CHAMWE KAIRA
The proposed Investment Promotion and Facilitation Bill could restrict foreign participation in several sectors, including retail, agriculture, construction and transport, while introducing local ownership requirements and ministerial approval for investments in strategic industries.
An analysis by Simonis Storm Research, says the legislation could significantly change investment arrangements by reserving certain economic activities for Namibian citizens, permanent residents and Namibian-controlled businesses.
The bill was tabled in parliament on 4 November 2026, following a decade of development efforts dating back to 2016.
The proposed framework gives the responsible minister powers to reserve economic activities for local investors, require foreign investors to enter joint ventures with Namibian partners and approve investments or changes in ownership in designated strategic sectors.
The proposed restrictions come against a backdrop of significant foreign investment inflows but limited employment growth.
Namibia recorded net foreign direct investment inflows of N$114.9 billion between 2021 and 2024, largely driven by oil and gas exploration in the Orange Basin.
However, employment at foreign-owned companies increased by only 6 835 between 2019 and 2023, equivalent to approximately N$17 million in foreign investment for every additional job created.
Strict unemployment stood at 36.9%, while the proportion of young people not in employment, education or training reached 41.9%.
Simonis Storm also noted that quarterly foreign investment inflows had halved since early 2025 as offshore drilling activities shifted towards appraisal.
Economic growth slowed to 1.7% in 2025, while fixed investment declined by 8.3%.
Under the proposed regulations, several activities would be reserved exclusively for Namibians.
These include retail and farming businesses valued below N$7.5 million, construction contracts below N$200 million, fuel road haulage and storage, customs clearance, freight forwarding, equipment and plant rental, guesthouses valued below N$5 million, campsites, taxi operations, salons and childcare centres.
Other activities would require foreign investors to partner with Namibians, with a minimum local ownership requirement of 33.3%.
These include engineering, architecture and quantity surveying consultancies, marine fishing, forestry, and lodges and hotels valued at up to N$200 million.
Ministerial approval would be required for new investments and changes in ownership in mining, oil and gas, education, lodges valued above N$200 million and retail businesses exceeding N$300 million.
However, the proposed restrictions would not apply to passive portfolio investments that do not involve management influence.
These include shares listed on the Namibian Stock Exchange, government and corporate bonds, and unit trusts.
Simonis Storm warned that the proposed local participation requirements could create capacity constraints, particularly in construction and equipment rental.
The reservation of construction subcontracts below N$200 million for local businesses could affect large projects, including the proposed US$10 billion Hyphen green hydrogen development.
The research firm noted that Namibia’s entire construction industry generates approximately N$3 billion in annual value, raising questions about its ability to meet the procurement requirements of major projects.
In agriculture, restrictions on foreign purchases of farms valued below N$7.5 million could reduce access to capital for financially distressed farmers.
The sector contracted by 22.7% in real terms in the third quarter of 2025, partly amid foot-and-mouth disease outbreaks.
On dispute resolution, the proposed framework requires disputes to pass through an internal grievance committee before proceeding to the Namibian High Court.
International arbitration would only be available where specifically provided for in project contracts.
