According to US Department of State 2011, the government is committed to stimulating economic growth through attracting foreign investment. The private sector is regarded as the principal source of economic production and as a catalyst for growth. This has led the government to pass business-friendly legislation, and several observers assess the business climate in Namibia as attractive compared to some of its neighbours. The country has considerable growth potential due to mineral wealth and its geographical position between two major economies of the region. According to the World Economic Forum Global Competitiveness Report 2010-2011, Namibia's comparative competitiveness is increasing. However, according to the same report, corruption continues to be a problematic factor for doing business, and while it does not feature among the most severe obstacles, companies still consider the occurrence of irregular payments and bribes in Namibia as fairly common. According to Bertelsmann Foundation 2010, there has been criticism that the investigations in major corruption deals in business-government relations are dragged out and tend to focus on lower-level officials.

Also the World Bank & IFC Enterprise Surveys 2006 reveals that companies operating in Namibia encounter corruption and that they consider corruption to be an obstacle to their business operations: 10% of companies cite corruption as the primary obstacle for business activities, 19% of companies identify corruption as a major constraint and 11% report that they expect to make unofficial payments to 'get things done'. The survey also reveals that corruption primarily affects the operations of small and medium-sized companies. It is also reported that 7% of companies cite anti-competitive or informal practices as the main constraint to doing business in Namibia. A 2009 Executive Opinion Survey conducted by Old Mutual Namibia and the Namibian Stock Exchange shows that corruption continues to constitute an obstacle to companies operating in Namibia. According to a 2010 article by The Namibian, 60% of the surveyed Namibian business executives assess that corruption is a 'serious problem', while 18% perceive it as a 'very serious problem' and 72% believe that corruption is increasing. Most of the respondents speak from experience as 43% reveal to have encountered corruption 'a few times' in 2009 while 11% have experienced it 'often'. The interface between government institutions and companies is hampered by corruption and companies face difficulties in getting access to government services unless they pay bribes to government officials, according to the Namibia Institute for Democracy Tackling Corruption 2007.

The Namibia Institute for Democracy Tackling Corruption 2007 also finds that embezzlement of funds is the most frequent form of corruption and that it is especially prevalent in private companies. According to the report, prevalence of corruption in the private sector during the time under review was high compared to previous years. Namibia's extractive industry attracts major foreign investments, and this offers huge opportunities for illegal enrichment for holders of high offices. Observers report that bribes are paid in return for the concessions and licences necessary to run companies in the extractive sector. The Namibian economy is still characterised by a range of parastatals, and there has been no indication towards the privatisation of these state-owned companies. Many of these parastatals, such as Air Namibia, the Namibia Airports Authority, the Namibia Water Corporation, the Social Security Commission and TransNamib, are occasionally mentioned as sites of corrupt activities and mismanagement.

The regulatory environment in Namibia is generally viewed as business-friendly and uncomplicated. However, the government aims at further clarifying and simplifying the procedures governing foreign investment in Namibia, as the current regulatory and incentives system has not attracted the desired level of foreign investments. Companies generally spend little time dealing with requirements of government regulation compared to both regional and world average figures. According to the World Bank & IFC Doing Business 2011, starting a company takes an average of 66 days and involves 10 procedures. Despite the Namibian government's commitment to creating a liberal regulatory regime, a policy that has made it into one of the least bureaucratic places to do business in the region, administrative procedures are still considerably more time-consuming, costly and complex than in OECD countries. According to the World Bank & IFC Doing Business 2011, Namibia performs well regarding the number of steps and days it takes for a company to obtain necessary licences to build a warehouse. However, it struggles with a complex, time-consuming and costly bureaucracy in the fields of registering property and trading across borders. Bertelsmann Foundation 2010 reports that Namibian administrative channels are long, and corruption is common without being excessive. Red tape is also singled out as an impediment to investment by the Namibian administration. Business executives surveyed in the World Economic Forum Global Competitiveness Report 2010-2011 give complying with administrative requirements (permits, regulations, reporting) a score of 3.6 on a 7-point scale (1 'extremely burdensome' and 7 'not burdensome at all'). Moreover, companies identify inefficient government bureaucracy as one of the three most problematic factors for doing business in Namibia. 

In order to minimise the bureaucratic burden on foreign investors, the Government of Namibia has established an Investment Centre under the Ministry of Trade and Industry. The centre was established to act as a one-stop shop to assist foreign investors and is often investors' first point of contact in the country where companies can obtain advice on investment opportunities, incentives and procedures. Namibia has a range of tax and other fiscal incentives to attract foreign investors, but these have been introduced over a prolonged period of time, leaving Namibia with a somewhat complex set of investment incentives. Companies exporting at least 80% of their production outside the Southern African Customs Union (SACU) may apply for Export Processing Zone (EPZ) status, and there are also specific incentives for manufacturing and export-oriented production. The parastatal Offshore Development Company (ODC) is in charge of the EPZ programme, but has itself been at the epicentre of a major corruption scandal involving NAD millions. All information on EPZ incentives can be found at the website of the Ministry of Trade and Industry.

The government strongly supports Black Economic Empowerment (BEE) measures, which improves the opportunities for previously disadvantaged groups to establish themselves in the private sector. However, the government has so far failed to deliver a long-awaited policy on BEE. In the meantime, some companies have drafted their own BEE guidelines. Observers expect that it will become increasingly necessary for foreign investors to form partnerships with local BEE companies. In addition, the government's investment and development programmes focus on less developed regions. However, recent support to local BEE projects has reportedly failed due to fraud and mismanagement of funds. This has led some observers to argue that the BEE programme is in danger of benefiting only the black elite with ties to the ruling party. Investors are strongly recommended to develop, implement and strengthen integrity systems and to conduct extensive due diligence before committing funds and when already doing business in Namibia.

