Windhoek
The content of the New Equitable Economic Empowerment Framework (NEEEF) is being translated into a legally enforceable draft statute. NEEEF’s primary aim is to bring about socio-economic transformation in order to enhance equity, social justice and empowerment of the previously disadvantaged majority by integrating deprived Namibians into the economic mainstream.
“Like any legislation, the Bill provides the legal framework for NEEEF to be implemented, including the institutional structure and the powers to prescribe and enforce transformation of asset ownership and other empowerment opportunities. The details on transformation charters, economic empowerment targets and empowerment standards will be contained in either regulations to be issued under the Act or Empowerment Standards and transformation charters for a particular sector of the economy to be issued by the Council,” said Prime Minister Saara Kuugongelwa-Amadhila yesterday during a workshop on the presentation of the NEEEF Draft Bill in the capital.
Kuugongelwa-Amadhila noted that NEEEF is designed to promote transformation in business through six empowerment pillars, of which the first three are mandatory and all six are subject to scoring. These include the Ownership Pillar; Management Control and Employment Equity Pillar; Human Resources and Skills Development Pillar; Entrepreneurship Development and Marketing Pillar; Corporate Social Responsibility Pillar; and the Value Addition, Technology and Innovation Pillar.
“NEEEF shall be obligatory to all enterprises. Government shall use all the regulatory, licensing and market mechanisms at its disposal to ensure compliance. These will include, amongst others, government procurement of goods and services, work permits, access rights to natural resources, e.g. fishing, mining, hunting and tourism concessions, etc., as well as the issue of business licences for trading, telecommunications and financial services. Government expects all businesses to proactively embrace the national transformation framework and participate wholeheartedly in the transformation of asset ownership and empowerment,” Kuugongelwa-Amadhila explained.
She said that the NEEEF recognises there may be differences in approach between the different sectors of the economy due to their diverse characteristics and strategic importance. It, therefore, makes provision for further sectoral charters that will make sector-specific requirements in accordance with parameters provided in the score card. These will be adopted after consultation with sector stakeholders once the NEEEF is enacted into law and the institutional structures are in place.
“We recognize that the transformation deals will require considerable funding resources and, therefore, we encourage all stakeholders, especially the financial sector and government’s development institutions and the respective firms that will be undergoing restructuring to design and develop innovative financing mechanisms for empowerment deals, which will contribute to the deepening of the financial system,” said Kuugongelwa-Amadhila.
She also pointed out that during the process of crafting the Bill a benchmarking mission was undertaken to South Africa for familiarisation with South Africa’s Broad-based Black Economic Empowerment policy, which is already 12 years in existence. “We learnt through that mission that the South African empowerment strategy has provided a noticeable opportunity for black South Africans to improve their livelihood from a socio-economic perspective. However, there have also been challenges, such as large companies lagging in terms of compliance with the empowerment legislation and reluctance to embrace and implement meaningful transformation. In addition, we learnt that passive shareholding deals did not work and resulted in the least real empowerment of people.
The South African experience also highlighted the need for meaningful relationships between big and small companies and that it requires pro-activeness to achieve this. In addition, fronting through the use of complex transactions was identified as a major problem,” she said.
Kuugongelwa-Amadhila also acknowledged that NEEEF is part of a broader policy package the government has adopted aimed at creating decent employment, eradicating poverty and dealing with extreme inequality.
“The notion that NEEEF is only about a few deals involving big business and of benefit to a few individuals must be dispelled. It must be broad-based to achieve the maximum impact on all Namibians,” she concluded at the opening of the workshop.