Foreign companies vying for public tenders in Namibia will have to cede 51% ownership to locals, the Minister of Finance has said.
According to finance minister Saara Kuugongelwa- Amadhila, the new Public Procurement Bill, which seeks to repeal the Tender Board Act of 1996, will make it mandatory for foreign companies participating in the local tender process to have a minimum of 51% Namibian ownership.
She said: "We have said that there should be a minimum of 51% Namibian ownership and at least 30% [ownership] by previously disadvantaged persons. Where this is not possible, the evidence has to be granted. In terms of sourcing, if the materials are not available locally, evidence has to be presented in the form of a certificate from the office that administers that sector. For example, if it is food and there is no Mahangu in Namibia, you have to get a certificate either from the Agronomic Board or from the Minister of Agriculture that says yes, indeed there is a shortage and this person can import."
The minister, however, said exemptions will be given to foreign firms tendering for a "complicated project" in which locals may not be able to raise the capital required to get ownership.
She added: "We will now require that there should be greater preference given to locally manufactured goods. We are also requiring that tenderers should be in partnership with locals so that we don't have a situation where work which can be done by locals is done by foreign companies or companies owned by foreign people.
"We are also strengthening the decentralization aspect to say that the central tender board does not have to adjudicate over the award of all tenders; they only adjudicate over the award of the larger tenders. They just adjudicate, but don't award so that the line ministries would have to come to the tender board to get permission to award the tenders. Other projects will be decentralized to the regions. This will help to expedite the process of implementation; it will also allow the regions to empower entrepreneurs in their localities."
The government is of the view that the current Tender Board Act is not aligned with its current policy development in which procurement should be a central policy tool to achieve socio-economic objectives. Trade and Industry Minister, Calle Schlettwein was quoted last year saying the new Public Procurement Bill seeks to strengthen empowerment aspects, enhance efficiency of the tender board and improve the accountability and transparency of tender procedures and processes.
In addition, the new bill also seeks to provide for local economic development by promoting participation of Small and Medium Enterprises (SMEs), women and youth entrepreneurs, among other aims.
Minister Kuugongelwa-Amadhila told the Economist that the Bill, which was expected to be tabled in Parliament last year, is now in the hands of legal drafters. She said she is hopeful that the Bill will be tabled this year.