In Namibia, discussions about foreign investment often focus on the nationality of the investor rather than the quality of the investment. This has led to concerns about increasing foreign involvement in key sectors of the economy. Chinese investment, in particular, has raised concerns about labour practices, resource extraction, and economic dominance. However, it's essential to distinguish between being cautious about the terms of foreign investment and being suspicious of foreign investment itself.
Namibia's history has made its citizens sensitive to issues of sovereignty, ownership, and who benefits from the country's natural resources. As a result, citizens are entitled to ask whether foreign companies employ and train Namibians, pay their fair share of taxes, respect labour and environmental laws, and leave meaningful economic value behind. The question Namibia must confront is whether it can achieve rapid economic transformation while remaining cautious of foreign capital, technology, expertise, and market connections that could help accelerate that transformation.
A book that has shaped the author's thinking on this issue is Jun Fu's Institutions and Investments: Foreign Direct Investment in China during an Era of Reforms. The central lesson of the book is that foreign investment is most useful when it operates within strong institutions and clearly defined national priorities. China's economic rise was not simply the result of "opening its doors" to foreigners but was a gradual, strategic, and highly experimental process that began in the late 1970s.
China introduced reforms that allowed foreign capital into selected parts of the economy, and Special Economic Zones became laboratories for testing new economic policies. The state observed what worked, adjusted what did not, and gradually expanded successful reforms. Laws governing private enterprise and foreign investment were progressively amended as the economy evolved. Importantly, China did not abandon the role of the state in order to attract investment but opened its economy while remaining intensely focused on its own development objectives.
For a small open economy like Namibia, the quality of foreign investment matters as much as its quantity. Equally important is the extent to which such investment is aligned with national development priorities through effective coordination with institutions like the National Planning Commission. Investment that expands productive capacity, strengthens export industries, introduces technology, and builds domestic supply chains can contribute not only to employment but also to the country's broader economic resilience and development goals.
The objective should not simply be to record higher FDI inflows but to seek investment that changes what Namibia produces, what it exports, and what productive capabilities remain in the country long after the initial investment has been made. This requires building institutions that ensure investment from any country advances Namibian interests. Namibia already recognises the importance of investment, as reflected in the existence of the Namibia Investment Promotion and Development Board.
To achieve this, Namibia should negotiate deliberately around local procurement, employment, apprenticeships, skills transfer, technology transfer, value addition, and opportunities for local businesses to participate in supply chains. The country's concerns about foreign influence should be directed towards behaviour and outcomes rather than nationality. A capable developmental state must create enough space for investment to flourish while ensuring that its flow ultimately contributes towards the country's long-term development objectives.
Key points
- Namibia must balance caution on foreign investment with the need for economic transformation.
- The quality of foreign investment matters as much as its quantity for Namibia's economic development.
- Namibia should focus on building institutions that ensure investment advances its national interests.
