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Namibian economics to the point – October 2018

Avatar of inke inke - 31. octobre 2018 - Economics


Brigitte Weidlich

Unexpectedly strong but welcome rains hit mainly Namibia’s southern regions in the third week of October causing flash floods as rivers began to flow. Even the Khan and Swakop Rivers in the Erongo Region carried water. Some 700 delegates attended the second national land conference in Windhoek and agreed on 170 resolutions, such as one farm per owner, expropriation with just compensation and that foreigners may not own residential properties in future.  

President Hage Geingob paid a state visit to Kenya this month and thereafter attended the UNCTAD world investment forum in Geneva. 

Finance Minister, Calle Schlettwein, tabled his mid-term budget review. In a surprise move, the Ministry of Mines and Energy abolished the 20 percent black economic empowerment clause for mining companies and 5 percent black ownership. Inflation continued to climb and stood at 4.8 percent in September (August: 4.4%), according to the Namibia Statistics Agency. The central bank, Bank of Namibia kept its repo-rate at 6.75 percent in October.

Land conference adopts important resolutions 

Despite a lot of scepticism and some boycotts, the second national land conference was attended by over 700 people from all walks of life. It took place in Windhoek from 1 to 5 October. President Hage Geingob personally attended most sessions and also said that white Namibians were “safe and welcome” in the country and “should not feel guilty” for past racial atrocities during colonial times. 

The main topics were rural and urban land reform valuation and taxation of land and claims to ancestral land lost by some population groups during the German and South African colonial times. It was decided to abolish the willing seller, willing buyer farm acquisition principle, to regulate sizes of commercial farms and that owners should own a single farm only. Multiple farm ownership will be abolished. Those who lost land under colonial rule are to be regarded as priority for resettlement at a ratio of 70:30 – meaning that people of these language groups should make up 70 percent of resettled beneficiaries and others 30 percent. 

Foreigners may not own farms but can lease them. However, since nearly 47 percent of the Namibian population now live in urban areas, foreigners may not own urban land and no residential properties, only business properties from this point forward. A cut-off date will be announced in due course. In addition, the government will revive the rent control ordinance of 1977 and appoint a rent control board to re-introduce control of rentals. This system was in place until 1991 but was then abolished. This will be done to regulate housing costs in Namibia, as costs are currently exponential. 

Russian business tycoon leases farms

Russian businessman, Rashid Sardarov, has bought at least four farms from their owners for N$43 million (about 2.6 million Euros) and donated them to the Namibian government in order to lease them for 99 years. This deal was concluded a few days before the second national land conference but only became known when a local newspaper reported about it on 24 October. 

Land Reform Minister Utoni Nujoma, told reporters during a press conference at the end of October that the agreement with the Russian was done in accordance with Namibian laws. Opposition parties and civil rights groups want to sue the government in the High Court about this deal. “Our ancestral land was sold off to a foreigner,” criticised Usutuaije Maamberua, a Herero-speaking Member of Parliament.

Sardarov’s Swiss registered company Comsar SA bought the first farm in 2011 near Dordabis east of Windhoek. He had a lavish hunting lodge constructed there mainly for Russian and East European trophy hunting tourists. Sardarov now wants to develop the farms into a game reserve and enlarge the hunting lodge facilities.

Finance Minister tables budget review

Namibia’s government will remain within its spending means of N$58.4 billion (about 3.501 billion Euros) for this financial year. However, some ministries need additional funding totalling N$1.8 billion (around 108.4 million Euros), which could be allocated to those ministries due to savings and unspent funds. The national broadcaster NBC, of which the staff went on strike for four days at the end of September, will receive N$95 million (about N$5.7 million Euros) to pay for urgent expenses and a six percent salary increase for fulltime staff. In his mid-year budget review speech in Parliament on 24 October, Finance Minister Calle Schlettwein, said that Namibia’s economy could grow around 0.7 percent this year, mainly due to mining. 

Schlettwein also tabled a draft law to protect bank deposits of clients should a bank go bankrupt. Once adopted by Parliament, the new depository law will guarantee bank clients a certain amount of their savings. Recently, the government’s SME Bank went into liquidation, due to misappropriation of funds.

Mining Ministry abolishes empowerment clauses

Mining Minister Tom Alweendo has informed the Chamber of Mines this month that the government has abolished a requirement for mining and exploration companies active in Namibia to render five percent ownership to companies belonging to previously disadvantaged Namibians. Another requirement, having at least twenty percent of managerial positions in these companies filled by previously disadvantaged Namibians, was also abolished. Both requirements were introduced in 2015 and were regarded as not being investor-friendly. 

“Mining Minister Tom Alweendo has withdrawn these requirements as they were not practical, and retrogressive,” said Zebra Kasete, president of the Chamber. 

High-ranking visitor from Venezuela 

Venezuela’s Deputy-Foreign Minister Yuri Pimentel, came to Namibia for a three-day official visit in October. Pimentel discussed topics of common interest, among them mining and the oil sector. Pimentel noted that Venezuela was interested to exchange experiences with Namibia’s construction sector. 

N$95 million for international airport upgrade

The Finance Ministry has released N$95 million (about 5.7 million Euros) to the Namibia Airports Company (NAC) to carry out urgent renovations at the arrival and departure halls of the Hosea Kutako International Airport. The airport will be examined in November by the ICAO (International Civil Aviation Organisation). 

Gondwana tourism company opens new lodge 

Gondwana’s latest tourism lodge, The Desert Grace opens on 1 November to welcome tourists at the eastern Namib Desert in 24 luxury rooms each with a splash pool. This lodge will cater for the upper price segment - for those who want to relax off the beaten track, surrounded by breath-taking desert scenery. 

The new lodge of Gondwana Collection Namibia, "The Desert Grace".

Germany’s electronic Audi tested in Kalahari

Namibia this month stepped into the international lime light once again when motoring journalists from all over the world were invited to test the new Audi E-tron Quattro electric prototype vehicle. Test drives took place in Namibia’s Kalahari Desert near the Bitterwasser gliding lodge. The new SUV (sport utility vehicle) offers a fully electric all-wheel drive system and has two electric motors.

The Audi e-tron quattro prototype was tested in Namibia’s Kalahari Desert. Photo copyright: Audi Germany

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