics
Namibia currently does not maintain statistics on volume or direction of
VIII. Trade and Project Financing
A Namibian central bank was established under the Bank of Namibia Act of
1990. The Bank of Namibia is the issuer of bank notes and coins, the
foreign exchange authority, lender of last resort, banker to the
Government and the commercial banks and the supervisory authority on
financial institutions and monetary matters. The central bank has
formal authority over Namibia's foreign exchange dealings.
Namibia forms part of the Common Monetary Area (CMA), which is an
exchange control territory comprising Lesotho, Namibia, South Africa,
and Swaziland. The currency, the Namibia Dollar, is freely convertible
and pegged to the South African Rand at par. Exchange control is
administered by the Bank of Namibia. Under the CMA Agreement, the rand
is also legal tender in Namibia. In its relations with countries
outside the CMA, Namibia applies exchange controls that are the same as
those of South Africa.
The commercial banks in Namibia include Bank Windhoek Ltd., City Savings
and Investment Bank, The Commercial Bank of Namibia Ltd, First National
Bank of Namibia, and Standard Bank Namibia Ltd. These banks provide
comprehensive domestic and international banking services. City Savings
and Investment Bank was the first indigenous bank to offer merchant and
investment banking services. Project financing is available in
agricultural products, commercial fishing, tourism, housing, and
minerals and mining.
The Namibia Development Corporation is a parastatal engaged in the
supply of loans and equity, promotion of employment, sustainable local
and foreign investment, trade, stimulation of small and informal
economic activity, and management of agricultural projects.
The Export Import Bank of the United States (EXIMBANK) provides
insurance and guaranties for sales of services, products, and equipment
to Namibia. Terms and conditions are consistent with the products or
project being financed. Investment funding from OPIC is available for
private sector projects in Namibia where there is significant U.S.
investment or involvement.
For agricultural projects, the United States Department of Agriculture
(USDA) provides credit guarantees for up to three years for eligible
commodities such as wheat, vegetable oils, dried pulses, oilseeds, wheat
flour, feed grains, breeder livestock, poultry, tallow and salmon.
These guarantees are available through the Commodity Credit Corporation
(CCC) Export Credit Guarantee Program (GSM-102). An authorization of
U.S. $110 million for Southern Africa, including Namibia, is available
for fiscal year 1995.
Namibia enjoys excellent creditworthiness in international financial
circles, and is eligible to draw on IMF, World Bank, and African
Development Bank resources. Namibia's external debt service is
negligible, as South Africa agreed in 1994 to forgive nearly 700 million
rand of liabilities incurred during the South African administration of
the former South West Africa.
IX. Business Travel
There are no special business customs meriting attention by U.S.
While the crime situation in Namibia is less severe than in most other
African nations, continued high unemployment, inequality in living
standards and an influx of rural people moving into Windhoek from the
northern regions of the country unsuccessfully seeking work, have
resulted in a steady increase in criminal activity. The most common
offenses include pick-pocketing, purse snatching, vehicle theft, and
A passport, an onward/return ticket and proof of sufficient funds are
required for entrance into Namibia. Visas are not required for
Americans for tourist or business visits of 90 days or less.
The following are business holidays in Namibia in 1995: March 21
(Independence Day), Good Friday, Easter Monday, Ascension Day, May 1
(Workers' Day), May 4 (Cassinga Day), May 25 (African Freedom Day),
August 26 (Heroes' Day), December 11 (Human Rights Day observed),
December 26 (Day of Goodwill).
Visitors to Namibia will find several modern, well-equipped hotels with
full telephone, telex and fax facilities. Car rental services are
available, and the road network between major towns is good. A U.S. or
international driver's license is sufficient to rent a car. There are
several scheduled international flights linking Windhoek with London and
Frankfurt, and South Africa's Johannesburg and Cape Town.
Health care facilities are relatively modern, especially in the city of
Windhoek. Doctors and hospitals often expect immediate cash payment for
health care services. U.S. medical insurance is not always valid
outside the United States. Supplemental medical insurance with specific
overseas and medical evacuation coverage has proven useful. Local
commercial concerns offer a basic travel assistance policy for visitors
to Namibia and several other Southern African countries. All expenses
are covered such as medical expenses, transportation, emergency travel
and other assistance services. These services are available at
affordable fees, depending on the length of the visit.
General consumables and food are widely available and reasonably priced.
Population:1.6 million (1994)
Population Growth Rate:3.5 percent annual growth
Religion (s):Predominantly Christian; also indigenous beliefs
Government System:Republic as of March 21, 1990; Executive branch headed
by an elected President; bicameral legislative branch composed of a
National Assembly and the National Council; the Judicial branch is
composed of the Supreme Court, the High Court, and lower courts
Language (s): English is the official language of Namibia; Afrikaans,
German, and various indigenous languages also are spoken
Work Week: Monday - Friday
Sources:Namibia Background Notes, 1991 Census Report, Namibia Trade
All figures are in millions of U.S. Dollars converted at the average
Namibia Dollar exchange rate, unless otherwise noted.
