Namibia Country Profile

General Information

Political Climate

Namibia is often highlighted as an example of successful democratisation and corruption control on a continent infamous for its fragile and unaccountable regimes. The clear division of powers between the executive, legislative and judicial branches is yet another sign of a functional state with an independent judicial system that can uphold citizens' rights. Despite the positive developments, politics in Namibia suffer from a range of deficiencies that hamper accountability and transparency. For instance, Namibian law does not require that politicians disclose their assets or restrict politicians from entering the private sector after leaving the government. According to several observers, the dominance of the South West Africa People's Organization (SWAPO), which was initially formed as an independence movement in the 1960s, poses a threat to Parliament's role in exerting checks and balances on the government. SWAPO has enjoyed massive popular support and continued to prove its dominance by receiving more than 75% of the vote in the November 2009 presidential and parliamentary elections, while the opposition has remained fragmented and weak. Hifikepunye Pohamba, who succeeded Sam Nujoma as President in 2004 after being his chief deputy for more than 40 years, was re-elected in the 2009 presidential elections with more than six times the votes received by his nearest rival, Hidipo Hamutenya.

Sources frequently describe Namibia as a patronage state, meaning that power and resources are distributed along channels of ethnicity, family, friends and political allies spreading out from the President's Office. Holders of high offices and their family members have been involved in cases of grand corruption, often in relation to public procurement and extractive industry. According to some observers, Namibia's public administration is bloated and inefficient. Together, the characteristics above create a public sector vulnerable to corruption. The legislative and institutional framework to combat corruption is largely in place, and is supported by the media, which functions as an important control mechanism in Namibia. Nevertheless, corruption remains a problem at the political and higher administrative levels as well as in parastatal organisations. President Pohamba launched a zero tolerance for corruption campaign in 2006 and installed the officers of the Anti-Corruption Commission (ACC), which is answerable only to the National Assembly and can recommend cases to the prosecutor-general. Since then, Freedom House 2009 reports, the ACC has been involved in the arrests of a number of lower-level state officials as well as two officers of the National Assembly. It has also conducted investigations of more senior officials. In April 2008, the former head of the Swapo Party Youth League (SPYL) and six others were arrested and charged in a major fraud case. However, as per US Department of State 2009, critics of the anti-corruption campaign charge that the ACC narrowly interprets its mandate and focuses on minor cases, with few cases reaching prosecution.

Opinions differ on how efficient the fight against corruption in Namibia is. According to Afrobarometer 2008, 54% of households think the current government fights corruption 'fairly well' or 'very well', whereas 41% think the government does a 'very bad' or 'fairly bad' job. Of the households surveyed, 46% think 'none' or 'some' of the government officials are involved in corruption while 49% think that 'most' or 'all' of them are involved in corruption. In addition, while 34% of households believed that it is 'somewhat' likely that the Anti-Corruption Commission will be effective in reducing corruption in Namibia, 33% were more optimistic and believed that it is 'very' likely.

Business and Corruption

According to US Department of State 2009, Namibia is macroeconomically stable and the market economy functions reasonably well. The private sector is regarded as the principal source of economic production and as a catalyst of 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 2009-2010, Namibia's comparative competitiveness is increasing. According to the same report, however, corruption continues to be a problematic factor for doing business, although it does not feature among the most severe obstacles. This is supported by data from the World Bank & IFC Enterprise Surveys 2006, which 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 make unofficial payments to 'get things done'. The survey 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. The interface between government institutions and companies is hampered by corruption, according to the Namibia Institute for Democracy Tackling Corruption 2007. Companies face difficulties in getting access to government services unless they paid bribes to government officials.

The Namibia Institute for Democracy Tackling Corruption 2007 report, which assesses actual instances of corruption from 2004-2006, 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.

According to the Institute for Security Studies (ISS) 2003, money laundering is allegedly a major problem in Namibia due to the country's open investment policy coupled with its mineral wealth and good international reputation. Financial institutions in the country are generally of high integrity and, consequently, transactions do not raise the suspicions of authorities in other countries. The setting up of front companies in the diamond sector is reported to be a common way of laundering money. Diamond inspectors, although sizable in numbers and equipped with broad powers, cannot control the large territory of Namibia and systematically investigate all companies operating in the sector. However, the African news agency, afrol News, reports that starting July 2009, the Namibian government has installed anti money laundering software, created by UNODC, to be abreast with latest tracking technology in the fight against organised global crime. It is still to be seen how effective this software has been in curbing money laundering in the country.

Regulatory Environment

The regulatory environment in Namibia is generally viewed as business-friendly and uncomplicated. However, the Government of Namibia 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 2010, starting a company takes an average of 66 days and involves 10 procedures. Despite the Namibian government's commitment to create 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 2010, 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.