The protection of property rights is secured in the Constitution of Namibia 1990. Foreign investors can purchase and own land in Namibia, the only legal restriction being that of foreign ownership of agricultural farmland. However, foreign investors should note that land reform is a growing political issue. No expropriations have occurred to date without appropriate compensation. There is little government interference in the judicial system and it is generally reported that Namibian courts provide effective enforcement of property and contractual rights. The Foreign Investment Act 1990 also allows for settlement of commercial disputes by international arbitration for investors that have obtained a Certificate of Status Investment (CSI). Namibia has signed, but not yet ratified the International Centre for Settlement of Investment Disputes (ICSID) Convention. The Professional Arbitration and Mediation Association of Namibia (PAMAN) has been established to function as the facilitating hub of arbitration in the labour, commercial and construction fields but there are currently few reports of its performance. Access the Lexadin World Law Guide for a collection of legislation in Namibia.

Individual Corruption

The Afrobarometer 2008 reveals that although the Namibian court system is generally viewed as independent and uncorrupted compared to other countries in the region, citizens still perceive judges and magistrates to be involved in corruption. According to the Bertelsmann Foundation 2010, people wait for years to be tried due to a shortage of judges and a backlog of cases that exist in the courts. Freedom House 2011 reports that access to justice is obstructed by economic and geographic barriers, a shortage of public defenders and delays caused by a lack of capacity in the court system, especially at lower levels.

Business Corruption

According to the World Economic Forum Global Competitiveness Report 2010-2011, companies in Namibia perceive the judiciary as very independent. Similarly, the US Department of State 2011 reports that the courts are generally independent and uphold contracts.

Data from the World Bank & IFC Enterprise Surveys 2006 reveals that a majority of companies have faith in the Namibian courts as an effective means of enforcing contracts and settling commercial disputes. Nevertheless, less than a third of the companies surveyed report that they resolve disputes through court action. This should not be seen as a sign of distrust towards the Namibian judiciary, but rather as a result of the Labour Act 2007, which introduces a major shift towards arbitration as the preferred method of resolving collective and individual labour disputes. Consequently, an increasing number of labour disputes are not settled in labour courts, but through alternative dispute resolution mechanisms. The Professional Arbitration and Mediation Association of Namibia (PAMAN) functions as the facilitating hub of arbitration in the labour, commercial and construction sectors.

Political Corruption

The independence of the judiciary is guaranteed by the constitution, and the separation of powers is respected in practice. However, according to the US Department of State 2010, while the courts continue to act independently and at times make judgments and rulings critical of the government, inefficiency and a lack of resources hamper the judicial system.

The judges and officials of the courts act in accordance with the constitution and the rule of law, according to Bertelsmann Foundation 2010. In recent years, reservations have been expressed about political partiality in the appointment of judges which, however, have not been substantiated to date. The government has established commissions of inquiry chaired by judges in response to public calls for investigations of the abuse of public office and allegations of corruption on the part of members of the government or public officials. However, the report also points to the lack of serious sanctions in high-profile corruption cases involving the government as a sign that influential wrongdoers somehow manage to go unpunished due to political considerations dictated by the ethno-social system of patronage. According to Global Integrity 2007, accountability within the judiciary is quite weak, and there are no laws that regulate conflict of interest for judges.

In June 2007, former Public Prosecutor, Stanley Nakale, was convicted of corruption in the High Court and sentenced to five years in prison.

Frequency

The World Bank & IFC: Doing Business 2011:
- Enforcing a commercial contract in Namibia requires a company to go through an average of 33 administrative procedures, which takes an average of 270 days and costs an average of 35.8% of the claim.

- The equivalent averages for OECD countries are 31 administrative procedures, 517 days and 19% of the claim.

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give the Namibian judiciary's level of independence from influences of government, citizens, or companies a score of 5.5 on a 7-point scale (1 'heavily influenced' and 7 'entirely independent').

- Business executives give both the efficiency of the legal framework for private companies to settle disputes and to challenge the legality of government actions and/or regulations a score of 4.9 on a 7-point scale (1 'extremely inefficient' and 7 'highly efficient').

Afrobarometer: Summary of Results Namibia 2008:
- 28% of household respondents do not think that judges and magistrates are involved in corruption.

- 37% of household respondents think that some of them are involved in corruption.

-19% of household respondents surveyed stated that most or all judges and magistrates are likely to be involved in corruption.

The World Bank & IFC: Enterprise Surveys 2006:
- 66% of companies believe that the court system is fair, impartial and uncorrupted.

- 6% of companies identify the functioning of the courts as a major business constraint.

Individual Corruption

The Afrobarometer 2008 household survey in Namibia reveals that many Namibians perceive the police to be corrupt. According to the US Department of State 2010, corruption and impunity are problems in the police force. Corruption cases involving police officers vary from traffic police demanding bribes to destroying traffic tickets, officers defrauding tourists while pretending to be immigration officials and officers keeping the belongings of arrested individuals. 

According to the US Department of State 2010, corruption in the Namibian security forces is also common. According to the report, although some security force members accused of abuse of office and corruption were arrested and tried in military courts or the civilian criminal system, the government took no action against others.

Business Corruption

Companies should note that surveys, such as Afrobarometer 2008, indicate that a significant proportion of Namibians believe that the police force is involved in corruption. As in many other countries, police corruption takes the form of bribes paid in order to avoid problems with the police, such as detentions and fines for traffic violations. Although there are no reports of the impact of police corruption on the business climate, companies should interpret survey results as an indicator of the questionable integrity of some police officers and should consequently be prepared to deal with demands for bribes. According to the World Economic Forum Global Competitiveness Report 2010-2011, companies identify the reliability of Namibian police services to protect them from crime as inadequate and a competitive disadvantage.

Political Corruption

Corruption within the Namibian police forces is also common among high-level officers. In February 2010, two senior police officers - the suspended former commanding officer of the special branch and the former head of the police finance division - were found guilty of embezzlement. The former was fined more than USD 3,600, while the latter was fined over USD 250, according to the US Department of State 2010.

Similarly, according to the same report, in February 2010, the deputy commissioner of police for Erongo Region was found guilty of soliciting a personal donation under an official guise in 2006. He was fined USD 1,140 and resigned in March 2010.

Moreover, in March 2010, the Namibia Defence Force (NDF) Lieutenant-Commander was arrested for demanding a USD 1,430 bribe from the owner of a lodge at Walvis Bay in exchange for booking accommodations for members of the Chinese army during the year.