1993 1994 1995 est
GDP (million N$)(a) 7,050.3 8,827.1 n/a
GDP Growth Rate (%) 3.3 3.6 3.6
GDP per capita ($) 1,414.0 1,465 1,500
(% of GDP)(b) 34.7 30.9 33
Inflation (%) 8.6 10.7 n/a
(% of formal sector) 30.0 35.0 est 40.0 est
Foreign Exchange Reserves n/a n/a n/a
Average Exchange Rate for USD 3.27 3.55 3.61
U.S. Assistance (million $) 3.5 13.4 12.9
(a)at current factor cost
(b)at current prices
Sources: U.S. Department of Commerce, Namibian Investment Center,
Namibian Central Statistics Office - National Planning Commission, Bank
1993 1994 1995 (1st qtr)
Total Country Exports (a) 1,303.7 1,514.8 n/a
Total Country Imports (a) 1,129.8 1,601.4 n/a
U.S. Total Exports 19.7 16.3 9.9
U.S. Total Imports 22.0 27.8 2.8
(a)at current prices
Sources: U.S. Dept. of Commerce, Bank of Namibia, Namibian Central
Statistics Office - National Planning Commission
Namibia Contact Points
Ministry of Trade and Industry
The Permanent Secretary, Mr. Hanno Rumpf
Private Bag 13340
telephone (264) 61-229933, FAX (264) 61-220227
The Investment Center
Mr. Steve Galloway, Acting Director
Ministry of Trade and Industry
Private Bag 13340
telephone (264) 61-229933, FAX (264) 61-220278
Namibia National Chamber of Commerce and Industry (NNCCI)
The Secretary General, Mr. J. Dammert
P.O. Box 9344
telephone (264) 61-228809, FAX (264) 61-228009
Customs and Excise
Mr. Samson Kaulinge, Director
Private Bag 13295
telephone (264) 61-2099111, FAX (264) 61-36454
Ministry of Agriculture, Water and Rural Development
Permanent Secretary, Mr. I. Kaulinge
Private Bag 13184
telephone (264) 61-2029111, FAX (264) 61-229961
Ministry of Mines and Energy
Permanent Secretary, Dr. Shimutuikeni
8th Floor, Trust Center, Independence Avenue
Private Bag 13297
telephone (264) 61-226571, FAX (264) 61-238643
Ministry of Fisheries and Marine Resources
The Permanent Secretary, Dr. J. Jurgens
Private Bag 13355
telephone (264) 61-240201, FAX (264) 61-224566
Ministry of Environment and Tourism
The Permanent Secretary, Ms. Ulitala Hiveluah
Private Bag 13346
telephone (264) 61-2849111, FAX (264) 61-22930
Namibian Ports Authority
Chief Executive Officer: Captain JD von der Fecht
13th Road, Walvis Bay
P.O. Box 361, Walvis Bay
telephone (264) 642-8218, FAX (264) 642-8242
Bank of Namibia
The Deputy Governor, Mr. Tom Alweendo
P.O. Box 2882
telephone (264) 61-226401, FAX (264) 61-229874
City Savings and Investment Bank
P.O. Box 63
telephone (264) 61-221-087, FAX (264) 61-221555
Commercial Bank of Namibia
P.O. Box 1
telephone (264) 61-2959111, FAX (264) 61-224417
First NationaL Bank of Namibia Ltd.
P.O. Box 195
telephone (264) 61-229610, FAX (264) 61-225604
Standard Bank Namibia
4th Floor Mutual Platz
P.O. Box 3327
telephone (264) 61-2942401, FAX (264) 61-2942409
Namibian Development Corporation
Private Bag 13252
11 Goethe Street
telephone (264) 61-306911, FAX (264) 61-33943
Embassy of the Republic of Namibia to the United States
Ambassador, Mr. Tuliameni Kalomoh
Trade Attache, Mr. Paulo Shipoke
1605 New Hampshire Avenue, N.W.
Washington, D.C. 20009
telephone (202) 986-0540, FAX (202) 986-0443
Embassy of the United States of America
Ambassador, Mr. Marshall McCallie
Economic and Commercial Officer, Mr. Philip Drouin
14 Lossen St.
Private Bag 12029, Ausspannplatz
American Embassy, Windhoek
Department of State
Washington, D.C. 20521-2540
telephone (264) 61-221601, FAX (264) 61-229792
U.S. Department of Commerce
International Trade Administration
Mr. Finn Holm-Olsen, Namibia Desk Officer
Room 3317, 14th St. & Constitution Ave., N.W.
telephone (202) 482-4228, FAX (202) 482-5198
Trade Event Schedule
The Windhoek Agricultural Show
September 28 - October 5, 1995
The Namibian International Trade Fair
April 17-20, 1996
To the top of this page