Why Doing Business in Namibia?

Type of Government / Political Development

Prior to the First World War, Namibia was a German Colony which was known as “German South-West Africa”. At the outbreak of the war, South Africa (then a British territory) also declared war on Germany, and its forces invaded the Territory. The German Forces finally surrendered on 9th July, 1915 and Martial Law was declared over the entire country, where after it was known as “South West Africa”. In terms of the Indemnity and Withdrawal of Martial Law Proclamation, (Proclamation No. 76 of 1920) dated 31st December, 1920, Martial Law was withdrawn from and after the first day of January, 1921. Civil law thereafter prevailed in South West Africa, with the country being administered by the Government of the Union of South Africa. This was in terms of a mandate conferred upon “His Britannic Majesty for and on behalf of the Government of the Union of South Africa” in accordance with Article 22, Part 1 (Covenant of the League of Nations) of the Treaty of Peace with Germany signed at Versailles on the 28th June, 1919.

This position continued until 1990, with ever-increasing pressure being put on the South African Government to grant independence to South West Africa. Finally free and fair elections were held in which all members of the population participated for the purpose of electing a Constituent Assembly, whose duty was to draw up a constitution for the future Namibia. The Constitution was agreed, and finally Namibia attained its independence on 21st March, 1990.

The Constitution of Namibia is the supreme law of the country. In terms thereof a sovereign, secular, democratic and unitary State is founded upon the principles of democracy, the rule of law and justice for all. It entrenches the protection of fundamental human rights and freedoms and defines the powers of government. An independent judiciary is vested with the responsibility and authority to uphold and enforce the rights framed in the Constitution.
Legal System

Namibia while being a common law country has as its core Roman-Dutch law created by glosses and commentaries to the Roman law texts adopting Roman law to the customary law of Holland. After the First World War when South Africa was given the mandate over the former German colony of South West Africa by the Treaty of Versailles, the common law, being created by precedent, as applied in the Cape Province of the then Union of South Africa (Roman Dutch Law) was introduced as the common law of the mandated territory with effect from 1st January, 1920. English law has also had a bearing, mainly on commercial law. Upon the country attaining its independence on 21st March, 1990, the Constitution of Namibia preserved all laws in force immediately before the date of independence until repealed or declared unconstitutional by a competent court. Consequently many laws passed by the South African legislature prior to independence still apply and there are areas of statute law in which no or minimal differences exist between the laws of the two countries.
Currency and exchange control

Until September 1993, when Namibia introduced its own currency, the Namibia Dollar (N$), the South African Rand was also the currency of Namibia. The Rand still remains legal tender, and the two currencies are traded at parity subject however to a service charge of 10% levied by South African Banks when the N$ is converted to the South African Rand in that country. After independence Namibia remained part of the Southern African Rand monetary area (known as “the Common Monetary Area” or the “CMA”) which comprises Namibia, South Africa, Swaziland and Lesotho, and the exchange control regulations pertaining to that area are applicable to Namibia. There is no intention to depart from the CMA.

The basic purpose of exchange control is -

• to ensure the timeous repatriation into the Namibian banking system of all foreign currency acquired by residents of Namibia, whether through transactions of a current- or a capital nature; and
• to ensure that foreign currency outflows are for legitimate purpose only in the best interest of Namibia as a whole, and less for the individuals concerned.
• Exchange Control is administered by the Bank of Namibia under powers delegated to it by the Minister of Finance and the Treasury, in whom responsibility for this matter is vested.

Natural resources & Gross Domestic Product

Mineral resources, such as diamonds, gold, uranium, copper, tin, lead and zinc as well as marble and granite are abundant and have formed the basis of the country’s commercial economy. Based to some extent on German Colonial Mining legislation, mineral rights are owned by the State and not by private persons or bodies but are passed on to them for prospecting, exploration and mining in the form of licenses grants or concessions. The applicable legislation is the Minerals (Prospecting and Mining) Act which came into operation on 1st April, 1994.

Other statutes may also be applicable, such as the Diamonds Act, 1999. The Petroleum (Exploration and Production) Act provides for the reconnaissance, exploration, production and disposal of, and the exercise of control over petroleum.

The fishing industry, tourism and agriculture are also major contributors to the country’s economy.