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Labour Market, Job Reintegration, Setting Up a Business, Bank- and Credit-System
While most Namibians are economically active in one form or another, the bulk of this activity is in the informal sector, primarily subsistence agriculture. In the formal economy, official estimates of unemployment range from 30 % to 40 % the work force. A large number of Namibians seeking jobs in the formal sector are held back due to a lack of necessary skills or training. The government is aggressively pursuing education reform to overcome this problem.
Namibia's largest labour federation, the National Union of Namibian Workers (NUNW) and the Namibian National Teachers Union (NANTU) and other represent workers organised into seven affiliated trade unions. NUNW maintains a close affiliation with the ruling SWAPO party.
The Namibian economy has a modern market sector, which produces most of the country's wealth, and a traditional subsistence sector. Namibia's average GDP per capita is relatively high among developing countries but obscures one of the most unequal income distributions on the African Continent. Although the majority of the population engages in subsistence agriculture and herding, Namibia has more than 200,000 skilled workers, as well as a small, well-trained professional and managerial class.
The country's sophisticated formal economy is based on capital-intensive industry and farming. However, Namibia's economy is heavily dependent on the earnings generated from primary commodity exports in a few vital sectors, including minerals, livestock, and fish. Furthermore, the Namibian economy remains integrated with the economy of South Africa, as the bulk of Namibia's imports originate there.
Mining contributed 13 % of GDP in 1999, of which diamond mining activities represented 9 %. Diamond production totaled 1.5 million carats in 2000, generating nearly US$ 500 million in export earnings.
Other important mineral resources are uranium, copper, lead, and zinc. The country also is a source of gold, silver, tin, vanadium, semiprecious gemstones, tantalite, phosphate, sulfur, and salt.
During the pre-independence period, large areas of Namibia, including offshore, were leased for oil prospecting. Some natural gas was discovered in 1974 in the Kudu Field off the mouth of the Orange River, but the extent of this find is only now being determined.
Although Namibian agriculture contributes only 12 % of Namibia's GDP, about 70 % of the Namibian population depends on agricultural activities for livelihood, mostly in the subsistence sector. In 2000, agriculture products constituted roughly 10 % of total Namibian exports.
In the largely white-dominated commercial sector, agriculture consists primarily of livestock ranching. Cattle raising is predominant in the central and northern regions, while karakul sheep, goat, and ostrich farming are concentrated in the more arid southern regions.
Subsistence farming is confined to the "communal lands" of the country's populous north, where roaming cattle herds are prevalent and the main crops are millet, sorghum, corn, and peanuts.
The clean, cold South Atlantic waters off the coast of Namibia are home to some of the richest fishing grounds in the world, with the potential for sustainable yields of up to 1.5 million metric tons per year.
Commercial fishing and fish processing is becoming the fastest-growing sector of the Namibian economy in terms of employment, export earnings, and contribution to GDP.
In 2000, Namibia's manufacturing sector contributed about 20 % of GDP. Namibian manufacturing has historically been inhibited by a small domestic market, dependence on imported goods, limited supply of local capital, widely dispersed population, small skilled labor force and high relative wage rates, and subsidized competition from South Africa. As of early 2003, AGOA has brought more than US$ 200 million in investment and over 4,000 jobs in the textile industry.
In Namibia there ist no specific job integration program. There is only a policy guideline published by the Ministry of Labour called Careers in Namibia 2000-2001, this the second Namibia-own career guide. The guideline includes things like how to apply for a job, how to prepare for an interview and how to write a Curriculum vitae.
There is nothing like financial support during job seeking either from the government or any parastatal or private company. The only financial support you can get is from you family if they can afford that as they might have been paying your school fees etc.
There are a lot of Insurance Companies in Namibia but none of them is responsible for job seekers. As there is no Insurance Companies responsible for job seekers.
Some of the companies, private, parastatal and governmental are having application forms that one has to fill in when applying for a job with that specific institution.
Application is accompany by application letter with the curriculum vitae of the individual. Copies of the certificate and diplomas acquired. Some companies requires passport photos and reference letter from you previous employee or from the school or from the last institution you have been studying.
Curriculum Vitae means the personal history. A CV is about the personal educational background or history. Therefore a good CV will list the relevant educational and personal achievements (e. g. cultural, sports) and institutions where these were obtained.
Always write in full short sentences rather than long paragraphs. A CV is a summary not a long report. Always try to contact the persons you like to use as reference beforehand. It might be that an interested prospective employer contacts them. Include the position of the person you have indicated as reference.
Write and type your CV neatly, make sure there are no spelling mistakes and typing errors in your CV. It should be accompany by certified copies of certificates and other relevant documents. Keep a few copies for yourself.
Topics to be included in the Curriculum Vitae
Just as necessary to thoroughly plan your career in advance, it is also essential to be prepared for the interview, just like any job seeker. The interview is the first direct contact with the prospective employer, and therefore is of outmost importance to make a very good impression. There are couples of step and guidelines that can be taken into consideration in for one to have successful interview.
An Exchange of Information
An interview is an opportunity to make impression to get your foot in the door. The prospective employer might like to find out more about you and you about the job. So very good impressions is very important. Therefore take care of the following:
When the time for asking question is right show interest in the job. Ask question that revolve around the tasks, reporting relationship or training possibilities.
