Losing Out on Domestic Investment?

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By Wezi Tjaronda WINDHOEK Experts in the field of economics will converge on Windhoek next month to assess whether foreign direct investment (FDI) in Namibia has been promoted at the expense of domestic investment. Although FDI is a major stimulus to economic growth in developing countries, there are concerns that FDI in Namibia has been promoted at the expense of domestic investment. In an attempt to lure foreign direct investment in Namibia, the county promulgated the Foreign Investments Act and offers a number of incentives. While this is the case, it is believed that Namibia relies a lot on FDI while it could use its domestic savings by translating these savings into productive investment, which could lead to higher economic growth, said the bank’s acting Head of Research, Ebson Uanguta. The assessment of FDI versus domestic investments in Namibia will be the theme of this year’s Bank of Namibia annual symposium, which will take place on September 20. Yesterday, the bank launched a website where the public and interested participants to the symposium can register and get other relevant information about the upcoming event. Uanguta told the media at the launch that FDI not only allows the transfer of technology and promotes competition in the domestic input market, but also enables employee training in the course of operating new businesses. He said Namibia’s challenges of unemployment, income inequality and poverty could be solved if the country attracted sufficient FDI and domestic investment, which drive growth. Uanguta said this situation called for a policy change towards focusing on improving the overall investment climate for all capital – domestic and foreign. The symposium will look at the experiences of developing countries with regard to FDI and domestic investment with reference to Namibia, do a cost benefit analysis of the FDI regime in the country and also put strategies in place that the country can adopt to lure FDI and encourage domestic investment. The bank has invited three speakers, namely, Unam’s Professor Sylvanus Ikhinde, University of Botswana’s Dr Oluyele Akinkugbe and independent economist Robin Sherbourne. Manager Corporate Communication Jerome Mutumba said the bank has already been inundated with requests and suggestions to ensure that the event is sustained, and the website was developed in response to these suggestions. The website www.bon.com.na aims at sensitising and enabling people that are interested in attending the event to register online. Mutumba said the bank has so far sent out invitations to selected members of the public but those that want to participate could also register online. The bank has been organizing the annual symposium since 1999. Some of the themes of past symposiums were Optimal Financing Structure for Namibia, Raising Investment and Growth in Namibia, Poverty, Income Inequality and Economic Development in Namibia and Challenges of Monetary Policy in the Common Monetary Area.