Unease of doing business costs Namibia millions

by Toivo Ndjebela

Unease of doing business costs Namibia millions

 

Windhoek

Unease of doing businesses in Namibia – capped by excessively lengthy and complex processes of registering a business – is a big turnoff for huge international investors who would have created jobs and beefed up state revenue through millions in taxes, experts say.



This is a slap in the face of President Hage Geingob’s declared war on poverty, which aims at stimulating jobs and growing the economy, amongst other targets.

To ensure that this burdensome process is a thing of the past, government has jetted in experts from Singapore to replicate the success story of their country, which for 11 consecutive years has led the World Bank overall charts for ease of doing business.

Namibia is currently 164th out of 198 nations ranked in terms of overall ease of doing business, a ten-point drop from its 154th ranking in 2015.

The Singaporean team, who have been working with the Ministry of Industrialisation, Trade and SME Development since their first visit to Namibia last year, identified a litany of stumbling blocks which they say needed to be rectified urgently, or the country will slip further down the ranks. Bad ranking scares away potential investors.

Namibia, through the Harambee Prosperity Plan, aims to become Africa’s most competitive economy by 2020 – but the visiting experts, from Singapore Cooperation Enterprise (SCE), say this would be a pipe dream unless the country loosens the shackles of doing business, including registration of companies.

The Singaporeans were shocked by the volumes of paperwork required to register a company in Namibia – a sharp contrast to the one-stop-shop system used in their country where a click of a finger is enough effort to effect huge inflows of foreign investment.

They observed that registering a business in Namibia is too bureaucratic, which might have turned away thousands of potential investors.

“The problem we have encountered in Namibia is that there’s too much paper-based administration of this process,” Kim Leng Tan, a senior consultant at SCE told New Era yesterday.

Tan cited requirements such as buying revenue stamps from the Ministry of Finance – as payment for registration fee – and too many supporting documents needed, as some of the issues that makes it difficult to finish registration within a reasonable time.

“It also involves a lot of travelling because registration of business takes place at the ministry of industrialisation, while revenue stamps are bought from the ministry of finance and one would have to go to Social Security Commission to register employees for the new company,” he observed.

Tax compliance certificates also have to be obtained from Inland Revenue offices, while the ministry of home affairs is responsible for work permits and business visas – among other complexities.

“When you put all these processes together, it becomes less attractive for foreign investors because the process is too long and in a competitive global market such investment could be snapped away by another country,” he said.

Economies in Sub-Saharan Africa have an average ranking on the ease of doing business of 143. Mauritius has the region’s highest ranking, at 32. Rwanda has its second highest (62), followed by Botswana (72) and South Africa (73).

Tan said Namibia would need massive political will to change the status quo. “In Rwanda, President Paul Kagame showed a lot of political leadership on how easily the country should do business. It doesn’t therefore surprise me that they are ranked second in Sub-Saharan Africa,” he told this reporter.

Asked on what exact solutions for Namibia SCE was working on, Tan said they are working towards a one-stop-shop solution for the country and would implement what is called the Integrated Client Services (ICS) at the industrialisation ministry.

“This is aimed at producing two key results, which are quality services by the ministry to investors and an online e-service platform which allows for registration to be made online, as is done in Singapore,” he said.

“We want to make sure Namibia becomes the prime investment destination in the region. But in order to succeed, this process would need the support of all stakeholders and ministries to coordinate these efforts.”

The Singaporeans have now come up with an action plan, which they say would require about 18 months to fully complete.

Leng said ease of business would lead to the creation of more jobs for Namibians, increased revenue for government and attraction of quality investment.

“The good thing about Namibia is that you have a lot of land and many young people – meaning you have enough energy to build this economy,” he concluded.

 

 

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