Frequency

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give the reliability of Namibia's police services to enforce law and order a score of 4.5 on a 7-point scale (1 'cannot be relied upon at all' and 7 'can always be relied upon').

Afrobarometer: Summary of Results Namibia 2008:
- 43% of respondents cite that they think some police officers are involved in corruption.

- 42% of respondents state that they believe most or all of police officers to be involved in corruption.

-38% of respondents trust the police a lot while only 9% do not trust the police at all.

- 61% of respondents have never paid a bribe to avoid a problem with the police.

- Only 2% of respondents have made a payment once or twice to avoid a problem with the police.

The World Bank & IFC: Enterprise Surveys 2006:
- 27.6% of the interviewed companies identify crime and theft as a major constraint to doing business in Namibia.

Individual Corruption

The Afrobarometer 2008 reveals that citizens have few experiences with paying bribes, giving gifts or doing favours for government officials in order to obtain a document, a permit or a household utility such as water, electricity or telephone. Nevertheless, the same survey reveals that a significant proportion of citizens perceive government officials to be involved in corruption. According to a November 2009 article by Namibia Economist, bribery of officials from the Roads Authority to obtain illegal driver's licences or to register unroadworthy vehicles constitutes a big problem in Namibia. The Minister of Works and Transport has publicly asked individuals and officials to refrain from such practices and warned of severe consequences.

Business Corruption

Companies should prepare themselves to deal with a relatively inefficient public sector when operating in Namibia. The problem is aggravated by a decentralisation process that transfers duties and tasks to the regions and municipalities but several observers argue that institutions here lack qualified personnel to perform these new tasks. This is a major challenge for effective service delivery and, according to some observers, fuels the use of facilitation payments. As a result, the Afrobarometer 2008 reveals that a significant proportion of citizens believe that government officials (often in charge of issuing licences, permits and providing public utilities) are involved in corruption.

Political Corruption

Companies operating in Namibia generally do not expect to bribe in order to obtain an operating licence. However, the high demand for licences to run gambling houses and casinos has led to a rise in the number of illegal gambling licences. In June 2010, a former deputy director of the Ministry of Environment and Tourism was sentenced to eight years in prison for accepting over USD 47,500 in exchange for promising to issue illegal gambling licences to prospective business investors in 2006. This was the most senior government official to date to have been convicted under the Anti-Corruption Act, according to the US Department of State 2010.

In June 2010, Namibia's authorities arrested the governor of Karas Region on charges of corruption. He was accused of pocketing a monthly housing subsidy of over USD 1,000 over a one-year period while living in a rent-free house owned by the Karas Regional Council. The trial in relation to this case continues, according to the US Department of State 2010.

In December 2010, five senior managers of the Government Institutions Pension Fund had been asked to take voluntary leave to facilitate a probe into the Development Capital Portfolio (DCP), which had lent USD 9.5 million to 21 Namibian companies through the DCP from the late 1990s to 2002. Many of the loans were never repaid, and a 2006 audit revealed that the loans were fraught with problems, according to the US Department of State 2010.

According to the report, also a Ministry of Finance official and a businessman Antoine Mbok were arrested in 2010 for allegedly intercepting checks worth USD 572,000 and depositing them into Mbok's private bank account. Both the Finance Ministry employee and Mbok were denied bail and remained in police custody.

Frequency

The World Bank & IFC: Doing Business 2011:
- Starting a company requires the entrepreneur to go through 10 procedures, taking 66 days and costing 18.5% of income per capita.

- Building a warehouse in Namibia requires a company to go through 12 administrative steps, which take an average of 139 days at a cost nearly of 113% of per capita income.

- It takes an average of 1.5 years to close a company at a cost of 15% of the estate.

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give government administrative requirements (permits, regulations, reporting) in Namibia a score of 3.6 on a 7-point scale (1 'extremely burdensome' and 7 'not burdensome at all').

Afrobarometer: Summary of Results Namibia 2008:
- 8% of respondents in this household survey do not think that local government officials are involved in corruption.

-38% of respondents believe that some of them are involved in corruption.

- 49% of respondents believe that either most or all of them are involved in corruption.

- 59% of respondents have never paid a bribe to obtain a document or a permit.

- 5% of respondents have paid a bribe once or twice in the past year to obtain a document or a permit.

The World Bank & IFC: Enterprise Surveys 2006:
- Companies report delays in obtaining an electrical connection at 9 days, a telephone connection at 7 days, and a water connection at 5 days.

- It takes an average of 10 days to obtain a business operating licence.

- It takes an average of 28 days to obtain a construction related licence.

Business Corruption

The Namibian reports in an October 2007 article that the controversial businessman Tony Mbok was arrested on charges of fraud after he allegedly sold a house without the owner's consent. Mbok was previously linked to Dignity Housing Initiative, which was accused of luring Katutura residents into paying NAD 5,000 deposits for houses that never materialised.

Political Corruption

Since the adoption of the Agricultural (Commercial) Land Reform Act in 1995, Namibia has undertaken a process of land reform that aims at levelling out the skewed land distribution pattern that was established when the country was under South African apartheid rule. The Land Reform Act allows the Namibian state to buy land from white owners for resettlement of previously disadvantaged Namibians in line with the 'willing seller, willing buyer' principle and to conduct land expropriation against the payment of just compensation.

According to a June 2008 article by The Namibian, local land administrators generally have discretionary powers in exercising their duties. To illustrate the importance of transparency in the Namibian land administration, the article cites the resettlement programme as an example. Namely, even though the government, through its National Resettlement Policy, had established that only the most vulnerable groups were to benefit from resettlement programme, evidence was found that top government officials as well as a regional governor had been resettled on farms. The article concludes that this practice illustrates inconsistent and non-transparent application of land regulations in Namibia.

Frequency

The World Bank & IFC: Doing Business 2011:
- Registering property in Namibia requires a company to go through 9 administrative steps, taking an average of 23 days at a cost of 9.6% of the property value.

