• November 13th, 2019

Namibian retail industry dominated by South African investments

Evaristus Natangwe Titus 

The political ties between Namibia and South Africa dates back to many years ago since Namibia was under that country’s colonial regime. With just nearly eight months left before Namibia celebrates her 30th birthday, this culture is still dominating Namibia as some sectoral investments are heavily concentrated by South African majority ownership. 

Thirty years back since independence is a good indicator that the country is at a comfortable stage to address some of these domestic socio-economic challenges. Indeed, the ruling government is commendable on notable achievements such as good governance, peace and macro-economic stability the economy is enjoying to date. However, it is still a troublesome situation in Namibia such that some industries continue recording economic and social imbalances between the locals and foreigners participation. In particular, there has been an exponential Investment growth in retail and banking industry in Namibia from South Africa however, however, only an insignificant or no equity representation by local Namibians. 

The background of this analytic is referenced to Namibia retail industry in a sense that most formal shops are 100 percent South African equity based with little or no shareholder space for locals. The recent built biggest shopping malls in Namibia are practical case study to this argument as they house 95 percent South African shops. This arrangement is perceived to results in more future risks to Namibians as it benefits the offshore citizens’ minorities’ than Namibian. Should this industry setup continues in this manner, it is expected that the national Gini-Coefficient as a measurement of wealth distribution will continue widening hence deepening the majority of Namibians into poverty. Notably this arrangement is also coupled to long term challenges such as persistent profit expatriation, loss of pride amongst Namibian entrepreneurs as well as insignificant foot print in this sector by Namibians as a contribution to grow a home economy. 

Although this is not a right time to blames the government nor the private sector, the fact remain that this drawback is caused by gaps in existing national policies that excludes binding clauses for local shareholders in the retailer sector. We welcome all investments types in Namibia provided they are sustainable and create future wealth to our locals. The national economy has grown to a stage where wealth can no longer be generated from direct employment nor government tax. We need to make use of opportunities such as equity space for local populace in multinational investments in our economy. This strategy is expected to lessen social and economic pressure on our state revenues through citizen dependency on our government.

While aspiring to be a prosperous industrialised economy, there is an urgent need through the government to make considerable effort in reforming the current laws to include a new chapter for locals’ equity space in foreign investments.  We appreciate prior government policies and laws that navigated our economy to this stage. However, as we continue to experience new political, social and economic hindrances due to globalisation, equally we should develop new mind-sets that improves the livelihood of our indigenous people. Retailer industry generates a high profit margin in this economy therefore business can no longer be allowed as usual. Let this sector be restructured to become mandatory for every foreign investment provide a defined equity level for local entrepreneurs.

*Evaristus Natangwe Titus is a business and economics analyst


Staff Reporter
2019-06-06 09:41:37 | 5 months ago

Be the first to post a comment...