How To Be Prepared
Be realistic about yourself and present your experiences and attributes effectively. Do some research on the company ministry or the organization before the interview. Know what the jobs you have apply for entails and how it fits with your educational background/ experiences. Always carry your CV with when going to an interview.
Market Yourself
Possible Questions Asked In The Interview
At The End Of The Interview
Quickly review if you have covered all the critical points with your questions silently in your mind. Have your questions all been answered. have you presented all the necessary information about yourself?
If the interviewer does not explain, ask him/her what the next stage in the selection process will be. Ask when you can expect a response from the organization, if asked the possible means of communication/medium.
Afterwards thank the interviews for their time. Remember to keep eye contact.
The positions are being advertised in all types of media starting with the radio to newspapers, journals and public notice at shopping centres etc.
Advertising for Jobseekers in all the radios is free. Only the newspaper that it might cost the minimum of N$ 20 to N$ 100 depending on how much information is given and the size of the advertisement.
Since 1982 Jobs Unlimited has proven itself to be the largest employment agency in the Namibian market. Job Unlimited have placed over 15 % of the tax paying population. Job Unlimited keeps a constant eye on the market needs. A Computer training center has been added that offers affordable and personal training.
Job Unlimited is one of the popular employment agency in Namibia, which can boasts about 150 job listings a month, 700 clients and about 15,000 applicants waiting to be placed at any one time.
They also assist in the following:
Contact
Tel.: 061 – 23 31 83
Fax: 061 – 22 33 52
P.O. Box 3157 Windhoek
E-Mail:
jobs.unlimited@iafrica.com.na
Most fess are paid by the employee after the person got the job.
Information could be obtained from the following institutions in the country:
Ministry of Trade and Industry
The Ministry of Trade and Industry does not organise training courses directly, but this depends on the requests coming from the public indicating in which areas they would like to have training on. The ministry then upon receiving this request, contacts institutions like for example GTZ for funding. They mainly fund the consultants who will conduct the training. Adverts are put on the newspapers and each can apply. Based on the number of applicants a venue and the number of participants is discussed with the consultants and other organisers.
UNDP/GEF Small Grant
UNDP/GEF Small Grant for small communities hosted by the Namibia Nature Foundation (NNF) and the UNDP Windhoek. The training activity is part of the project proposal and funded fully by the donors. They train the community in writing project proposal and in identifying their needs in setting up business which can benefit the community in that area.
Small Business Credit Guarantee Trust
There is a small business credit guarantee trust (SBCGT), a joint venture trust between the government of Namibia and the private sector. This trust is aimed at assisting existing and new small business entrepreneurs with security to access commercial loans to start or expand their businesses. The trust only gives a guarantee for a small business to access credit, but it does not provide loan to the people itself.
Equipment AID FUND
Equipment AID FUND (EAF) is a programme supporting the Namibian Industrial sector by providing a means by which industrialists are able to import new machinery and equipment from Spain by just paying in N$ in Namibia. The Embassy of Spain and the Government of Namibia support this programme. The importer decides on what type of machinery and or equipment to import and submits the application to the Ministry of Trade and Industry at the Directorate of Industrial development. Committee decides to approve the import transaction and exchange rate Euro/N$ is fixed. The importer pays in N$ before customs clearance of the equipment.
SME Program
There is a programme for SME feasibility studies and business plan support programme whose aim is to spear head the development of entrepreneurship and industrial culture especially at SME level in order to facilitate the creation of job opportunities and more income distribution in Namibia.
The objective of the programme is the promotion and expansion of resource based and value added activities, promotion of entrepreneurial thinking and skills development and generation of wider employment opportunities especially among the previously disadvantaged groups of the population.
Priority areas are:
The only cost involved as far as training is concerned, usually is that of the consultants, which includes the cost for the venues and materials needed for the course. Private institutions do charge a certain fee, which is not constant across the board.
The cost involved for the SME feasibility studies is that to the consultancy divided as follows:
More information could be obtained from the Internet: http://www.grnnet.gov.na
Prior to independence, the role of small businesses in the economic development of the country was neglected. The sector was not considered important for its development. The establishment of larger businesses was encouraged and supported. Potential small business entrepreneurs were not given necessary support. The majority of small business entrepreneurs operated informally, most in the retail, trade and service sectors.
The challenge of independent Namibia is to overcome poverty and inequality. Poverty is related to unemployment and underemployment. In the context of limited growth of the formal labour force, self-employment and employment in the small business sector will have to absorb an increasing portion of total employment. Today, the small business sector has been recognized as a priority sector economic development, targeting objectives such as reducing employment and alleviating poverty. The importance of small businesses is also recognized by donor agencies and training institutions.
According to ILO (1994) there has been a growing number of small enterprises whose real size is unknown, and this is due to the informal way of their operation. In 1997, NEPRU estimated that there are about 20,000 small entrepreneurs in the country. A more recent study in two regions by the Ministry of Trade and Industry estimated that there are about 30,000 small enterprises operating in the regions.
Despite being a priority sector, and a considerable amount of discussion over the last six years, there is still a lack of a clear program of action for small businesses, especially at the regional level. Small business must be helped with issues such as technology transfer, access to finance, regulations, access to markets and skill just to name a few. The simple lack of small business statistics and the lack of regional comparisons often make it difficult to identify trends in the small business sector in Namibia. Research into the small business sector has generated a large number of documents and papers but only little empirical data. It is estimated that about 30 % of the workforce or roughly 160,000 people derive some form of employment and income from small enterprises (MTI, 1997). Furthermore, the small business sector provides full-time employment for about 60,000 people. The workforce increases by 16,500 people annually. Estimates of the SME contribution, the majority of which are small business, to GDP are difficult to obtain, but the contribution is less than 5 % (ibid, 1997).