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give the protection of property rights in Namibia, including financial assets, a score of 5.6 on a 7-point scale (1 'very weak' and 7 'very strong').

Individual Corruption

Although the estimated amount of bribes paid to tax officials in Namibia is low compared to other countries in the region, the Afrobarometer 2008 reveals that tax officials from the Ministry of Finance and local governments are perceived to be involved in corruption.

Business Corruption

According to the World Bank & IFC Enterprise Surveys 2006, some companies operating in Namibia report that interaction with tax officials occasionally entails payments of bribes. Although the number of companies reporting that they expect to give gifts in meetings with tax officials is rather low, the data should be seen as a consequence of the regulatory burden facing companies in the field of paying taxes. Compared to OECD countries, a company operating in Namibia should expect to make three times the number of payments to tax authorities every year than a company operating in an OECD country.

According to the Namibia Institute for Democracy Tackling Corruption 2007 report, tax officials solicit bribes from businesspeople in return for destroying evidence of their debts to the Receiver of Revenue. Nevertheless, even after paying bribes, some businesspeople still receive letters from the tax authorities a few days later giving them ultimatums for settling their tax payments.

Political Corruption

According to a May 2009 article by Insight Corruption Tracker, the former head of the Oshakati office of the Directorate of Inland Revenue, Hans Haraseb, was dismissed from the office in 2006 after a disciplinary hearing found him guilty on charges of misconduct related to tax fraud. Haraseb was accused of enriching himself after an audit uncovered serious irregularities in the way tax was collected by his Oshakati office. However, no criminal charges have been laid against Haraseb and so far the Ministry has not made any attempt to recover the money that went missing, despite recommendations to do so.

Frequency

The World Bank & IFC: Doing Business 2011:
- A medium-sized company operating in Namibia must on average make 37 payments to the tax authorities every year and spend 375 hours preparing, filing, and paying taxes at a total tax rate of 9.6% of profits.

Afrobarometer: Summary of Results Namibia 2008:
- 12% of respondents in this household survey do not think that tax officials are involved in corruption.

- 37% of respondents think that some of them are involved in corruption.

- 38% of respondents believe that most or all of them are involved in corruption.

The World Bank & IFC: Enterprise Surveys 2006:
- 2.5% of companies expect to give gifts in meetings with tax inspectors.

- 3% of companies polled report that they expect to give gifts in their meetings with tax inspectors compared to the regional average of 20%.

- The surveyed companies spend an average of 3 days a year in meetings with tax officials.

- 4% of the companies surveyed identify tax administration as a major constraint compared to a regional average of 33%.

Business Corruption

Companies should note that the World Bank & IFC Doing Business 2011 indicates that Namibia performs poorly when it comes to trading across borders, as the costs and procedures required to import and export a standardised shipment of goods are high compared to OECD averages. However, Namibia is relatively competitive in this area compared to regional averages. Cumbersome and costly customs procedures are frequently associated with high levels of corruption in the form of facilitation payments made to expedite procedures. The Namibian reports in a June 2007 article that the head of one of Namibia's biggest fruit and vegetable importers as well as the customs chief at Noordoewer were arrested on charges of bribery. The business man had allegedly deposited what amounted to NAD 700.000 into a bank account in the name of the customs official's son to avoid paying customs duties on goods imported from South Africa.

Business executives surveyed by the World Economic Forum Global Enabling Trade Report 2010 point out that time-consuming bureaucracy related to trade across borders opens the way for public officials to demand bribes in Namibia. For example, trade is impeded by customs procedures that lack efficiency, and exporting and importing require time-consuming paperwork to clear goods at the border. Corruption and bribery in these processes are not uncommon.

Frequency

The World Bank & IFC: Doing Business 2011:
- A standard export shipment of goods requires 11 documents and takes 29 days at a cost of USD 1,686 per container.

- A standard import shipment of goods requires 9 documents and takes 24 days at a cost of USD 1,813 per container.

World Economic Forum: The Global Enabling Trade Report 2010:
- Business executives give the efficiency of customs procedures (formalities regulating the entry and exit of merchandise) a score of 4.2 on a 7-point scale (1 'extremely inefficient' and 7 'extremely efficient').

- Business executives give the transparency of border administration (pervasiveness of undocumented extra payments or bribes connected with imports and exports) a score of 4.4 on a 7-point scale (1 'extremely inefficient' and 7 'extremely efficient').

The World Bank & IFC: Enterprise Surveys 2006:
- It takes 1.5 days on average to clear direct exports through customs.

- It takes 3 days on average to clear imports from customs.

- 7% of the companies surveyed identify customs and trade regulations as a major concern for doing business.

Business Corruption

The Namibian public procurement sector is not free from corruption, as indicated in a March 2008 article by Insight Corruption Tracker. According to the article, the director of the Anti-Corruption Commission (ACC), among others, has admitted that Namibia's current tender system could be vulnerable to bribery and favouritism. This is supported by the World Economic Forum Global Competitiveness Report 2010-2011, in which the surveyed business executives consider the favouritism of government officials towards well-connected companies and individuals when deciding upon contracts as not uncommon.

According to the US Department of State 2011, state-owned companies (parastatals) have to date been closed to all investors (Namibian and foreign) and foreign investors have participated in joint ventures with parastatals only in certain sectors, such as mobile telecommunications. Nevertheless, the process is slow, and many parastatals remain in the hands of the government. In 2006, the government sold a 34% share in its state-owned mobile phone company, MTC, to Portugal Telecom. However, an unsuccessful bidder complained that the bidding process was rigged to favour one specific bidder. The case underlines the opaque nature of many of the activities of Namibia's parastatals, a condition frequently highlighted by observers. Companies are recommended to use a specialised public procurement due diligence tool in order to mitigate the corruption risks associated with public procurement in Namibia.

The Namibian reports in an April 2010 article that Namibia's public service commissioner, Teckla Lamack, who is the owner of the company Teko Trading CC, has been indicted on charges of corruption, fraud and bribery together with her business partner, Kongo Mokaxwa, and their Chinese conspirator after they allegedly received a USD 12.8 million kickback from the Chinese state-owned company Nutech to help secure a contract on security scanning equipment with the Namibian Ministry of Finance. The case is under investigation by the Anti-Corruption Commission which is also investigating Teko Trading CC for possible irregularities in relation to a tender to extend a railway line in Northern Namibia.

