Judging by the Black Economic Empowerment (BEE) groups that companies have already identified to partner with in anticipation of the New Equitable Economic Empowerment Framework (NEEEF), this legislation might not benefit the lower income groups, who need the urgent intervention the most, in the fight against poverty and inequality.
NEEEF was formed to provide an overarching policy framework incorporating the pillars of empowerment and aimed at promoting, facilitating and coordinating all of government’s economic empowerment policies. The proposed bill is designed to restructure private businesses by offering 25 percent of their ownership to previously disadvantaged people.
“I don’t think NEEEF will benefit the middle or lower income groups. There are a number of companies that have already identified BEE groups to partner with and these groups cannot be classified as middle or lower income. People need to work harder and stop looking for hand-outs. Namibia needs to be more productive (ie. produce more) in order to create jobs and increase wages and employment. At the same time skills development needs to be improved. Our education system needs an overhaul. That is the only way the inequality gap can be closed,” commented Purvance Heuer, a Director of Research and Securities at a local stock brokerage, Simonis Storm Securities.
Other private business entities, such as the Capricorn Group, declined to comment on the intricacies of NEEEF, saying instead that they already provided formal feedback to the Office of the Prime Minister on key NEEEF aspects.
Earlier this month, New Era reported that former Prime Minister, Nahas Angula, says it would be unfair to exclude the “black elite” from allocating 25 percent of shareholding to the previously disadvantaged, as white and foreign business owners would be required to do. Angula believes this is because there are black business moguls, who have made a lot of money since independence, and should share their riches with other black Namibians.
“I won’t mention their names but there are some black people who made a fortune…. and it is not fair on white people alone to give up 25 percent of their businesses,” said Angula.
Angula stressed the need for the NEEEF, which was crafted during his tenure as prime minister, to be revised to better define ‘previously disadvantaged’, as the societal and economic climate has changed.
“Things have changed, because, [for example] when you look at me now, I can say I am disadvantaged by my age. There is a need to relook the framework. There needs to be new formulae to the framework, as time has passed.” Angula did not mince his words when he said there are many pillars to NEEEF but strong emphasis and interest seems to be only on the issue of equity.
Also, earlier this month, chairperson of the Law Reform and Development Commission, Yvonne Dausab, said the 25 percent cession in NEEEF can be reconsidered.
The Namibian Newspaper reported that during a plenary discussion at the Invest In Namibia conference, Dausab said the Bill has room for improvement. ““NEEEF is being reviewed. If there are any issues or conflicts, there is always room for improvement, but I think the issues that have been raised are being considered,” she said.
During NEEEF stakeholder consultations in June this year, a handful of business people proposed that some regulations or pillars in the proposed Bill, be optional. The regulations include: economic ownership, management control and employment equity, that were proposed as mandatory.
Participants at the national meeting expressed concern regarding the minimum requirement set on the economic ownership pillars – that a business must be 25 percent owned by previously disadvantaged persons (PDPs) and that the business will score more points if a bigger share of the company is owned by PDPs. They also raised concern regarding the human resources and skills development pillar that requires businesses to spend 0.5 percent of gross wages on the training of personnel in the company and complained about the lack of experts in the country to train locals and that some companies have to import foreigners for skills transfer.
Other NEEEF pillars include entrepreneurial development and marketing; corporate social responsibility; value addition, technology and investment; and financing of transformation, which are proposed as optional to local businesses.