It is also important to mention that the small business sector promotion is perceived as something that is socially necessary. Small business start-ups are driven by push and pull factors. In general push factors are results of crisis and economic reform, such as the downsizing of the public sector, and the commercialisation of privatisation of parastatals. Whereas, pull factors are basically business opportunities, a more conducive environment for private business in general and deregulations.
The estimate for the pattern of employment in the small business sector is 50 % in retail, 30 % in catering, 15 % in trade and service and 10 % in manufacturing. Traditional low turnover businesses are dominant in Namibia, and the proportion of manufacturing in comparison with neighbouring countries is low.
The share of manufacturing in the small business sector can be taken as an indicator of development. In 1994 MTI, Manufacturing Survey noted that 84 out of 274 (35) enterprises were small business that accounted for less than 6 % and less than 2 % of manufacturing turnover. A study carried out at the University of Namibia (SSD, 2000) revealed that 80 % of SMEs in the manufacturing sector surveyed have small business characteristics in terms of the definition. In the four Northern regions the share of manufacturing is at 36 % higher than in the rest of the country. The reason for the higher number is because of many businesses involved in the production of beer/liquor. In general the manufacturing sector plays a minor role in Namibia's economy, however the share of manufacturing in export is higher due to fish and meat processing. Very little diversification has taken place.
So far the MTI only managed to carry out two regional studies on SME in (Khomas and Four northern regions).
The dynamic role that small business play varies widely. For example in the four northern regions, small enterprises are not as significant in terms of employment, but are important in providing a flexible skilled production base which attracts large enterprises (basket and granary weavers, potters and oxcarts exported to South Africa, Angola and Europe).
Small enterprises in urban areas and particular concentrated around Windhoek, Walvisbay and Swakopmund have the highest growth potential. Rural enterprises are more informal and less visible and are generally underserved by SME support institutions, because of the higher cost of access to them. The use of modern Information Technology may help reduce these barriers. SME service provider information can, for example, be provided via the Internet. Also training could be accessed this way.
Several studies suggest that women are the majority owners of micro-enterprises in Namibia. Furthermore, it is reported that there is in general gender equality in terms of proportion between male and female entrepreneurs (MTI, 2000). But, the percentage of male owners in terms of business has always been indicated higher in most NAMIBIA documents. Less that 1 % of small business (registered businesses and according to the MTI definition) in Namibia is owned by women. In Namibia, women entrepreneurs are clearly disadvantaged.
Many organisations are found in society for various reasons. Because any society is to a greater or lesser extent arranged or structured according to laws, it follows that the organisation of a society cannot function in a haphazard way.
The business enterprise, as a specific type of organisation, is therefore also subject to this arrangement, and attains a legal form in which the business enterprise is structured. According to the definition of Small Businesses, any form of enterprise can be a small business if it meets the requirements of the definition.
In Namibia business enterprises mostly assume the form of sole proprietorship, partnership, companies, and close corporations. The following elements are the core distinctive aspects of the enterprises:
The Namibian legal system distinguishes between public and private companies. The name of a public company ends with "limited" (abbreviated as "Ltd", e.g. Namibia Breweries Ltd; the name of a private company ends with Proprietary limited (abbreviated as (Pty) Ltd, e.g. "Poly Press (Pty)Ltd".
Public companies must have at least 7 shareholders and private companies may not have more than 50 shareholders. There are other exigencies relevant to public and private companies, but it goes without saying that public companies are more suitable for large investments, with a complex structure, which needs to raise a lot of capital from the general public. Private companies are more suitable for middle size enterprises where the capital is provided in the first place by the stakeholder entrepreneur(s).
Under the public company, certain information must be made known to the public and this type of business is normally very capital intensive. There is a minimum of two directors.
Private companies do not have to make information available to the public and there is a minimum of one director.
Apart from public and private companies, there is also NGO, which could be established under Section 21 of the Companies Act and makes provision foir this type of business and is regarded as a public company and the same applies as above, except there is no share capital.
It is recommended that the services of a legal practitioner be used, because of the complexity in the compilation of the MoU and articles of a company and the fact that the documents need to be adjusted to fit specific circumstances and needs of each individual company.
The legal aspect of each company are regulated by the "Companies Act 61 of 1973".
A close corporation is a legal from, which like a company grants the business a separate legal personality. The business enterprise is owned by the close corporation. The members of the close corporation are legally different persons. The legal consequence is, as with the company, that the members are not liable for the debts of the corporation. The name of a close corporation must end with "close corporation" or abbreviated "CC", e.g. Etuna Enterprise CC". A close corporation may not have more than 10 members, who owns and manage the cc. Their interest must always add up to 100 % and be expressed as percentage.
Companies and close corporations do not need to have a prescribed minimum capital. Since they are both legal forms providing the enterprise with separate legal personality different from the owners of the company and/or close corporation respectively, there is the requirement for registration with the Registrar of Companies/Close Corporation at the Ministry of trade and Industry in Windhoek.
