Santa Clara — Namibian lawmakers are accused of having effectively choked the life out of export companies set up to benefit from the Export Processing Zone (EPZ) regime at Oshikango, by enacting the abolishment of the export allowance incentive.
An appeal by businesses at Oshikango has until now fallen on deaf ears and the very few business owners struggling to trade say if government does not act - "then the Oshikango experience has effectively come to an end".
Government's amendment of Section 17c of the Income Tax Act in November last year is a death blow to business at the once thriving Oshikango border post.
The Angolan government has also rolled out new incentives to lure export companies to set up operations inside Angola, instead of trading from Oshikango. In addition, Angola has banned the export of various items, ranging from fish and livestock to cement and other manufactured goods.
Only about 10 companies are in operation out of the 45 enterprises that made up the Oshikango Business Association during the boom years at the border town.
"Oshikango no longer has the attraction for investors, because of the new trade complications. Plus companies can get better incentives to trade from Lobito or Luanda instead of being here," said the chairperson of Oshikango Business Association, Raed Hijazi.
The tax amendment abolishes the 80 percent export allowance incentive given to exporters, limiting the allowance to exporters of goods manufactured in Namibia.
Oshikango-based exporters say the amendment will have a dramatic effect on the future of their investments. According to Oshikango-based businesspeople, they came to Namibia purely because of incentives promised by the government.
The businesses wrote to the Minister of Trade and Industry, Dr Hage Geingob, this year stating their concerns. They are yet to get a response from the government.
With business at Oshikango border post seriously in decline, the sustainability of cross-border trade between Angola and Namibia hangs in the balance as the two governments fail to finalise a trade pact they committed themselves to a year ago.
Namibia and Angola are yet to formalise Article 10 of the 2004 bilateral trade agreement, an issue that has been outstanding for nearly 10 years, but which allows for the establishment of a joint commission on trade.
The commission, when in place, would enhance business communication between the two countries, making cross-border trade easier and harmonising trade laws for closer economic cooperation.
Businesspeople face a host of difficulties in trading with Angola at all border posts and a New Era investigation has found massive business closures and job losses at the Oshikango border post, as a result of the current problems.
"No investor came to make enquiries here in the last 18 months, because they hear the place is dying and it is dying," one businessman told New Era.
The turning point for Namibia was highlighted by last year's drastic decision by the Angolan government to ban the import of cement into Angola, a decision which was later relaxed to allow only all-purpose cement, but still banning special-strength cement.
Businesspeople say the list of items that Angola has banned now stands at more than 50 items "and is growing every day".