World News

Namibia to make white-owned businesses sell 25 percent stakes to blacks

WINDHOEK (Reuters) - President Hage Geingob has said Namibia will make it mandatory for white-owned businesses to sell a 25 percent stake to blacks, calling the country one of the most unequal in the world.

A draft bill on the Namibia Economic Empowerment Framework (NEEF) was expected to be tabled before his cabinet soon, Geingob said in a speech on Wednesday.

Whites make up only about 6 percent of Namibia’s population of 2.4 million, but overwhelmingly dominate business ownership.

Geingob said Namibia had not seen significant transformation in the 27 years of independence from apartheid South African rule.

“The majority of Namibians remain structurally excluded from meaningful participation in the economy and as we established earlier, inclusivity ensures harmony and exclusivity brings discord,” Geingob told the country’s lawmakers.

“We require the support of all Namibians to fix the obvious and dangerous flaws in our social structure.”

Last year, rating agency Fitch cited the empowerment plan as one of the reasons it had downgraded Namibia’s economic outlook from stable to negative, saying the policy would scare away investors who might not be willing to cede stakes in their companies.

The Construction Industries Federation (CIF), the Namibia Chamber of Commerce and Industry and the Namibian Employers Federation have all expressed concern about the empowerment plan.

“Any empowerment initiatives should not lead to distinctions based on race, as it would negatively impact race relations,” The CIF, which has a membership of over 470 companies, has said.

“Instead, poor Namibians, regardless of racial origins, should benefit through increased focus and monitoring of already existing empowerment efforts.”

The government of neighbouring South Africa has a regulation that at least 26 percent of the ownership of mining companies be in black hands. Companies say they should be considered to have met the rule even after black owners have sold their shares, which has become a bone of contention.

In Zimbabwe, the government is considering amending black empowerment laws that aims to transfer majority shares from foreign-owned firms to black Zimbabweans after it was blamed for deterring investment.

Editing by James Macharia and Andrew Roche