The Namibia Local Businesses Association (Naloba) has urged Works and Transport Minister Veikko Nekundi to reconsider his announcement requiring foreign contractors to allocate at least 10% of their contract value to Namibian-registered companies or suppliers for railway projects. Naloba Vice President Peter Amadhila expressed concerns that the threshold is too low. He argued that Namibian enterprises should receive a substantially larger share of major infrastructure projects to create value for the nation.
According to Minister Nekundi, the 10% allocation is a minimum requirement for bidding and contract documentation for the railway upgrade. However, Amadhila questioned the adequacy of this threshold, suggesting that it is insufficient to promote meaningful local participation. Naloba argued that past instances of foreign participation in Namibia's natural-resource and economic sectors resulted in limited local benefits, and this approach should not be repeated in major infrastructure projects.
Amadhila proposed that the minimum workscope threshold for Namibian enterprises should be 40%. He suggested that major projects should be awarded to Namibian enterprises, which could then appoint international subcontractors or technical partners where specialised expertise is required. This approach would enable project funds to flow through Namibian enterprises, which would pay their appointed international subcontractors.
Amadhila criticised the government's consultation process with local businesses before announcing local-participation thresholds. He argued that leaders should consult relevant stakeholders, such as Naloba, before making such announcements. According to Amadhila, local businesses need opportunities to accumulate experience, capital, and capacity to grow into larger enterprises.
Minister Nekundi responded to Naloba's concerns, stating that the 10% allocation is a minimum and that he is open to discussion on increasing it. He expressed his willingness to engage with stakeholders, adding that his role is to serve the interests of Namibians. Nekundi's comments suggest that there may be room for negotiation on the local workscope requirement.
The Namibia Local Businesses Association's call for a higher local workscope requirement reflects concerns about the potential impact of foreign participation on local businesses. Naloba's proposal aims to promote greater local participation and benefits from major infrastructure projects. The association's suggestions will likely be considered by the government as it moves forward with the railway upgrade project.
The outcome of the negotiations between the government and Naloba will likely have significant implications for the participation of local businesses in Namibia's railway projects. A higher local workscope requirement could provide more opportunities for Namibian enterprises to grow and develop. The government's response to Naloba's concerns will be closely watched by stakeholders interested in promoting local economic development.
Key points
- The Namibia Local Businesses Association proposes a 40% local workscope requirement for railway projects.
- Minister Veikko Nekundi stated that the 10% allocation is a minimum and is open to discussion on increasing it.
- The association argues that local businesses need opportunities to accumulate experience, capital, and capacity to grow into larger enterprises.