Registration takes place according to a prescribed procedure on specific forms:
These forms are available at any shop selling stationeries with statutory documentation. Other CC forms can be found at any auditing firms
A Company needs to lodge a Memorandum of Understanding of agreement, which needs to be submitted in original and two copies, of which one copy must be notarially executed. A close corporation does not need a memorandum of agreement, but it is sufficient that the members lodge a founding statement.
Companies and close corporations need to appoint an auditor, and companies have to lodge their annual financial statements with the registrar of companies for each financial year.
A partnership is nothing more than a contract between partners who want to do business jointly. Such a partnership agreement does not provide the business with a separate legal personality. The owners of the business who are bound to each other by means of the partnership agreement are the business and therefore they as partners are personally liable for any debt incurred in the name and on behalf of the business. A partnership cannot be registered, and any internal agreement between the partners will have legal effect in relation to third parties, if the outsiders have positive knowledge about the internals.
It is advisable to consult a legal expert to draw up a written agreement.
Not more than 20 partners are allowed in such. All partners are required to include all income from the partnership in their personal tax returns.
If a single person wishes to carry on a business s/he is called proprietor or sole trader. Even if a sole trader or instances under a business name, for instance "AMBER Stationeries" the trader is identical with the business and personally liable for any debt of the business. All loans taken out for this type of business are taken out in the owner’s name, therefore the owner stands to loose everything, including his private estate if the business fails.
This business may be registered as a defensive name (business name) only.
The business trust is a relatively new business form and here are still many debates as regards to the legal status of that business trust. Basically what it means is the separation of certain capital for a specific purpose. The legal requirements and contractual exigencies for a business trust need to be enquired with a legal practitioner.
All the legal forms and information are obtainable at the NCCI or MTI.
You must have a type of business in mind, which you are interested in. Why one needs a partner has to be clear after describing the type of business wanted. What the limitations that are there for the business to operate has to be defined clearly. The expectations from a partner that you would like to have must be clear. What should the partner bring to the business – expertise, technology or has connections to where the technology could be accessed. Can the partner bring financial advantages to start that kind of business?
They talk with one voice and have a bargaining power. This is important and crucial than speaking as an individual. They can influence policies in the country either positively or negatively affect their likelihood, because they speak as a group. They serve as advisor to the government in this regard.
They can also assist in linking up with other business partners – serving as a stop shop for all. It is easy and possible to approach them, because they are trustworthy, because the business people or people wanting to start a business are approaching a group and not an individual.
NCCI, MIT, Addresses see here.
The Ministry of Trade and Industry only gives permits to run a certain business, but Municipalities who owns the land give a license to operate your business at a certain premises.
A company with share capital needs to lodge the following documents for registration and incorporation:
A company without share capital needs to lodge for the registration and incorporation the following:
For registration and incorporation the following documents need to be lodged with the Registrar of Close Corporation:
The registration takes more or less two weeks starting from the first step, applying for a name and final step, which is registration. The CC forms are available in bookshops.
For information there are various booklets from the Directorate of Companies and Patents Registration Office.
The main objective of the Trademarks Office is to protect the rights of owners of trademarks through a regulatory process, by providing registration facilities and to protect the general public against possible confusion in the trade. It is also to guard against registration of false trademarks and prohibit the use of certain letters, emblems, marks and words for use in the trade (Minister of Trade and Industry 2003). The registration of trademarks is governed by the Trademarks Act No 48 of 1973 as amended.
An application form specific for this can be obtained at the trademark office in Windhoek. The trademark application is to be made in a particular class of goods or services. There a prescribed classification of goods in the booklet on how to register trademarks in Namibia which can be obtained from the Ministry of Trade and Industry in the Companies and Patents registration office.
There is a general rule that only the person (natural or legal) who is using or genuinely intents to use the trademark, may validly seek to register.
Registration is initially for 10 years and is subject to a fee and can be renewed every 10 years thereafter.
A Namibian trademark registration is effective only for the territory of Namibia. In case a trademark protection is needed in other countries a separate trademark application has to be completed in those countries.
In order to be granted a patent, the invention has to be new and should not have been formerly described, produced or explained to the public. For someone to qualify for a patent, 4 standard criteria have to be met:
The Patent Act No 9 of 1916 and proclamation 17 of 1923 is in use. Namibia is a member of the World Intellectual Property Organisation (WIPO) which governs the Paris Convention for the protection of Industrial Property.
Every convention application must have the following documents, otherwise it will not be considered complete and will not be processed further:
If an applicant is not interested in a conventional application, he or she is allowed to fill in application for a non-conventional, but the followings must be provided:
Complete information is available at the Ministry of Trade and Industry or at
The Registrar of Patents
Namibia Patent Office
P.O. Box 21214
Windhoek
Protection of industrial designs means that it may not be copied or imitated without the permission of the registered owner. Protection is given for 10 years.
The patents, Designs, Trademarks Act No. 9 of 1916 and Proclamation 17 of 1923 is used in Namibia.
A design can not be registered unless it is new or original and cannot be registered if there is any similar design on the register of designs or if it is the subject of an earlier application by someone else. It also will not be registered if it resembles any design, which has been published before.
Applications should be sent to
The Registrar of Designs
Namibian Patent Office
P.O. Box 21214
Windhoek
Each Bank has its regulations and fees for each transaction. Account fees depend on the amount withdrawn or deposited on that specific account or the amount on the cheque. There are different types of account depending on the bank, eg. FNB has saving account, status account, premier account, home loan and investment account. The status and Premier accounts are allocated to clients according to their income per year.
