Select Page

A new wave of BRR policies at a time when the government is broke

The problems with the NEEEF Bill are manifold. On top of the fact that is was not thought through very well, it comes at a time when the government is battling to give credibility to its own development undertakings and commitments. This adds to the rising perception that the state is at the end of its capability and that it must now force the private sector to give away goods since the government itself is no longer able to paper over even the most pressing development priorities.
In my view, the intention behind the NEEEF Bill is to mobilise long-term savings to promise business ownership to a group of unsuspecting people who believe they will get something for nothing. In short, it is pension fund and life insurance fund driven. There will be no real private sector investment unless companies simply give away one quarter of their equity and hope for the best.
The NEEEF Bill has already opened a new chapter on nepotism and favouratism, a byword for legal bribery. I am approached by the week by cheerful prospective shareholders all asking me which companies must they approach for an ownership deal. Then I get a wink and a conspirational grin, implying “we are connected and we have access to funding.”
I foresee many companies will pre-empt the promulgation of the bill, having heard many conversations where NEEEF compliance strategies are discussed. I therefore suspect that a not insignificant number of companies and /or smaller businesses will go the 25% equity route for previously disadvantaged persons, long before it actually becomes law. But I am also exposed to other views and there are many companies, the owners and managers of whom have stated to me personally that they will test this legislation in the courts for constitutionality. In a sense, this means that this bill will divide and drive the private sector into two camps, compliants and opponents.
Those that want to comply, will probably seek their BRR partners out themselves and invite them to discussions while those against, will pursue all avenues, short of force, not to dilute the value of their existing shareholders.
Perhaps the biggest weakness in the philosophy of the framework is that it will depend on long term savings. These, I hear frequently being referred to as “national savings.” Now that is as big a fallacy as one can get. Pension fund monies and the proceeds from life insurance policies, ultimately belong to private individuals.
Of course, it is easy when one controls the legislature to squash through any law imaginable, but there must be at least a few individuals with common sense in our patch of sand. It is easy to drive a cause on popular appeal when you promise the would-be beneficiaries something for nothing. But these motives are all based on illusions, both of those who punt the NEEEF Bill and those who believe they will become rich overnight.
At the end of this process, there will only be one class of winners, the mushroom style new investment fund managers and the myriad of so-called Special Purpose Vehicles that have sprung up since Regulation 29 and the NEEEF Bill became the new driving force for “repatriating national assets.”
This sentiment is so pervasive and so wide-spread, I shudder at the thought of thousands of existing pensioners and future pensioners, when some day someone has to break it to them: There is no more money!
I believe for the NEEEF Bill to work, it first and foremost has to be honest. At this point, it is not. And then, it must contain tangible incentives to business to invite in a new generation of co-shareholders. And the most appropriate incentives for business is tax concessions. For instance, if a business owner sells 25% to one person or a group of previously disadvantage people, then that business only pays 25% income tax. Now, that will be a powerful incentive.
Also, to all the new private equity investors, (which they do with other people’s money), I can only offer the words of a wise sage: “Show me the liquid investments in Namibia. There are no local liquid investments” In essence, this captures the single biggest problem with NEEEF. Everybody likes to believe there will be this never-ending stream of future dividends. That is utter and total hogwash and only demonstrates the inexperience and lack of knowledge of those who believe anybody can run a business.
Is there any would-be shareholder out there who is prepared to forfeit his own salary when his business requires re-investment or re-capitalisation? Sure, we just borrow someone else’s pension and use it for ourselves, then everything is fine.

About The Author

Daniel Steinmann

Educated at the University of Pretoria: BA (hons), BD. Postgraduate degrees in Philosophy and Divinity. Publisher and Editor of the Namibia Economist since February 1991. Daniel Steinmann has steered the Economist as editor for the past 32 years. The Economist started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at It is the first Namibian newspaper to go fully digital. He is an authority on macro-economics having established a sound record of budget analysis, strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored hundreds of journalism students as interns and as young professional journalists. From time to time he helps economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. Since October 2021, he conducts a weekly talkshow on Radio Energy, again for a lay audience. On 04 September 2022, he was ordained as a Minister of the Dutch Reformed Church of Africa (NHKA). Send comments or enquiries to [email protected]