Shortly after the Namibia Investment Promotion Bill was tabled for deliberation in parliament, various messages on social media circulated highlighting the bill shortcomings and that it should not be allowed to go through in its current form.
The media outlets commentaries from economic players castigated the draft bill perceiving it a ‘SuperMinister bill given the powers it accords.
This forced the bill to be temporarily withdrawn and forced the Ministry of Industrialisation and Trade (MIT) to go back to the sectors and do further consultation before re-tabling the bill.
In an attempt to decode the draft bill, MIT’s deputy executive director, Michael Humavindu, wrote an explainer decoding their intention on the bill in relation to modern investment legislation’ central themes.
The ministry’s power accorded in the draft, and the reservation of certain sectors for local people are at the centre of the bill.
Furthermore, the classification of various activities as administrative or part of the implementation.
According to Humavindu, sector reservations, the withdrawn bill makes a case for specific sectors to be in the hands of the Namibian people.
However, it provided a gradual and focused approach whereby the Minister must first get cabinet approval, he said.
There are also questions on rather than blanket sector reservation, the Minister would be required to stipulate thresholds for sector reservation.
The deputy ED explained that the bill provides for sector reservation such as in the retail sector but only for investments up to N$500,000 or employing a number of employees as an example.
“This implies that the Minister must satisfy certain empirical research to even convince Cabinet on the need to reserve a certain sector,” he explained.
Humavidu added the bill proposal is more accommodative than closing a specific sector completely or denoting a negative list in an act.
ADMINISTRATIVE AND IMPLEMENTATION POWER
In terms of administrative approval and implementation procedures, Humavindu explained that the bill stipulates that the administrative oversight rests under the Minister whilst the implementation is with the designated investment promotion agency – in this case, the Namibian Investment Promotion and Development Board (NIPDB).
He said the bill also accords the Minister to approve, upon request by an investor, the consideration to invest in the reserved economic sectors.
“No Ministerial approval is required for economic sectors that are not designated,” Humivandu stated.
On behalf of the State or at the request of the Investment promotion agency or an investor, the MIT’s Minister may also enter into a performance agreement.
Such an agreement must be aligned to transparency, set timelines and national laws.
There is also fear that seeking ministers’ approval will derail and increase the bureaucracy and the red tape as observed currently.
Humavindu explained that approval turnaround times are mainstreamed even for those investments requiring the Minister’s determination.
Adding investors’ rights are protected duly in terms of expropriation and payment of compensation rooted in market value.
Moreover, obligations of the investor have also been outlined as well as a provision for international arbitration in some instances and an opportunity to rectify transgression and appeal to the High Court in terms of ministerial fines imposed.
In-built flexibility in terms of the organisational imperative for the promotional agency is provided for in the regulations, explained the deputy executive director. Email: firstname.lastname@example.org