Namibia gained independence in 1990, after a protracted liberation struggle that put an end to more than a century of colonial German and South African rule. During this period, South African apartheid laws were enforced in the country (then South West Africa), resulting in discrimination against the indigenous black population in all sectors of society, especially in education and with regard to political and economic/business opportunities. Upon independence, therefore, the elected Government of the Republic of Namibia (GRN) has prioritised bringing the previously disadvantaged Namibians into the mainstream of the Namibian economy.
One of the biggest challenges the GRN faces in this regard is to attract foreign investment, while at the same time promoting local development. One of the principles of state policy, in terms of the Constitution of the Republic of Namibia, 1990, states that the economic order of Namibia must be based on the principles of a mixed economy with the objective of securing economic growth, prosperity and a life of human dignity for all Namibians. Furthermore, in terms of these guidelines, foreign investment must be encouraged within Namibia, subject to the provisions of an investment code to be adopted by parliament. To this effect, the GRN passed the Foreign Investment Act 27 of 1990, which makes provision for the promotion of foreign investment in the country. Foreign nationals are awarded protection by this legislation by, among other matters, being guaranteed the repatriation of funds and interest invested in Namibia. Apart from this, the Export Processing Zones Act 9 of 1995, which provides for the establishment, development and management of export processing zones (EPZs) in Namibia, was also passed. The objects of the EPZs include attracting, promoting and increasing the manufacture of export goods and creating and expanding industrial investment, including foreign investment.
While opening up the economy to outside investors and economic competition on the one hand, the state has a concomitant duty to ensure the welfare, protection and development of its own citizens and has enacted relevant legislation. For example, in terms of the Agricultural (Commercial) Land Reform Act 6 of 1995, the Minister of Lands, Resettlement and Rehabilitation is entitled to acquire, against payment of compensation and in the public interest, agricultural land in order to make it available for Namibian citizens, especially those who have been socially, economically or educationally disadvantaged by past discriminatory laws or practices. The state also has a right to purchase agricultural land and the ownership of agricultural land by foreign nationals is limited.
The Affirmative Action (Employment) Act 29 of 1998 outlines measures that require relevant employers to ensure that suitably qualified persons in designated groups that include racially disadvantaged persons, women and person with disabilities, enjoy equal opportunities and are fairly represented in the various positions of employment. If need be, such applicants are to be shown preferential treatment when filling vacant positions.
A Transformation, Economic and Social Empowerment Framework (TESEF) was designed in May 2006, the goals of which are aimed at empowering previously disadvantaged Namibians and indigenising the economy by using a scorecard-approach, in terms of which a company’s empowerment status is calculated on the basis of six pillars, vis-a-vis ownership, management, procurement, affirmative action, enterprise development and socio-economic development. At this point, the document is not in force yet and it is uncertain whether and/or when it will be enacted.
Additional efforts by the GRN to further the development of the nation are evident in the natural resources industry. In terms of the constitution, all natural resources in Namibia vest in the state. In order to ensure that the country derives sufficient benefits from Namibia’s rich natural resources, the Petroleum (Exploration and Production) Act 2 of 1991 and the Minerals (Prospecting and Mining) Act 33 of 1992 contain a range of provisions aimed at benefiting the nation. Apart from the fact that, in terms of the Minerals Act, only a Namibian citizen or Namibian-registered company may hold a mineral licence, one of the standard terms and conditions of all mineral and petroleum licences requires that licence holders must give preference to Namibian citizens who are suitably qualified for the job in their employment policies.
Apart from circumscribing the rights and duties of private sector mining companies, the state is actively involved in the exploitation of mineral and petroleum resources through state-owned mining and petroleum companies. One of these is the National Petroleum Corporation of Namibia (Pty) Ltd (known as NAMCOR), with the state as sole shareholder. Its mandate includes meeting 50% of Namibia’s petroleum product requirements and ensuring an uninterrupted supply of fuel throughout the country. Furthermore, it may be required by the Minister of Mines and Energy to participate in the upstream petroleum industry on behalf of the State.
Epangelo Mining Company (Pty) Ltd, the state-owned mining company, was established in 2008, with the purpose of ensuring that the benefit of Namibia’s resources accrue primarily to the people of Namibia and not to beneficiaries in developed countries. Following a cabinet decision of 20 April 2011, uranium, copper, gold, zinc and coal are regarded as strategic minerals to which Epangelo now holds the exclusive exploration and mining rights. It is envisaged that all potential investors in these sectors will have to approach the company in order to become partners in exploration and mining ventures with regard to these minerals.