MarketLine Blog

Namibia: NEEEF is not the solution. New policy would be bad for the economy

NEEEF is not the policy the Namibian economy requires at present. Businesses, however big or small, would be required to be at least 25% owned by people described as ‘disadvantaged persons’ and occupy half of board and management positions. The suggested legislation appears to be an effort towards what amounts to forced redistribution of wealth and has similarities with the land redistribution attempted in Zimbabwe. Ownership is not the only target: spending and investment would be subject to new controls too. Problems regarding implementation are legion. Given approximately 40% of the population are unemployed and a similar number live in shacks, finding people who have been locked out of the system but are capable of running a business is a very difficult task. Critics describe the plan as being unworkable and capable of producing new problems.

Rather than attempting to impose a populist policy to move wealth to the disenfranchised, the government should change it to solve the underlying problems society and the economy suffers from. Literacy rates and overall standard of education would be a good place to start – achieve success here, and a more formalized jobs market could be created. The economy is suffering due to slowdowns in construction, agriculture and fishing. Reversing the contraction witnessed of late in these industries would make the task of creating a structure which reduces poverty much easier. Much could be achieved from the side of the government. The role of state-owned monopolies, for example, makes transparency harder. The Harambee Prosperity Plan would appear, at least on the surface, of being a much better examination of the problems than NEEEF.

Leave a comment

*Required fields. We will not publish your email address