In order to open a business account, you must take the followings to the bank of your choice:
Transaction fees are normally referred to as service fee for each holder whereas the overdraft is paid depending on the amount requested.
The owner of the account or the manager of the bank has the authorisation for the disposal of the account. If this is done by the manger the owner is informed in writing.
The are brochures available e.g. at the banks with the information and premises indicated whether for renting, selling or plots for building of offices. Newspapers also have space for adverts on office rent or plots.
The lawyer responsible for all the transactions on that property drafts the contract on renting or purchasing. Therein is the duration, the amount, offences, etc stipulated.
Rental Rates for Prime Office Space: Exchange rate US$1 = N$9 (2002)
| Location | N$ per month | N$ per m2 |
| Arandis | 7 – 10 | |
| Gobabis | 25 | |
| Grootfontein | 18 – 24 | |
| Karibib | 800 – 1,500 | |
| Mariental | 900 – 1,500 | |
| Okahandja | 1,200 | |
| Omaruru | 250 – 500 | |
| Ondangwa | 45 | |
| Oshakati | 32 – 60 | |
| Otjiwarongo | 15 – 35 | |
| Outjo | 1,000 | |
| Rundu | 350 – 500 | |
| Swakopmund | 25 – 60 | |
| Tsumeb | 12 – 30 | |
| Walvisbay | 25 – 35 | |
| Windhoek | 85 – more |
There is a book released by Butterworths Publishers 2001 on Tax in Namibia – a practical guide – ISBN 0409 11682 3 (third edition).
The Namibian tax year goes from 1 March to 28/29 February in the following year. Namibia has the following tax legislation on the statute books:
The Income Tax Act
Tax payers are taxed according to their income derived from deducting exempt income and allowable deductions from gross income. All persons are taxed as individuals and partners are taxed on their share of net partnership income and partnership itself is not taxed as a separate taxable entity.
| Taxable income (N$ ) per year | Rates of taxes (N$ ) |
| 0 – 24,000 | Not taxable |
| 24,001 – 40,000 | 0 + 17 % for each N$ above 20,001 |
| 40,001 – 80,000 | 2,800 + 29.5 % for each above 80,001 |
| 80,001 – 200,001 | 14,600 + 34.5 % for each N$ above 80,001 |
| Over 200,000 | 56,000 + 35 % for each N$ above 200,001 |
The taxable income of all companies, other than the companies is subject to a flat rate of 35 %. Insurance companies are taxed at 14 % of investment income, mining companies’ tax rate is 37.5 % while diamond mines are taxed at 55 %.
The Petroleum Taxation Act
This is payable annually at the rate of 35 % of the taxable income received by any person from a license area in connection with exploration, development or production operations in that area.
The Value Added Tax
The Value Added Tax (VAT) replaced the Sales Tax and Additional Sales Levy. In Namibia there is no Capital gain tax, estate duty, inheritance tax or gift tax.
The essence of VAT is all that transactions entered into by an organisation are subject to tax. Few points to remember on VAT system:
The Stamp Duty Act
The tariff of stamp duties is described clearly in this act. Documents must be stamped at the time of signature. This does not apply to the registration of transfer of any marketable security for which a six-month period for stamping is provided.
The description of instruments and the rate of duty are provided for in the 3rd edition of the practical guide to Tax in Namibia.
The Transfer Duty Act
Duty payable on the transfer of immovable property is as follows:
Special rates apply where farmland is acquired with an Agricultural Bank loan: the maximum rate is 3 % above N$ 30,000. There is an exemption for dwellings not exceeding N$ 60 000 and land for the erection of a dwelling not exceeding N$ 24,000. New transfer rates are available, but is not yet available or maybe is still not promulgated yet.
Double taxation agreements
Namibia has concluded double taxation agreements with e.g. France, Germany, India, Mauritius, South Africa, UK, etc.
Company Tax
This includes both corporations registered in Namibia and branches of foreign corporation deriving income from Namibia. From January 2003 this is 18 % for a period of 10 years.
Personal Income Tax
This is payment to the non residents for services delivered in Namibia and individuals are taxed on progressive marginal rates over a series of income brackets.
Withholding Tax
This tax is levied on interest paid to non resident creditors which is 10 % to be deducted from any dividend distributed to a non resident.
Royalty Tax
On royalty payments to non residents for the use of patents, trademarks, designs, copyright, intellectual property, etc this tax is levied. The effective royalty is 10.5 %
Employees Tax – pay as you earn (PAYE)
Table to show the amount of tax that each employee has to pay according to level of salary:
| Monthly | Annual | Tax |
| 1 – 2,000 | 24,000 | 0 (Nil) |
| 3,461 – 3,480 | 41,760 | 276.60 |
| 6,381 – 6,400 | 76,800 | 1,138 |
| 33,681 – 33,700 | 404,400 | 10,628.33 |
| 60,461 – 60,480 | 725,760 | 20,001.33 |
Value Added Tax
Levied at a standard rate of 15 %
Trading Tax – Custom and Excise
Payable on the importation of goods into Namibia
Rates of Capital Allowances
Expenditures on moveable goods and machinery is allowed to be deducted equally over a period of three years (33.33 % annually) in respect of the acquisition cost of moveable, machinery, utensils and articles used by the taxpayer for purchase of his/her trade.
