Analysts have applauded the move by government to set aside certain sections of the economy to the locals, through the Investment Act, saying the move will go a long way in enhancing the participation of the previously disadvantaged in the economy.
Speaking to Prime Focus Magazine, SME Compete Deputy Director Danny Meyer pointed out the need for local entrepreneurs to be given the opportunity to become self-employed and create employment for other Namibians. However, the protection offered should not be misused or abused, by bringing in sloppiness as it relates to customer service or increased pricing to the extent that it prejudices consumers.
These sentiments come after President Hage Geingob assented the Investment Act, which reserved among others, hair salons, street vending, retail and other small businesses to locals.
“The Act In this regard solves the concerns of Namibians that wished to venture into businesses and felt they were at a disadvantage because foreigners had the capital that Namibians could not easily access. Resultantly the path is now open for locals who are already operating in the informal sector and now plan to migrate or graduate into the formal sector, to do so without fear of unfair competition,” Meyer said.
Meyer went on to say that there is a risk attached when such legislation is enacted, but undoubtedly government will closely monitor if the intended targeted results are being achieved, being growth in the reserved sectors and more Namibians venturing into business by opening enterprises in those sectors.
“Although there are some risks that would come with this legislation, it is viewed from two angles and it will benefit both policy makers and for aspirant entrepreneurs,” he said.
Meyer also noted that, “firstly policy makers are demonstrating that government not merely listens to the wishes of people, but acts.”
Now that the Investment Act has been implemented and the risks are known, He explained that it is not unusual for a government to favour its nationals in certain spheres of daily life and including them in the business arena.
Although this Act has been implemented in other foreign countries, he admitted that, “most countries will have rules and regulations in place that provide favourable advantage to its people when it comes to tenders, procurement of goods and services or precluding foreigners from conducting business in certain segments.”
Namibian government has also in all likelihood already developed and put a performance monitoring mechanism in place to make sure that the rules of the Act are adhere to.
Meyer said, “At the end of the day, the Act provides the asked-for protectionism and hopefully kick-starts a process that will lead to the intended result, being accelerated growth in the sectors reserved for Namibians.” He added that, “in that way wealth and job creation is accessible and more Namibians, especially jobless individuals view venturing into business as a more attractive option than sitting around waiting for a job that might never come.”
According to research, the new Act would also introduce a concept of performance agreements if considered appropriate enabling the minister to sign performance agreement with investors.
The Act further provide for argument resolution mechanisms involving local and foreign investors.
The idea of reserving certain economic sectors for locals was first mooted in the 2014 Swapo election manifesto. Swapo party secretary General Nangolo Mbumba at the time stressed that each administration and the State in general has a duty to protect its people, however it was revealed that the success of the reserved sectors will depend on the ability of Namibians to develop and grow the sectors reserve for them.