Political Corruption

Corruption in Namibia often takes the form of irregularities in procurement and contracting, especially within the extractive industry, as indicated by the Bertelsmann Foundation 2010. Holders of high offices are occasionally accused of influence peddling due to their involvement in companies operating in the extractive industry. This involvement, however, is not necessarily illegal, as conflict of interest legislation in Namibia is inadequate, and because the Prime Minister and the Public Service Commission can grant permission for individual civil servants to hold positions in the private sector.

In a highly criticised case covered by Afrol News, the ACC cleared two advisers to the Prime Minister for their roles in the state-owned oil company, NamCor, in a NAD 800 million contract for importing 50% of Namibia's oil requirements. The contract was awarded to a South African oil company, Sasol, together with the local partner, Namibia Liquid Fuel (NLF). The two advisers were part owners of NLF. Critics argue that the contract led to 'instant self-enrichment' for the officials. The ACC reviewed the bidding process and concluded that the contract was awarded on merit and that the role of the civil servants was not problematic, as permission had been granted for them to undertake work in the private sector.

Frequency

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give the diversion of public funds to companies, individuals, or groups due to corruption a score of 4.2 on a 7-point scale (1 'very common' and 7 'never occurs').

- Business executives give the favouritism of government officials towards well-connected companies and individuals when deciding upon policies and contracts a score of 3.5 on a 7-point scale (1 'always show favouritism' and 7 'never show favouritism').

The World Bank & IFC: Enterprise Surveys 2006:
- 8% of companies surveyed expect to give gifts to secure a government contract.

- The value of a gift expected to secure a government contract is 0.52% of the contract value, significantly less many in countries in the region.

Business Corruption

According to Bertelsmann Foundation 2010, the extractive industries, either through the granting of licences for mining and fishing or through participations in international companies, offer huge opportunities for illicit enrichment.

Illegal logging continues to pose a problem in Namibia despite the adoption of the Forestry Act in 2001, and the consequent establishment of Community Forests. According to a March 2009 article by IPS, the majority of tree harvesting happens illegally due to loopholes in the permit system, and most of the loggers who have a permit exceed it and cut down more timber than they are permitted.

Political Corruption

In July 2007, Namibia Liquid Fuel (NLF) was cleared by the Anti-Corruption Commission of wrongdoing in connection with the tender for 50% of the country's fuel requirements. The company's principals include a number of senior government officials and close associates of former President Nujoma. However, concerns remains about aspects of the deal and potential loopholes in the Anti-Corruption Act and the Public Service Act. During the case, the head of the Central Governance Agency (CGA) had received death threats, apparently in connection with the CGA's probe into how NLF received a contract to supply the National Petroleum Corporation of Namibia (NamCor) with petroleum products.

• Legislation: Namibia ratified the United Nations Convention against Corruption and the African Union Convention on Preventing and Combating Corruption in August 2004. The legal framework for curbing corruption in Namibia is strong and adequate. Passed in 2003, the Anti-Corruption Act specifies and criminalises all relevant offences of corruption. The Act also provides for the establishment of the Anti-Corruption Commission (see below), which is mandated to investigate cases of corruption. Each citizen is obliged by law to report corrupt practices to the Anti-Corruption Commission. Corrupt practices are defined as including passive bribery, active bribery, attempted corruption, extortion, bribing a foreign public official, money laundering and abuse of public office and resources for private gain. The act prescribes punishment for those convicted of corruption as a fine not exceeding NAD 500,000 or a prison term not exceeding 25 years, or both combined. Members of Parliament are required to disclose their assets, but the head of state is not. According to the Public Service Act of 1995, civil servants are not allowed to hold positions in the private sector while employed by the state. However, the Public Service Commission or the Prime Minister can give permission to individual civil servants to undertake work in the private sector. This has spurred some criticism following the Namibia Liquid Fuel case where a large government tender was awarded to a company in which senior government officials were major shareholders; these officials had been given permission to carry out these activities (see also 'Public Procurement and Contracting' in the Corruption Levels section for more details on this case). The Freedom of Information Act was introduced in 1999 and put into effect in 2005 as a fundamental component of the government's anti-corruption initiative. In 2004 the Prevention of Organised Crime Act (POCA) was passed to combat organised crime, money laundering and people trafficking. The act imposes reporting obligations on suspicions of unlawful activities and provides for the establishment of a Criminal Assets Recovery Fund and Criminal Assets Recovery Committee. The POCA was complemented by the Financial Intelligence Act of 2007 (FIA), which came into effect in May 2009. FIA makes it mandatory for financial institutions and designated businesses to implement adequate policies and procedures, such as know-your-customer policies and customer due diligence and to report Suspicious Transaction Reports to the Financial Intelligence Centre that the Act establishes within the Bank of Namibia as the administering authority.

• Government Strategies: President Pohamba declared a zero tolerance of corruption policy when he took office in 2005, proclaiming that he would set a personal example. With the commitment of the President and with the establishment of the Anti-Corruption Commission, Namibia seemed to be going from an ad hoc approach towards combating corruption to a more focused and comprehensive approach. Corruption has moved up on the national agenda and is eroding the view of corruption as a socially acceptable phenomenon in Namibia. Although President Pohamba was quick to deal with corruption, the ministries and the government have been less enthusiastic about implementing anti-corruption policies. However, overall the starting point for Namibia's anti-corruption measures is good since the rule of law is generally respected by the government.

