Business and investor confidence restored after guaranteed property rights at land conference
WINDHOEK – The jitters felt by local businesses and investors prior to the second national land conference that took place in the capital last week seem to have faded resulting in restored and improved business and investor confidence. Local economic analysts agree that much of the restoration of confidence comes from the assurance from the conference that property rights remain guaranteed and that the rule of law and just compensation for expropriated land will be enforced.
“The biggest relief for the financial industry is that a degree of certainty has been achieved. Fears of anarchy inducing land grabbing have been pacified. An environment charged with uncertainty serves as a deterrent to local and foreign investment,” commented Claudia Boamah, Economic Analyst at Capricorn Asset Management.
Boamah noted that Namibia’s land reform measures are being measured against South Africa and Zimbabwe where land has also been a contentious issue.
“The fact that there was a conference means that Namibians are still open to dealing with reform within the system, which is a signal to the world that the probability of random land seizures is very low and property rights are still secure in Namibia,” Boamah noted.
She added that clear parameters established at the conference regarding expropriation were welcomed, where only land owned by absentee owners or underutilised land can be the subject of expropriation and there is an obligation on the state to offer just compensation.
“In theory this bodes well for the economy; the offer of compensation demonstrates adherence to the law of the land and therefore emphasises the strength of and respect for institutions in the country. The expropriation of underutilised land speaks to a commitment to achieving economic efficiency,” said Boamah.
“There are extremely divergent views on the matter of land reform in Namibia and it would be difficult to maintain peace in the country if the conference’s resolutions leaned too close to one side or the other. Therefore, the most realistic expectation to have of this land conference is the achievement of a good compromise,” she continued.
Weighing in on the debate, Klaus Schade, Research Associate at the Economic Association of Namibia, said for the private sector and for investors it was reassuring that property rights remain guaranteed and that there won’t be any attempts to change this part of the constitution.
“Although some relevant groups of societies have boycotted the conference, the diversity of the participants as well as the frank discussions have certainly also sent a positive signal out to the private sector and potential investors,” said Schade.
He noted however that there are many resolutions from the conference that will impact on investor sentiments and confidence that need further clarification, such as the prioritisation of expropriation over the willing-seller, willing-buyer principle, ownership of urban land by foreigners, absentee landlords, rent control bill, etc.
He pointed out that it is not only the Namibian Constitution that is binding, but international agreements the country has singed, such as the Convention of the Multilateral Investment Guarantee Agency, as well.
“The hard work lies ahead, namely to translate the resolutions into implementable strategies and ensure that they are in line with the various legal instruments or that these instruments are being adjusted accordingly,” Schade said.
During last week’s conference, Deputy Governor of the Bank of Namibia, Ebson Uanguta, warned that no one would be willing to commit investment in an enterprise where property rights are not secured. “Without clearly defined property rights contracts will not be enforced and it would be extremely difficult to plan for the future. Well-defined property rights are the most basic necessity for a functioning economy and lack of them is the biggest drag on an economy. The less secure those rights are, the poorer the economy gets. Disrespecting property rights in one sector of the economy may have spillover effects or create a perception that property rights in the other sectors may also not be respected,” Uanguta cautioned conference delegates.
2018-10-10 10:12:10 7 months ago