Expenditure on Buildings
An allowance of 20 % is granted on the cost of erection of buildings used for the purposes of trade in the first year of use and 45 in each of the following 20 years.
Turnover Tax
Turnover tax is part of the income tax (35 % on profit).
It depends on the type of business. New enterprises that export to countries outside South Africa Customs Union (SACU) can qualify for Export Processing Zone (EPZ) status. Benefits are:
Special tax incentives are also available to manufacturers approved by the Minister of Trade and Industry and registered as such by the Minister of Finance.
There a number of leaflets produced by the Ministry of Finance and available upon requests, especially on VAT.
For a business starter, commercial policy for the business and equipment is needed. All use this policy for commercial purposes. There are also marine insurance, Aviation insurance, professional indemnity and financial advice to protect them, engineering policy e.g. buildings.
Sections covered under commercial policy are:
Each company has its own rates, but all in the same range. 1 % of the premium stamp duty and 1 % is also paid to NAMFISA and this it to be paid to the government to monitor the market, are payable. The insurance companies work with agencies and brokers who get them customers and these are also paid a certain amount for their work.
If someone is starting up a business, adverts are placed in the local newspapers to allow everyone to apply, selection for the possible candidate is made and interviews are held. The successful candidate is informed and can start duty as required.
Public, private and self-employment (which is part of private) are the type of employment currently existing in Namibia. Those working then privately can also be freelanced.
Legal regulations concerning termination of employment is done according to the labour act. Usually there is a one-month notice by the employer or employee stipulated in the contract signed by both parties and a witness.
As far as legal voice for the employees is concerned, there are Unions if both parties could not agree on conditions opposed by either the employer or employee. Union is usually the last resort. In many institutions there is a representative of the union, a shop steward in the absence of a labour ministry. If one can afford the lawyer, the lawyer could handle the whole dispute.
The company determines the salary and the employee agrees to this before accepting the offer. Usually, the salary and other benefits are indicated in the advert.
The minimum wage is still being discussed, but some use N$ 3.50 per hour as the minimum.
Social Security is the protection that countries provide their inhabitants, through a series of public measures, against the economic and social distress caused by the stoppage or substantial reduction of earnings resulting from sickness, pregnancy, employment injury, unemployment, invalidity, old age, death and provision of medical care and the subsidies for families. There are usually two main schemes of social security, namely Social Insurance and Social Assistance.
The principal elements of the social insurance scheme are as follows:
Every employer should be registered and every employee who is less than 65 years must be registered by the employer. An amount of N$ 10 per employee and N$ 10 per employer is payable upon registration. Every employee’s contribution must equal 0.9 % of his or her remuneration and this amount must not be more than N$ 27 per month. Those self-employed may choose to register voluntarily as an employee and an employer.
Social Assistance can be described as a programme of income support and other support benefits. The main feature of this scheme is that it is financed entirely from government revenue. In Namibia, social assistance is given in the form of old-age pensions, disability grants, war veterans’ pensions, pensions for the blind, family maintenance grants, foster parent grants, etc. The concept of social insurance is not unique to Namibia. Many countries have a combination of some sort of the different branches mentioned above. The Social Security Act, Act 34 of 1994, provides for the following branches:
The are different documents available at the Social Security Commission:
Social Security Commission
Private Bag 13223
Windhoek
Tel.: 061 – 280 79 90
Fax: 061 – 21 17 65
E-Mail:
corporate@ssc.org.na
Usually the initial counselling without the lawyer is free, if the information is obtained from the bank, NCCI or the Ministry of Trade. Lawyers have their fees, which can only be obtained after a consultation visit by the lawyer. The consultation costs a certain fee and differs from lawyer to lawyer depending on the company's fee structure. The same applies if one hires a business consultant to assist in setting up the business and providing advice.
The fees for registration are Power of attorney: N$ 5, name of the company: between N$ 5 and N$ 25. More detailed information can be found here.
The costs for travel within each town depend on whether the company has its own vehicle or it will depend on public transport. Taxis, commonly used in Namibia, do not go everywhere at the same costs. There are so-called taxi ranks and beyond this, a certain amount is added on top of the normal price and this could really be high. A taxi now in Windhoek costs N$ 5 within the taxi ranks and if you have to use your own car then you have to use N$ 1.50 per kilometer.
