NANGULA Uaandja, the CEO of the Namibia Investment Promotion and Development Board, says the 2024/25 budget represents a pivotal move in sculpting a thriving Namibian economy and reaffirming the government’s commitment to inclusive prosperity.
“The budget reflects the government’s efforts to bolster economic growth by improving Namibia’s investment attractiveness, through unlocking domestic and foreign investment, developing a conducive environment for micro, small and medium enterprises (MSMEs) to thrive and creating opportunities for employment,” she said yesterday in a statement.
Finance minister Iipumbu Shiimi tabled a N$100.1 billion national budget on Wednesday in the National Assembly.
Namibia had a record-breaking foreign direct investment (FDI) of N$17.5 billion for 2022 and N$26.4 billion for the first three quarters of
2023.
With an increasing global presence and unparalleled natural resources, Uaandja noted that the Namibian economy has the potential to grow significantly provided the country sustains a progressive business environment.
FDI can be explained as an ownership stake in a foreign company or project made by an investor, company, or government from another country.
According to Uaandja, the reduction of the corporate tax rate from 32% to 20% and zero-rating on value added tax (VAT) for approved Special Economic Zones (SEZs) for up to 10 years will encourage investment in projects aligned with national priorities of mineral beneficiation/value addition, agro-processing and business process outsourcing.
This intervention, she noted contributes to the government’s industrialisation agenda and drives further investments in the country.
SEZs are a key policy instrument deployed to ensure economic goals are met through industrialisation. These zones provide a valuable platform for structural change, including infrastructure development and streamlined regulatory mechanisms.
“The limitation of interest deduction to non-resident related parties is also an intervention that aligns with regional benchmarks. Aside from the obvious benefits of increased tax revenue and curbing transfer pricing challenges, this provision will also encourage corporations to source competitive financing mechanisms including sourcing local capital to finance investment projects,” said the chartered accountant.
She further welcomed the investment in skills development through the Youth Employment Tax Incentive, by contributing 50% towards the internship cost, limited to N$50 000 per annum per intern.
This intervention, according to her will increase Namibia’s competitiveness as skills availability has been identified as the number one consideration for investors before making a final investment decision.
The NIPDB is therefore proud to partner the Ministry of Finance and Public Enterprises in rolling out this project on 1 April 2024.
Also, commenting on the budget, independent researcher Joseph Sheehama said despite this being another market-friendly budget, implementation will again be key, particularly on the reform and expenditure fronts.
“To resuscitate the Namibian economy would require massive investment in infrastructure, skills and training; enacting and enforcing enabling-business incentives to stimulate the production of goods and services for local consumption and exports,” he advised.