• Anti-Corruption Agencies: The Anti-Corruption Act of 2003 mandated the establishment of an Anti-Corruption Commission (ACC). Officers for the ACC were formally installed in 2006. The ACC is an independent and impartial body consisting of a director, a deputy director and other staff. The director and deputy director of the ACC are appointed for 5 years by the National Assembly. The ACC has powers to initiate investigations in cases of alleged corruption. The ACC is answerable only to the National Assembly, and may choose to refer cases to the Prosecutor General, who then chooses whether or not to proceed with cases. According to Global Integrity 2007, the ACC is in practice mostly free from political interference, and appointments tend to be based on professional criteria rather than political considerations. Nevertheless, the ACC has been widely criticised for failing to tackle major cases of corruption and for being overzealous in its clampdown on petty corruption. For instance, Bertelsmann Foundation 2010 argues that the ACC tends to focus on lower-level officials in grand corruption investigations and these are usually dragged out for longer time-periods, according to Freedom House 2011. The disclosure in the media that ACC Director Paulus Noa and a deputy kept receiving, albeit erroneously, salaries and bonuses from their previous employer, and that they arranged to pay it back over a long period of time, instead of doing it instantly, was detrimental to the credibility of the ACC. Despite this criticism, many observers agree that the establishment of the ACC is a positive step in the fight against corruption in Namibia. Together with the Namibia Institute for Democracy (NID), the ACC operates a reporting centre where citizens can report alleged cases of corruption.

• Auditor-General: The Office of the Auditor General Namibia is an independent body tasked with auditing the accounts of ministries and other public sector units. According to Global Integrity 2007, the Auditor General has a limited staff, but can contract external auditors. The office's limited powers were underscored when its reports revealed corruption in the police, who then confiscated all records. Reports of the Auditor General are generally delayed but they are made public on their website. According to Global Integrity 2007, appointments to the Auditor General tend to support its independence, although there are exceptions and appointments may in some cases be made based on political considerations. Furthermore, according to the report, the government's actions on audit reports may sometimes be unsatisfactory, particularly if they involve political figures and party loyalists.

• Office of the Ombudsman: The Ombudsman Act 1990 mandated the establishment of the Office of the Ombudsman. Among its other responsibilities, the Office of the Ombudsman investigates citizens' complaints of public sector corruption. The Ombudsman has launched a National Integrity Promotion Program in order to combat corruption, promote and protect human rights, protect the environment and Namibia's natural resources. According to Global Integrity 2007, the Office of the Ombudsman is in practice mostly free from political interference, and appointments to the office tend to support its independence. It has a complaint mechanism on its website, where complaints of public sector corruption can be lodged. Annual reports from the Ombudsman's Office can be accessed through the website. Information on filing public complaints, including those related to corruption, is also available online.

• E-Governance: Namibia is still in the process of developing e-governance. The Parliament has a well-run website where all laws, including acts and bills that are put before Parliament, are put online to give the citizens of Namibia the opportunity to gain full information. Namibia also has a government website which seems to have the purpose to inform about how the country is organised. Interactive websites and online tax and customs services has not yet been introduced in Namibia.

• Public Procurement: Public procurement of goods and services is made through the Tender Board of Namibia, comprised of representatives from government ministries and regulated by the provisions of the Tender Board of Namibia Act 16 of 1996. The aim of the board is to ensure that tenders are awarded according to the principles of an open bidding process. However, the Namibian procurement policy permits preferential treatment to bids that meet certain socioeconomic goals and strategies. In spite of this, most observers assess the Namibian public procurement regime as transparent. Only few cases of suspected bias or irregularities have been uncovered within the last few years. In law, major procurements require competitive bidding and strict formal requirements limit the extent of sole sourcing. Unsuccessful bidders can instigate an official review of procurement decisions and challenge the concrete procurement decision in court. Generally, the effectiveness of Namibia's tender regulations could be questioned, since companies guilty of major violations of procurement regulations are in practice not prohibited from participating in future procurement bids, according to Global Integrity 2007.

• Whistle-Blowing: According to Global Integrity 2007, whistleblowers are protected in law from recriminations, but in practice there are examples of people losing their jobs for acting as whistleblowers. Together with the Namibia Institute for Democracy (NID), the Anti-Corruption Commission operates a Report Centre where public and private sector employees can confidentially report alleged cases of corruption.

• General Comments on the Public Anti-Corruption Initiatives: Observers generally agree that Namibia's legal and institutional framework for curbing corruption is adequate and among the most functional in the region. Despite efforts by the Anti-Corruption Commission (ACC), Office of the Ombudsman, and Office of the Auditor General, public corruption remains a problem. The division of powers is respected in practice, which means that the Namibian judicial system is generally able to address corruption and enforce contracts without political interference. The establishment of the ACC is viewed by many observers as a major positive step in the fight against corruption in Namibia. However, corruption remains a problem in the diamond sector and in the many parastatals. The anti-corruption campaign is backed by a strong civil society and the media, which function as the main watchdog in the country by revealing cases of corruption and illicit enrichment by holders of high offices. However, some observers consider President Pohamba's initial enthusiasm about combating corruption to be faltering. Many politically well-connected public officials accused of fraud have escaped prosecution, and a promise made in 2006 to publish all the reports of the previous presidential commissions of enquiry into corruption has still not been actualised. Observers argue that, overall, Namibia has an ambitious anti-corruption framework, but the main problem is implementation and enforcement of these laws.

• Media: According to Freedom House 2011, media has generally enjoyed a relatively open and free operating environment in Namibia. Freedom of the press is guaranteed in the Constitution of Namibia 1990. Private broadcasters and independent newspapers usually operate without official interference. The media is an active player in the country's anti-corruption efforts and acts as a powerful check on government in the country. However, as Freedom House 2011 reports, in recent times, state-run media have been under pressure from political forces. While many insist that the state-run Namibia Broadcasting Corporation (NBC) enjoys freedom to criticise the government, in July 2008, members of SWAPO and the government criticised the NBC's directors on a variety of grounds, raising suspicion that this was due to the NBC's failure to sufficiently follow the partly line. In 2007, Nujoma, former President and head of the ruling party SWAPO, initiated a USD 650 million defamation suit against the newspaper The Namibian because of a story printed in 2005 that implicated Nujoma in a corruption scandal. Despite these instances, journalists are generally free to report on corruption. There are no government restrictions on the Internet, and several publications have popular websites. According to Freedom House 2011, the passing of the Communication Act in 2009 has raised concerns about privacy rights as the Act includes an interceptions clause that allows the government to tap into private communications without a court order. Reporters Without Borders 2011 ranks Namibia 35th out of 178 countries, while Freedom House 2011 ranks the country 76th out of 196 countries and describes its press environment as 'partly free'.

