About the strife brought by World War II, Winston Churchill once said, “…Never let a good crisis go to waste”. Crises are moments of truth – and the Covid-19 pandemic is one of them challenging our complacency in our economy. Hopefully, the guilt of not challenging the norm and instead be satisfied with the status quo and tradition is catching up with us.
Gillian Hadfield (Law Professor, University of Toronto) argues that the legal rules that currently guide developing economies are no longer working as expected. They are too slow, costly and localised while failing to address pertinent issues such as poverty. She said this in response to Thomas Friedman’s “flat world” analogy depicting the world as a highly networked and globally complex organisation in terms of trade and investment movement.
A newspaper article, ‘Litigation bleeding CRAN dry’ (New Era, Wednesday 31 March 2021), is a good example showing some truth in Gillian Hadfield’s assertion. The article gives light on an ongoing court case that dates back to 2013 (8 years ago). In that case, two giants in the industry have bullied the regulator to the point of submission. Seemingly helpless, the CEO of CRAN removes the option of pulling the plug on the two, citing adverse consequences on the consumers.
Strangely, the two belong to the same government which created CRAN. Pigou (1932), in his Public Interest Theory, explains in part, “…regulation seeks the protection and benefit of the public at large”. Of importance here are Pigou’s works on Ethics of Political Economy, which concludes; you cannot be a regulator and simultaneously participate in the same industry you are regulating. Doing that is synonymous with being a referee and a player in one of the teams competing in a sports code.
The anomaly of regulating yourself by the government is symptomatic of a legislative framework that needs reengineering. Despite sounding far-fetched, inadequacy permeates scenarios such as the thorny issue of land and many more.
Making Namibia a paradise for investment during these times of the pandemic and after, at least two things must happen now and not later:
Harness the impetus for economic growth through enacting and amending laws keeping pace with developmental requirements.
Increasing investor protection, for instance, remove any barriers in the capital markets that affect stock liquidity which is one factor viewed favourably by investors.
Beyond those two technical reasons above, under her belly, Namibia is endowed with many natural resources such as diamonds, uranium, gold, etc. Also, a coastline with seafood in abundance. And enough land to give every Namibian 33 hectares.
Broadening access to natural resources by her citizens and creating an environment conducive to innovative financial instruments will go a long way to create wealth for citizens.
When they make irrational decisions, legislators are generally left unscathed. To mitigate this, citizens ought to be politically sophisticated when using the information to judge and hold leaders accountable for their actions.
The current positive development is the creation of the Namibian Investment Promotion and Development Board (NIPDB). The functions of such a body as prescribed by the Geneva blueprint are around investment promotion covering a wealth of services, ranging from the provision of market information to the undertaking of feasibility studies and environmental impact assessments.
In my view, NIPDB will achieve more if it works alongside a capital market development agency with a mandate broader than that of NAMFISA on capital markets regulation.
In summary, the impact of the Covid-19 pandemic crisis on our economy is lifting the veil on a legal infrastructure that is not responsive to challenges that require an immediate and precise course of action.
*Robert Gatonye is a doctoral student (finance) at the Namibia Business School (NBS), an ICT expert, and a Certified Public Accountant (CPA).