Ndaambe Haikali, a banker from Namibia, very kindly sent me a notice that is circulating on paper (not on the internet). It's called "Have your say on TESEF" and invites citizens to submit comments before the 15th of July this year. They have committed to launching this programme sometime next year.
The document makes for interesting reading because it tells us (those of us who don't know that much) a fair amount about the Namibian economy. For instance 75% of the national productive assets are owned by 25% of the population, foreign multinationals and absentee foreign owners. When you read through the document you'll get a sense that TESEF (Transformation of Social and Economic Empowerment Framework) is very much about trying to give Namibia back to the Namibians. It is this process of Namibianisation that underpins the whole strategy.
Namibianisation in itself is nothing new – it's been around for many years and was mostly felt in the allocation of fishing rights. It is defined as "a process to encourage the active and greater involvement, participation and benefit of Namibians - especially of Namibians previously excluded (during the Apartheid regime) from the fishery sector. Incentives are offered to companies that are at least 51 percent owned by Namibians (e.g. quota levies, long-term fishing rights)." This same concept is a constant across other charters – the Namibian Financial Sector Charter being one example.
The drafters have followed the basic guidelines of South Africa's broad based BEE but have set a longer period to achieve these targets – a total of 35 years. What isn't very clear from this document is whether the time period is 35 years or whether the cut off date is 2035. Anyway by 2035 the TESEF process should have produced 60% of the population as middle class, 20% upper middle class and 20% lower middle class.
35 years is a long time - a regime change could negate the entire process.
TESEF has six elements
1) Ownership
Target is 80% in the period 2029 – 2034. 20% must be achieved in the next 5 years.
2) Management
Very similar to South Africa. The difference here is that I sense that Namibianisation includes ALL Namibian citizens, not specifically black ones.
3) Employment equity
They have suggest a target of 30% of production costs to be spent on labour. Not much else is explained here but at face value this is a scary target. Hopefully they'll tie this in with skills development to try and create a skilled labour force.
4) Entrepreneurship development
This incorporates preferential procurement. At least 30% of procurement should be allocated to businesses owned by PDIs (yes they use that term too and define it as "victims of former apartheid policies") within the next five years (probably up to 2016).
As an aside - the biggest problem with South Africa's preferential procurement is that it wants local procurement but there is no real harmony between this and import duties and the like. In other words local production should be used even if it costs more than importing the same product. In a consumer market this just won't work. If Namibia is to achieve a similar goal then it must try to encourage value-added production. I know that the Fishing Rights programme has tried to address this.
5) Human Resource and Skills Development
A target of 2% of turnover for skills development is very high. The only SA BEE code that I think that was properly thought out is the skills development code. The emphasis on learnerships has the greatest potential for the economy. There is talk of a Training Levy in Namibia, which is probably similar to our Skills Development Levy.
6) Community development
No transformation or social upliftment programme can exist without this. It looks like they are going to make this a tax (2% of a wealthy individual's estate should be invested in community development) for other corporates it is 2% of profit (the type of profit is not specified). That is not a good idea – community development is a voluntary thing and should stay like that. The introduction of BEE has seen a lot more giving in South Africa than before. Corporates are really getting behind this. I had a little debate with Kevin (holding onto confidential documents) Lester yesterday. He is in two minds about this tax – referring to the Lotto money being distributed. I am completely anti the idea of a government distributing money to charities. Especially our esteemed government.
The drafters have followed the basic guidelines of South Africa's broad based BEE but have set a longer period to achieve these targets – a total of 35 years. What isn't very clear from this document is whether the time period is 35 years or whether the cut off date is 2035.
Posted by: Tibia Gold | October 15, 2010 at 07:49 AM
The emphasis on learnerships has the greatest potential for the economy. There is talk of a Training Levy in Namibia, which is probably similar to our Skills Development Levy.
Posted by: ffxiv gil | October 18, 2010 at 04:57 AM