• Civil Society: Neither in law nor in practice are there any notable restrictions on the activities of civil society organisations. However, according to Bertelsmann Foundation 2010, only civil society organisations that are closely linked to SWAPO do actually have some political impact, while organisations critical of the government are unable to initiate noticeable change.

• Namibia Institute for Democracy (NID): In the field of corruption, the NID is a major resource, releasing reports and surveys on corruption. The NID is also behind a three-year anti-corruption programme, the Zero-Tolerance for Corruption Campaign financed by the Swedish aid agency SIDA and other international donors. This campaign aims at raising public awareness of corruption by building public-private partnerships, highlighting cases of corruption and providing information on anti-corruption legislation and institutions. 

• National Society for Human Rights (NSHR): The activities of NSHR include anti-corruption campaigning and action against and mismanagement in government and by non-state actors, with the purpose of strengthening citizens' oversight of local politicians and their influence on local governance frameworks. The organisation is critical of the work of the Anti-Corruption Commission.

• Citizens for an Accountable and Transparent Society (CATS): CATS is a civil society group that formed in 2007. The organisation is concerned with the possibilities and the responsibility of the individual to refrain from and to fight graft.

The websites listed below provide useful facts on Namibia as well as contacts and tools for companies operating in Namibia:

• International Finance Corporation: Global SME Toolkit
  Guide to sustainable business management practices for SMEs.
• Business Fighting Corruption
  An online resource centre for business on collective action to avoid corruption which contains a guide and resources for partnerships with companies and other stakeholders to fight against corruption.
• CIA World Factbook: Namibia Profile
• World Bank: Namibia Data Profile

Sources for further reading:

• Freedom House: Freedom in the World - Namibia 2011.
• US Department of State: Investment Climate Statement - Namibia 2011.
• US Department of State: Human Rights Report - Namibia 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.

UNCAC Status: Signed 9 December 2003. Ratified 3 August 2004.

Status on UNCAC Implementation
This field describes the country's status on the United Nations Convention against Corruption. Please note any declarations and reservations made upon ratification. The list of signatories can be found on the UNODC website. Read more about the UNCAC.

Other Relevant Conventions or Treaties:

• United Nations Convention against Transnational Organized Crime: Signed 13 December 2002. Ratified 16 August 2002.
  Read Transparency International's summary and assessment of the convention.
• AU Convention on Preventing and Combating Corruption: Signed 12 December 2003. Ratified 5 August 2004.
  Read Transparency International's summary and assessment of the convention.

Transparency CPI: 2011: 57/182 (Score: 4.4)

Transparency CPI
This field consists of the score for the country in question on the Corruption Perceptions Index from Transparency International as well as its ranking.

World Bank CORR Index (-2.5 - +2.5): 2010: +0.26

World Bank Corruption Index
This field consists of the score for the country in question on the 'Control of Corruption' indicator in the World Bank Governance Research Indicator Country Snapshot (GRICS): 1996-2010.

OECD Country Risk Classification (0-7): 2011: 3

Country Risk Classification
The classification of countries by risk category has the aim of providing OECD countries with a basis for calculating the premium interest rate to be charged to cover the risk of non-repayment of export credits. Countries are placed in risk categories 0 - 7, with 0 being the lowest risk category and thus the least expensive. Conversely, premium group 7 is the highest risk category. Each classification is comprised of 2 components: 1) an assessment of the country's economic/financial situation, and 2) its overall political stability. Access the complete list of OECD Country Risk Classification figures.

Data Verification:

Publication date: August 2011

Data verified by: Global Advice Network

General Information Sources

• The World Bank & IFC: Doing Business 2011.
• Freedom House: Freedom in the World - Namibia 2011.
• US Department of State: Investment Climate Statement - Namibia 2011.
• World Economic Forum: The Global Competitiveness Report 2010-2011.
• US Department of State: Human Rights Report - Namibia 2010.
• AllAfrica: 'Corruption a Cancerous Growth - Ulenga', 2 July 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• The Namibian: 'Pohamba pushes for less red tape', 16 June 2010.
• The Namibian: 'Namugongo gets 8 years', 14 June 2010.
• The Namibian: 'Corruption remains root of business evil', 6 June 2010.
• The Namibian: 'Calls to account for political party funding', 8 March 2010.
• Freedom House: Freedom in the World - Namibia 2009.
• US Department of State: Investment Climate Statement - Namibia 2009.
• Associated Press: 'Incumbent wins big in Namibian presidential vote', 5 December, 2009.
• The New York Times: 'China Helps the Powerful in Namibia', 20 November 2009.
• Afrol News: 'Namibia gears up on anti money laundering', 25 July 2009.
• Afrobarometer: Summary of Results Namibia 2008.
• Afrol News: 'Namibia Gov't Condones Graft', 2 April 2008.
• The Namibian Economist: 'Call on Nujoma to Retire', 24 January 2008.
• Namibia Institute for Democracy: Tackling Corruption - Opinions on the Way Forward in Namibia 2007.
• Global Integrity: Namibia Country Report 2007.
• Henning Melber: 'Corruption, Made in Namibia, Mail & Guardian', 28 May 2007.
• New Era: 'Staggering Corruption Findings', 16 March 2007.
• Foreign Investment Advisory Service: Namibia Investment Legislation, Incentives, and Institutions: Recommendations for Reform 2006.
• The World Bank & IFC: Enterprise Surveys 2006.
• US Department of State: Human Rights Report - Namibia 2006.
• Institute for Security Studies: Money Laundering Control in Namibia 2003.

Corruption Levels Sources

Judicial System

• The World Bank & IFC: Doing Business 2011.
• Freedom House: Freedom in the World - Namibia 2011.
• US Department of State: Investment Climate Statement - Namibia 2011.
• World Economic Forum: The Global Competitiveness Report 2010-2011.
• US Department of State: Human Rights Report - Namibia 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• US Department of State: Human Rights Report - Namibia 2009.
• Freedom House: Freedom in the World - Namibia 2009.
• Afrobarometer: Summary of Results Namibia 2008.
• Global Integrity: Namibia Country Report 2007.
• The World Bank & IFC: Enterprise Surveys 2006.