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 of Namibia 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 means to enforce property and contractual rights. The Foreign Investment Act 1990 also allows for settlement of commercial disputes by international arbitration. 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.

Judicial System

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 2009 reports that access to justice, however, 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 2009-2010, companies in Namibia perceive the judiciary as very independent. 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 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. The independence was confirmed in the 2004 election when a judicial decision led to the recount of votes due to allegations brought forward by two opposition parties concerning irregularities of ballot papers and counting of votes. According to Bertelsmann Foundation 2010, the judges and officials of the courts act in accordance with the constitution and the rule of law. In recent years, reservations have been expressed about political partiality in the appointment of judges which, however, have not been substantiated till date. One sign of the government’s respect for the rule of law is the appointment of 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 2010:
- 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, 462 days and 19% of the claim.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the Namibian judiciary's level of independence from influences of government, citizens, or companies a score of 5.7 on a 7-point scale (1 being 'heavily influenced' and 7 'entirely independent').

- Business executives give 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 4.7 and 4.8 respectively on a 7-point scale (1 being '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.

Police

Individual Corruption

The Afrobarometer 2008 household survey in Namibia reveals that many Namibians perceive the police to be corrupt. However, the data is inconclusive as few respondents have actually experienced paying bribes to the police. According to the Namibia Institute for Democracy Tackling Corruption 2007 report, corrupt police officers are involved in selling driver's licences.

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 2009-2010, companies identify the reliability of Namibian police services to protect them from crime as inadequate and a competitive disadvantage.

Frequency

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the reliability of Namibia's police services to enforce law and order a score of 4.3 on a 7-point scale (1 being 'cannot be relied upon at all' and 7 being '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.

Licences, Infrastructure and Public Utilities

Individual Corruption

The Afrobarometer 2008 reveals that citizens have few experiences with paying bribes, giving gifts to 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 the Namibia Institute for Democracy Tackling Corruption 2007, driver's licences are sold illegally in Namibia. The lucrative falsified driver's licence market is allegedly run by corrupt police officers.

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 illustrating the time line of corruption in Namibia, the Zero tolerance for corruption campaign website states that in September 2006 the deputy director at the Ministry of Environment and Tourism, who is responsible for issuing gambling licences, was arrested for selling fake gambling licences to Namibians amounting to hundreds of thousands of NAD.

Frequency

The World Bank & IFC: Doing Business 2010:
- Starting a company requires the entrepreneur to go through 10 procedures, taking 66 days and costing 20.4 % 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 124.7% 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 2009-2010:
- Business executives give government administrative requirements (permits, regulations, reporting) in Namibia a score of 3.7 on a 7-point scale (1 being '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.

Land Administration

Business Corruption

In illustrating the time line of corruption in Namibia, the Zero tolerance for corruption campaign website states that in October 2007, 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.

Frequency

The World Bank & IFC: Doing Business 2010:
- 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 2009-2010:
- Business executives give the protection of property rights in Namibia, including financial assets, a score of 5.8 on a 7-point scale (1 being 'very weak' and 7 'very strong').

Tax Administration

Individual Corruption

Although the estimated bribe-paying 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 more than double the amount 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 of demand from the tax authorities a few days later giving them ultimatums for settling their tax payments.

Frequency

The World Bank & IFC: Doing Business 2010:
- 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%.

Customs Administration

Individual Corruption

Data from the World Bank reveals that custom procedures in Namibia suffer from a complicated, time-consuming and costly bureaucracy. In many contexts, a cumbersome bureaucracy increases citizens' propensity to resort to bribes.

Business Corruption

Companies should note that the World Bank & IFC Doing Business 2010 indicates that Namibia performs poorly in relation to trading across borders Index, 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. There are currently no specific reports on this issue in Namibia, although companies should know that many citizens perceive border officials as being involved in corruption.

Frequency

The World Bank & IFC: Doing Business 2010:
- 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 Competitiveness Report 2009-2010:
- Business executives give the efficiency of customs procedures (formalities regulating the entry and exit of merchandise) in Namibia a score of 4.2 on a 7-point scale (1 being '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.

Public Procurement and Contracting

Business Corruption

According to the US Department of State 2009, 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 in certain sectors only, like in mobile telecommunications. Although the Government underscores its commitment to privatisation, the process remains slow and many parastatals remain in the hands of the Government. Nevertheless, the Government sold a 34% share in 2006 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.