Cost for industrial land and factory buildings
| City/town | Cost for industrial land –
(m2) N$ |
Factory building costs –
(m2) N$ |
| Arandis | 5 | Negotiable |
| Gobabis | 25 | Negotiable |
| Grootfontein | 1,800 | 1,800 |
| Karibib | N/A | N/A |
| Mariental | 1.50 | 2,000,000 (rental) |
| Okahandja | 74 | 74 |
| Omaruru | 1 – 10 | 1 – 10 |
| Ondangwa | 37 | Negotiable |
| Oshakati | 38 – 44 Land: 70 – 0 Building: 3,500 – 4,000 | |
| Otjiwarongo | 775 | Negotiable |
| Outjo | 2.50 | 1,800 |
| Rundu | 12 | As per tender |
| Tsumeb | 80 | 850 |
| Walvis Bay | 35 – 59 | 15 |
| Windhoek | 15 – 25 | 15 – 25 |
Rental rates for Prime Offices Space
| Town/City | N$ per month | N$ per m2 |
| Arandis | 7 – 10 | |
| Gobabis | 25 | |
| Grootfontein | 18 – 24 | |
| Karibib | 800 – 1,500 | |
| Mariental | 900 – 1,500 | |
| Okahandja | 1,200 | |
| Omaruru | 250 – 500 | |
| Ondangwa | 45 | |
| Oshakati | 32 – 60 | |
| Otjiwarongo | 15 – 35 | |
| Outjo | 1,000 | |
| Rundu | 350 – 500 | |
| Swakopmund | 25 – 60 | |
| Tsumeb | 12 – 30 | |
| Walvis Bay | 25 – 35 | |
| Windhoek | 85 – more |
Industrial Electrical Rates
| Primary customers | Charges N$ | Secondary customers |
Charges N$ | End customers | Charges N$ |
| Service charge | 145 per month | Service charge | 150 per month | Service charge | 150 per month |
| Demand charge * kVA * kW | 62 68 |
Demand charge * kVA * kW | 62.87 69.30 |
Demand charge * kVA * kW | 62.23 70.80 |
| Unit charge | 10.69 / kWh | Unit charge | 11.08 / kWh |
Water rates
| Town/City | Specification | N$ |
| Arandis | pre-paid | 4.50 |
| Gobabis | 0 – 25 mm over150 mm pre-paid |
13.30 112 6.74 |
| Grootfontein | Monthly charge per 5 kl In excess of 5 kl per month Bulk supply |
19.45 2.493 2.23 |
| Karibib | per m3 | 5.20 |
| Mariental | Residential per m3 Industrial 50 – 100 m3 per day 100 m3 – more per day semi purified water (m3) |
4.14 4.04 3.94 0.80 |
| Okahandja | Business and office per kl Bulk consumers per kl |
4.85 5.50 |
| Omarur | Domestic per unit Industrial per unit Non domestic per kl |
2.06 2.14 7.02 |
| Ondangwa | domestic | 5.95 |
| Oshakati | 0 – 6 kl 40.1 kl – above |
3.50 10 |
| Otjiwarongo | per unit | 0.36 |
In 1998, a comprehensive study on financial services providers for small enterprises was commissioned by the Joint Consultative Committee (JCC) to serve information needs concerning financial services provided in Namibia. Access to capital for small informal and formal businesses still constitutes one of the major obstacles for the SME sector growth the "smaller" end of the business spectrum does not appear to be well served by financial institutions). For banks and other financial institutions in particular, the small enterprise sector offers specific challenges and opportunities a corporate strategy towards credits for small businesses would be required.
The JCC is a member-based organisation, representing approximately 10,000 SME employees. Most of its members are organisations, institutions and corporate bodies assisting SMEs.
In general lending to the SME sector has increased over the past years. Lending from Standard Bank Namibia to SMEs increased from 26 % to 34 % over a period of three years According to its 1999 annual report. Credit extended by commercial banks and other financial institutions increased by N$ 1,2 billion to N$ 10,2 billion, representing a credit growth of 13,2 % over the year that ended September 2000. This growth was mainly in credits granted to individuals and the non-corporate small business sector. Credits to the establishment business sector grew only by 2.1 % for the same period.
The risk involved with lending to small businesses or potential entrepreneurs is higher compared to the risk of established larger companies. As a result small businesses are frequently refused loans. A study on small businesses in the Khomas region carried out by the MTI found that 70 % of small businesses used their own savings to start up their business and 1 % received businesses family assistance. The average start-up cost was approximately N$ 22 000. However, 70 % of newly founded small businesses had start-up costs of less that N$ 5 000. Obstacles for small businesses were seen in this study in complicated loan application procedures, lack of collateral and high interest rates. Summary of Key Data of some financial institutions are presented below.
| Organisation | Total sum of loans | Period for loan repayment | % of loan disbursed | Interest charge |
| DFN | N$ 91,000,000 | Grace period of four to six months. Average term is 1 to 5 years | 87,3 %, Rest disbursed if required, Disbursement mainly for fixed assets | Prime rate minus 3 % |
| NDC | N$ 7,628,963 | 1 to 5 years | 100 % disburse | 19.5 % |
| SBCGT | Credit guarantee scheme | Financial banks determine the period (range between two to three years) | N/a | Determined by the banks |
| Lisikamena | N$ 1,643,012 | 9 to 18 months | 80 % | 24 + prime rate |
| Liheprurura Kavango Trust | N$ 500,000 | 5 years | Not known | 21.5 % fixed |
| Oxfam | N$ 528,000 | Grant of up to N$ 60,000, no repayment required | 2 payments | No interest charge |
| OHA Micro/small | N$ 300,000, Fund varies depending on activities | 31 days | Undefined | Not specified |
| COSEDA Micro/small | N$ 450,000 | 1 year | 87 % | 14 |
The cash flow comparison in the table is based on an entrepreneur requiring N$ 10,000 for the start up of his or her business. The credit is payable back over the course of 18 months.
COSEDA is an NGO that provides credit to micro and small businesses operating in Windhoek and in particular in Katutura that may not be able to access credit in the formal banking sector. The organisation was established in 1991 and provides credit through the saving and credit scheme known as Ngaturitunge Pamwe. The criteria used to screen applicants include:
Applications should be willing to participate in the group-based scheme.
