THE South African-dominated Namibian banking sector has been put on warning that the country is intent on increasing local participation in financial services.
Three of the four commercial banks operating in the country — First National Bank Namibia, Nedbank and Standard Bank Namibia — are South Africa owned.
The financial services sector contributes 35% to Namibia’s gross domestic product.
The Namibian Financial Sector Strategy, launched by the government this week, is aimed at transferring ownership of the banks to locals by 2021.
Namibia’s Finance Minister Saara Kuugongelwa-Amadhila said yesterday the financial sector had been given 10 years to institute a "paradigm shift" and improve local stakes, or the government would push them into compliance.
Bank Windhoek, which used to be owned by Namibians, recently ceded 49.9% to Barclays Bank, which owns a majority stake in Absa in SA.
Analysts condemned the deal, approved in May, for exposing Namibia’s financial sector to a foreign country’s risk.
The immediate priorities of the financial sector strategy, due for full implementation by 2013, are an assessment of the skills required for an indigenous financial sector in Namibia, and strengthening the professional qualifications of the country’s banking staff. Ms Kuugongelwa-Amadhila said there had been no consultation with SA on the strategy.
"There is no need for any decision to be referred to SA when we can do that (make decisions) ourselves.
"It is important for Namibia to have its locals play a part in their financial sector," she said yesterday.
"We should be taking certain decisions here for our people.
"I believe decisions in the financial sector made locally are more beneficial and cater better for Namibians."
Ms Kuugongelwa-Amadhila said it was vital that the Namibian financial sector increase local ownership and management within 10 years if the government’s goal of achieving an economic growth rate of 7% by 2030 was to be met.
She said the strategy had also been necessitated by the continued exclusion of 31% of Namibia’s "bankable population" from the financial sector.
Among other demands, the Namibian government wants the financial sector to boost capital re-investment in the country and prepare "agreeable plans" to make banking affordable.
As in SA, the banks operating in Namibia have high service charges.
Meanwhile Dixon Norval, FNB Namibia’s spokesman, said the company was ready to support the Namibian government in its quest for localisation. "We are in agreement with the government in principle, but we will still wait and see if the strategy will be fully implemented," he said.
Expressing similar sentiments, Old Mutual Group Africa CE Johannes Gawaxab said his institution saw the changes coming early and had made "huge strides" in creating a black economic empowerment drive by transferring 14% of the shares in the company to local shareholders.
"There is nothing new in what the Namibian government is saying.
"We are way ahead of the trends and we will be happy to read their policy document and see how we can map the way forward," Mr Gawaxab said.
CAJ News
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