Finalisation of NEEEB
Finalisation of National Equitable Economic Empowerment Bill (NEEEB) was identified as a key priority and the Bill will be tabled in parliament within six months. This would help restore certainty for the private sector and prospective investors into the Namibian economy.Compulsory 25 percent equity has been removed but all other pillars will remain and be taken into account for enterprises doing business with government and applying for natural resources licensing.
Amendments to Namibia Investment Promotion
Government has finalised revisions and the Bill will be tabled before the Cabinet Committee on Legislation and, thereafter Cabinet before proceeding to Parliament. The Act could be operational by end of this financial year. The revised Act would rid it of perceived cumbersomeness and bureaucracy, which defeated its intended purpose as an instrument to promote investment.
Public Procurement Act, 2015
Cabinet has agreed in principle to review and amend where necessary this Act during this current financial year. This would, among others, simplify bidding documents to prevent lengthy procurement process and enable local businesses to participate.
However on the final recommendation pertaining to the adjustment for pricing in local currencies to account for currency fluctuations, government is of the view that this recommendation exposes the fiscus to risk of currency fluctuations and cannot be accepted.
Loan to value regulation
Constraints are experienced regarding the Bank of Namibia’s loan to value regulations and the Macro Prudential Policy. As it currently stands, prospective home- loan applicants for second residential properties are required to pay 20 percent of the market value of the residential property, while the commercial bank will only finance 80 percent of the home-loan. In response, Cabinet has directed the Ministry of Finance to identify bottlenecks and take concrete measures to address the said bottlenecks.
Current visa requirements are deemed to deprive Namibia optimal tourist spending, and foreign direct investment. Thus, the ministry of home affairs has been directed to, among others, introduce e-visa or visa at entry point at a low nominal fee, provide easy access for work visa for highly skilled professionals and potential investors, provide easy access for residence visa for foreign pensioners; and offer residence visa on the back of capital investment with a to-be-defined threshold.
Domestic construction companies face substantial challenges competing with foreign companies due to unlevelled playing field due to requirements in relation to performance guarantees and collaterals. The other problem relates to the lack of an institution that regulate the construction sector.
Cabinet directed the Ministry of Works and Transport to introduce the National Construction Council and ensure that any additional regulations should not hinder the participation of SMEs in the building and construction sector.
Bush harvesting in communal areas for charcoal production
Wood for charcoal is harvested mainly from commercial farms in central and northern Namibia. There are currently around 650 charcoal producers in the country, however, the majority of them are commercial farmers as charcoal harvesting is not permitted in communal areas. It is recommended that bush harvesting permits be issued to communal farmers and that government avails mechanism to assist the harvesting of charcoal in communal areas. Cabinet agreed to recommendation.
Public private partnerships (PPPs)
Due to limited financial resources, public capital projects have experienced delays and cost over runs. PPPs could mitigate some of these shortcomings, accelerate project implementation and inject additional funds into the economy. It was recommended that government considers the PPP model. For the procurement of complex large projects such as those of more than N$250 million and with a lifespan of more than 10 years to leverage state assets to unlock liquidity.
Cabinet agreed on PPP, however, such partnerships should be referred to general principles of PPP rather than to specific projects.
Non-deductibility of royalties
The Ministry of Finance announced changes to the Income Tax Act this year (2019). The said changes will disallow the deductibility of royalties and export levies for non- diamond entities. It was recommended that government puts the proposed changes on hold for the time being, pending consultations with stakeholders in the mining industry.
Cabinet directed mining industry players to be engaged on the matter and so that appropriate recommendations are made to Cabinet for consideration.
Cabinet also directed the Ministry of Finance to consider suspending the no-deductibility of royalties for a period of one year while undertaking a study on the matter.
2019-08-02 07:19:50 | 6 months ago