Police

• Freedom House: Freedom in the World - Namibia 2011.
• World Economic Forum: The Global Competitiveness Report 2010-2011.
• US Department of State: Human Rights Report - Namibia 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• US Department of State: Human Rights Report - Namibia 2009.
• Afrobarometer: Summary of Results Namibia 2008.
• Namibia Institute for Democracy: Tackling Corruption - Opinions on the Way Forward in Namibia 2007.

Licences, Infrastructure and Public Utilities

• The World Bank & IFC: Doing Business 2011.
• US Department of State: Investment Climate Statement - Namibia 2011.
• World Economic Forum: The Global Competitiveness Report 2010-2011.
• US Department of State: Human Rights Report - Namibia 2010.
• The Namibian: 'Namugongo gets 8 years', 14 June 2010.
• Namibia Economist: 'Namibia: Don't Bribe RA Officials', 27 November 2009.
• Afrobarometer: Summary of Results Namibia 2008.
• Namibia Institute for Democracy: Tackling Corruption - Opinions on the Way Forward in Namibia 2007.
• The World Bank & IFC: Enterprise Surveys 2006.
• Toplawyernews.com: 'Namibia: Anti-Corruption Commission Nets Big Fish', 19 September 2006.
• Institute for Security Studies: Money Laundering Control in Namibia 2003.
• Namibia's Zero Tolerance for Corruption Campaign: Corruption Timeline.

Land Administration

• The World Bank & IFC: Doing Business 2011.
• US Department of State: Investment Climate Statement - Namibia 2011.
• World Economic Forum: The Global Competitiveness Report 2010-2011.
• US Department of State: Human Rights Report - Namibia 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• The Heritage Foundation: Index of Economic Freedom - Namibia 2010.
• Freedom House: Freedom in the World - Namibia 2009.
• The Namibian: 'Transparency in Land Administration - a closer look', 20 June 2008.
• IPS: 'Land Reform Reaping Fruits Despite Problems', 12 November 2008.
• The Namibian: 'Mbok arrested on fraud charge', 9 October 2007.

Tax Administration

• The World Bank & IFC: Doing Business 2011.
• US Department of State: Investment Climate Statement - Namibia 2011.
• Insight Corruption Tracker: 'Haraseb bids to overturn dismissal', 9 May 2009.
• Afrobarometer: Summary of Results Namibia 2008.
• Namibia Institute for Democracy: Tackling Corruption - Opinions on the Way Forward in Namibia 2007.
• The World Bank & IFC: Enterprise Surveys 2006.

Customs Administration

• The World Bank & IFC: Doing Business 2011.
• World Economic Forum: Global Enabling Trade Report 2010.
• The Namibian: 'Fruit merchant gets bail after corruption arrest', 14 June 2007.
• The World Bank & IFC: Enterprise Surveys 2006.
• Afrobarometer: Summary of Results Namibia 2006.
• Afrobarometer: Compendium of Results from a 15-Country Survey 2004.

Public Procurement and Contracting

• US Department of State: Investment Climate Statement - Namibia 2011.
• World Economic Forum: The Global Competitiveness Report 2010-2011.
• US Department of State: Human Rights Report - Namibia 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• US Department of State: Investment Climate Statement - Namibia 2010.
• The Namibian: 'Teko trio deny any guilt', 9 April 2010.
• US Department of State: Investment Climate Statement - Namibia 2009
• Bloomberg: 'Namibia Widens Probe Over Chinese Payments to Domestic Company', 6 August 2009.
• Insight Corruption Tracker: 'The hidden world of public contracting', 8 March 2008.
• Global Integrity: Namibia Country Report 2007.
• afrol News: 'Severe Blow to Namibia's Corruption Fight', 19 July 2007.
• The World Bank & IFC: Enterprise Surveys 2006.

Environment, Natural Resources and Extractive Industry

• US Department of State: Human Rights Report - Namibia 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• Freedom House: Freedom in the World - Namibia 2009.
• IPS: 'Ten Dollars for a 200-Year-Old Tree', 18 March 2009.
• Global Integrity: Namibia Country Report 2007.
• afrol News: 'Severe Blow to Namibia's Corruption Fight', 19 July 2007.
• The Bertelsmann Foundation: Transformation Index - Namibia 2006.
• Institute for Security Studies: Money Laundering Control in Namibia 2003.
• Namibia's Zero Tolerance for Corruption Campaign: Corruption Timeline.

Public Anti-Corruption Initiatives Sources

• Freedom House: Freedom in the World - Namibia 2011.
• US Department of State: Investment Climate Statement - Namibia 2011.
• US Department of State: Human Rights Report - Namibia 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• The Heritage Foundation: Index of Economic Freedom - Namibia 2010.
• Freedom House: Freedom in the World - Namibia 2009.
• Freedom House: Freedom of the Press - Namibia 2009.
• Insight Namibia: 'Namibia gets serious on money laundering', in Corruption Tracker, September 2009.
• Namibia Institute for Democracy: Tackling Corruption - Opinions on the Way Forward in Namibia 2007.
• Global Integrity: Namibia Country Report 2007.

Private Anti-Corruption Initiatives Sources

• Freedom House: Freedom in the World - Namibia 2011.
• US Department of State: Human Rights Report - Namibia 2010.
• Reporters Without Borders: Namibia Country Report 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• Freedom House: Freedom in the World - Namibia 2010.
• Reporters Without Borders: Worldwide Press Freedom Index 2009.
• Freedom House: Freedom of the Press Index 2009.
• Freedom House: Freedom in the World - Namibia 2009.
• Freedom House: Freedom of the Press - Namibia 2009.
• Global Integrity: Namibia Country Report 2007.
• National Society for Human Rights: 'Government Should Lead by Example in Fight Against Corruption', 12 December 2007.