Political Corruption

Corruption in Namibia often takes the form of irregularities in procurement and contracting, especially within the extractive industry. 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 as 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 the African news agency, afrol News, the Anti-Corruption Commission (ACC) cleared two senior officials (advisers to the Prime Minister) for their roles in the state-owned oil company, NamCor, in an 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 officials were part owners of NLF. Critics argue that the contract led to 'instant self-enrichment' for these individuals. 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 2009-2010:
- Business executives give the diversion of public funds to companies, individuals, or groups due to corruption a score of 4.1 on a 7-point scale (1 being '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 3.6 on a 7-point scale (1 being '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.

Environment, Natural Resources and Extractive Industry

Business Corruption

The Namibian extractive industry, especially the diamond sector, is allegedly a hot spot for corruption and money laundering. Despite extensive government control of diamond production and trade, the sector struggles with so-called 'front companies' that have been established either by influential civil servants, politicians or individuals who set up such companies to channel money from criminal activities committed abroad.

Theft and smuggling of diamonds is a problem that the government seeks to address by arming diamond inspectors with broad powers. These inspectors, acting in conjunction with law enforcement agencies, perform 'sting operations' and set traps, but several detectives have been murdered in these operations - a strong indication of the large sums of money involved in diamond smuggling and the high stakes involved.

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.

Public Anti-Corruption Initiatives

• 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 and 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.

• Government Strategies: President Pohamba declared a zero tolerance of corruption policy when he took office in 2005. He proclaimed 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 facilitating a breach with 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 to implement anti-corruption policies. However, overall the starting point for Namibia's anti-corruption measures is good inasmuch as the rule of law is generally respected by the government.

• Anti-Corruption Agencies: The Anti-Corruption Act 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. The ACC has been widely criticised for failing to tackle major cases of corruption and for being overzealous in its clampdown on petty corruption. 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 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.

• 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. The office 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-running 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 are made through the Tender Board of Namibia, comprised of representatives from government ministries. 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. According to the provisions of the Tender Board of Namibia Act 16 of 1996, companies that are caught violating the procurement rules are barred from participating in future procurement bids. According to Article 18 in the Namibian Constitution, persons aggrieved by decisions made by administrative bodies may seek redress in a court of law; hence unsuccessful bidders have the right to challenge the procurement decisions in a court of law.

• 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 employees 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.

Private Anti-Corruption Initiatives

• Media: According to Freedom House 2009, 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 2009 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 July2008, 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. Reporters Without Borders 2010 ranks Namibia 35th out of 175 countries, while Freedom House 2009 ranks the country 66th out of 195 countries and describes its press environment as 'free'.

• Civil Society: Civil society organisations play important roles in controlling the decisions and expenditures of the Government of Namibia. Neither in law nor in practice are there any notable restrictions on the activities of civil society organisations.

• 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. The campaign has a very informative website.

• 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 organisation does not yet have a homepage.

Resources

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:

• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• Freedom House: Freedom in the World - Namibia 2009.
• Afrobarometer: Summary of Results Namibia 2008.
• Namibia Institute for Democracy: Tackling Corruption - Opinions on the Way Forward in Namibia 2007.

Conventions and Indices

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: 2009: 56/180 (Score: 4.5)

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): 2008: +0.59

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): 1996-2008.

OECD Country Risk Classification (0-7): 2010: 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:

Latest update: December 2009

Data verified by: Global Advice Network

Information Network

Country Profile Sources

General Information Sources

• The World Bank & IFC: Doing Business 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• World Economic Forum: The Global Competitiveness Report 2009-2010.
• 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.
• 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 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• World Economic Forum: The Global Competitiveness Report 2009-2010.
• 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

• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• World Economic Forum: The Global Competitiveness Report 2009-2010.
• 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 2010.
• World Economic Forum: The Global Competitiveness Report 2009-2010.
• 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 2010.
• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• The Heritage Foundation: Index of Economic Freedom - Namibia 2010.
• World Economic Forum: The Global Competitiveness Report 2009-2010.
• Freedom House: Freedom in the World - Namibia 2009.
• Namibias's Zero Tolerance for Corruption Campaign: Corruption Timeline.

Tax Administration

• The World Bank & IFC: Doing Business 2010.
• 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 2010.
• World Economic Forum: The Global Competitiveness Report 2009-2010.
• 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

• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• World Economic Forum: The Global Competitiveness Report 2009-2010.
• US Department of State: Investment Climate Statement - Namibia 2009
• 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

• The Bertelsmann Foundation: Transformation Index - Namibia 2010.
• Freedom House: Freedom in the World - Namibia 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

• 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.
• 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

• Reporters Without Borders: Namibia Country Report 2010.
• The Bertelsmann Foundation: Transformation Index - 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.