Martin Endjala
The new Banking Institutions Act, 2023 (Act No. 13 of 2023) sets aside 25% for Namibian investors and reduces foreign ownership in banking institutions from 100% to a set requirement of 75%.
The Act applies to all banking institutions, whether Namibian-owned or not.
According to Kazembire Zemburuka, the BoN’s spokesperson, this requirement aims to align banking institutions with national aspirations expressed in national development plans by fostering a blend of foreign and local ownership and enhancing local empowerment.
“This ownership requirement in banking institutions applies to all new banking institutions, irrespective of whether the applicant originates from the Common Monetary Area (CMA) or any other jurisdiction,” he said.
He said the Banking Institutions Act of 2023 was drafted considering all national development plans and policies, such as the New Equitable Economic Empowerment Framework (NEEEF).
He said the main objective of NEEEF is to promote equitable and balanced ownership of businesses in Namibia.
Zemburuka said the objective of the local ownership requirement, as articulated in the Banking Institutions Act of 2023, is well aligned with NEEEF’s policy objectives.
Independent banking researcher and economist Josef Sheehama said reducing foreign ownership in financial institutions is crucial for the nation.
He said it would allow Namibians to make more local decisions, which is important to the community in which the institution operates as well as investors.
“Localising decision-making to Namibia will hasten the process. Encourage a sense of ownership among the community. Expand the economy of the country while there is still more capital in Namibia. Supervised by locals who are acquainted with the setting in which the banks operate,” he said.
The economist is confident that Namibians can manage 25% stakes in financial institutions and, through equity participation, will ensure the raising of additional funds to buy 25% stakes or joint venture capital, among other things.
He explained that this has happened in a number of organisations where businesses have raised enough money through public offerings, adding that the government must guarantee Namibians’ capacity to purchase shares.
He believes that Namibia can manage it because all that is required is the establishment of robust legal frameworks backed by sound governance.
According to him, everyone will be able to engage in the local economy, and our economy will grow.
“This structure benefits all parties. For financial institutions to stay competitive in the local market, it will be helpful to weigh the advantages of attracting new business and maintaining the trust of their current international clientele against the costs of localising for their diverse clientele,” said Sheehama.
The Namibia Competition Commission’s (NaCC) spokesperson, Dina Gawases, said that the commission’s stance is that the new banking legislation on shareholding does not impact the commission’s mandate.
“The Commission’s role is when undertakings intend to transfer or sell their shares. Gawases explained that undertakings should file such transactions with the Commission to undergo the necessary investigative processes as required by the Competition Act.