Lisikamena is a non-profit financial institution that was set up in Rundu in 1993, with the aim of disbursing small loans to women trading in markets in order to improve their businesses and increase their income. It provides credits through two loan schemes, the individual Loan Scheme (ILS) and the Micro Loan Scheme (MLS). Priority is given to women. Eighty per cent of the loans were disbursed to small entrepreneurs. Lisikamena is funded by Care Austria. Presently the schemes has been put on hold, but not terminated due to a low repayment rate (an amount of 1,3 million is outstanding). The criteria applied in screening the applicants are as follows:
The OHA was set up in 1989 for the benefit of street hawkers. OHA relies on institutional support from international donors. The criteria set for accessing loans are as follows:
It was established in 1987, the DFN's capital amount to N$ 90,737,225 of which N$ 11,946,203 constitutes the SME loan portfolio for 251 small project loans (i.e. of less than N$ 100,000,00 each). The DFN's lending programme for SMEs utilised commercial banks-primarily Bank Windhoek, First National Bank and the Commercial Bank of Namibia for the disbursement and collection of loans.
The DFN and the NDC may enter into a co-operation or merge. But the outcome of the consolidation is still unclear. The criteria applying for selecting loan applicants are:
The NDC was established in 1993. It is the first development corporation in Namibia. It is a parastatal and wholly owned by the Namibian government through the Ministry of Trade and Industry (MTI). The NDC offers various financial schemes for a wide variety of entrepreneurs in Namibia. It offers Small and Medium Entrepreneurial schemes providing loans ranging from N$ 1,000 to N$ 2000,000. The SME Start-up Scheme for loans of up to N$ 80,000, a Small Builders Bridging Fund and a Tenants' Aid Fund are also available. The NDC give priorities to the manufacturing sector. Criteria for applicants are as follows:
The CBN facilitates a credit schemes for the small business sector funded by the European Investment Bank (the European Unions development bank) and the Namibian government. The responsibility in terms of criteria rests with the donors concerned. The CBN also has it's own social development programme. The Entrepreneurship fund from this programme caters for small businesses. The fund initiated in 1996, but operated on an ad hoc basis. Recently the CBN assigned a full time position to manage the activities of the entrepreneur fund. The fund offers soft loans raging from N$ 1,000 to N$ 100,000. The interests charged are fixed at 6 %. The criteria for getting a loan are:
Bank Windhoek implemented a scheme called Value Package aimed at micro-enterprises. The bank is also part of the Small Business Credit Guarantee Trust. The criteria for applicants are:
Standard Bank of Namibia also participates in the credit guarantee trust, which is a partnership between commercial banks, the NDC and the government. Apart from its common banking activities the bank also lends money to small businesses. SBN also and initiates a pilot scheme for small business at the SBN Katutura branch. Currently the project has been put on hold due to high default rates.
The Trust launched a new credit scheme in 1999, which is based in Windhoek. Eighty percent of the capital came from the Namibian government, while twenty percent is covered by five commercial banks. The scheme has been implemented in partnership with the five commercial banks in Namibia and the NDC. The agreement signed with the financial institutions foresees the following:
The Trust is set up to assist start-ups and expanding entrepreneurs. The Trust also intends to extend the invitation to other financial institutions such as Nampost and the anticipated Namibia Development Bank. The criteria for applicants are as follows:
The CSIB does not have a specific scheme in place to fund small businesses. The CSIB grants loans to small businesses, in the sense that any loan application is approved if it is viable. The CSIB is also part of the Small Business Credit Guarantee Trust. The loan size depends on the collateral.
FNB is involved in two schemes funded by international NGOs and the Namibian government. The one scheme FNB is still managing is the Adult Development for Self Employment scheme (ADSE).
The ADSE Credit Guarantee Scheme guarantees an amount equal to 80 % of the value of the loan disbursed, with the remaining 20 % of the loan guaranteed by FNB. The main duties of FNB in this scheme is disbursing the loans and supplying monthly financial reports on all loans. The ADSE loan disbursement is based on recommendations on District Literacy Officials (DLO) from the Ministry of Basic Education and Culture. Details of the scheme are:
The ASDSE was launched in 1996 and it covers the whole country. The main goal of the project is to train 30 District Literacy Officers (DLOs) in their respective regions, to equip them for tasks that they will be required to perform as part of the ASDSE project.
The BoN is the implementing organisation of the Private Sector Global Loan II Scheme (PSGL II) initiated by the Government of Namibia and the European Investment Bank (EIB). The fund is used to encourage and facilitate small and medium scale private sector investments in Namibia. The objective is to provide sound enterprises with access to long-term funds in N$ on competitive conditions. The funds give priorities to the following sectors:
Services projects whose activities are related to the above sectors are also eligible for financing. The minimum loan size in N$ 35,000 and the maximum size is N$ 14,000,000. The scheme finance up to 50 % of the project cost.
The loans are available for a minimum of 5 years and have a minimum grace period of 1 year. The interest rate if fixed for the entire loan duration.
The BoN is the implementing agent for the government of Namibia. The CBN, FNB, SBN and Bank of Windhoek are also participating in the project. The criteria for applicants are as follows:
Since then, the number of organisations, projects or firms which are dealing with SME in Namibia has rapidly increased, so that a review of the existing information together with a brush up of new SME service providers became necessary.
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