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Political stability will spur foreign investment – Business Monitor International analysis

Political stability will spur foreign investment – Business Monitor International analysis

Business Monitor International (BMI) Research, a unit of the Fitch Group, is of the opinion that President Hage Geingob’s sizable victory at Swapo’s November elective congress, has consolidated his leadersip. BMI released it forward view of the economy and the government’s role earlier this week.

According to the firm’s analysis, Geingob’s victory will give him the political space necessary to moderate populist social and economic reforms, tempering investor caution toward Namibia.

“Geingob’s victory at the party conference will increase policy continuity and boost investors’ confidence in Namibia’s business environment. Indeed, we expect gross fixed capital formation growth to increase from 2% in 2017 to 6% in 2018, supporting real GDP g owth to recover from 0.2% in 2017 to 3.5% in 2018,” BMI said.

“The government has committed to several infrastructure projects, which will be executed through public private partnerships under the Harambee Prosperity Plan. Amongst them, the construction of several biomass-fuelled power plants in Otjiwarongo, Otavi and Arandis will increase the country’s electricity generation capabilities and spur foreign direct investment in Namibia.”

Furthermore BMI said that Geingob’s comfortable victory over the left-leaning ‘team SWAPO’ faction will enable him to moderate the more radical provisions of the proposed New Equitable Economic Empowerment Framework (NEEEF) in 2018, tempering investor caution and helping to sustain Namibia’s economic growth.

Some of the more radical measures included in the framework require that businesses sell a mandatory 25% share to previously disadvantaged Namibians.

“These factors have led us to upgrade our Short-Term Political Risk Index (STPRI) for Namibia from 65.4 to 67.5, positioning the country amongst the top ten countries in Sub-Saharan Africa. More specifically, we raised the policy continuity component from 75 to 80, and the policy-making process component from 63.3 to 66.7,” BMI stated.

Meanwhile, BMI noted that the draft NEEEF bill, which was presented to Parliament in April 2016, targets the high levels of inequality, “indeed, according to the Food and Agriculture Organization of the United Nations, 10% of the population still controls 90% of the economy.”

“The draft bill was backed by the more radical factions of SWAPO, including Prime Minister Saara Kuugongelwa-Amadhila and influential former president and founder of Namibia, Sam Nujoma,” BMI added.

Similarly, the more radical elements of a proposed land reform are also unlikely to move ahead. The government had committed in 1991 to a land reform aiming to buy 4 3% of the country’s land and redistribute it to so-called previously disadvantaged persons by 2020, the research firm added.

“In recent quarters, Geingob had faced increasing pressure from the more radical members of the SWAPO party to speed up the process of land redistribution through expropriation rather than through the traditional willing buyer/willing seller model. Many have said that the model has failed to adequately address the problem and at present, 247 agricultural farms totalling 1.2 million hectares are still owned by descendants of German and Afrikaner settlers. However, as the president consolidates his power, we do not see these reforms taking a radical turn, with the risk of expropriation remaining very limited,” BMI said.

Currently BMI is of the view that Namibia is one of the most stable countries in the region.



About The Author

Musa Carter

Musa Carter is a long-standing freelance contributor to the editorial team and also an active reporter. He gathers and verifies factual information regarding stories through interviews, observation and research. For the digital Economist, he promotes targeted content through various social networking sites such as the Economist facebook page (/Nameconomist/) and Twitter.

Following reverse listing, public can now acquire shareholding in Paratus Namibia


20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.