Beyond the Fear of Foreign Investment: What Namibia Can Learn from China

Diana Ndeshihala Hainana

In Namibia, discussions about foreign investment increasingly begin with the nationality of the investor rather than with the quality of the investment.

There is understandable concern among some Namibians about increasing foreign involvement in important sectors of our economy.

Chinese investment is sometimes viewed through concerns about labour practices, resource extraction and economic dominance.

Similar anxieties arise when American or other international interests become increasingly prominent in strategic industries.

These concerns about foreign investment should not become hostility towards foreign investment itself. Namibia’s history gives us every reason to care deeply about sovereignty, ownership and who ultimately benefits from our natural resources.

Citizens are entitled to ask whether foreign companies employ and train Namibians, pay their fair share of taxes, respect labour and environmental laws, procure locally and leave meaningful economic value behind.

However, there is an important distinction between being cautious about the terms of foreign investment and becoming suspicious of foreign investment itself.

The question Namibia must confront is this: Can we achieve rapid economic transformation while remaining deeply suspicious of the foreign capital, technology, expertise and market connections that could help accelerate that transformation?

During my studies in China, one book that significantly shaped how I think about this question was Jun Fu’s Institutions and Investments: Foreign Direct Investment in China during an Era of Reforms.

Its central lesson is particularly relevant to Namibia: 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. Its transformation was gradual, strategic and highly experimental.

Beginning in the late 1970s, China introduced reforms that allowed foreign capital into selected parts of the economy. 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. It opened its economy while remaining intensely focused on its own development objectives. That distinction matters. Surely, foreign investment is not development in itself.

A foreign company can enter a country, extract a resource, employ relatively few local workers, import most of its expertise and equipment, export raw materials and repatriate much of its profit.

That may technically constitute foreign investment, but it does not necessarily transform the domestic economy.

Another investor may establish local production, employ and train citizens, transfer technology, procure from local businesses, pay taxes, process local resources and connect domestic companies to international supply chains.

That is a very different form of investment.

For a small open economy such as Namibia, the quality of foreign investment therefore 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 such as 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. Namibia should seek investment that changes what we produce, what we export and what productive capabilities remain in the country long after the initial investment has been made.

This is where the debate needs to change. The question should not mainly be whether Chinese, American, European, Indian, South African or other investors should be allowed into Namibia.

The better question is: What institutions must Namibia build to ensure that investment from any country advances Namibian interests?

Namibia already recognises the importance of investment. The existence of the Namibia Investment Promotion and Development Board, whose mandate includes facilitating both domestic and international investment, reflects an understanding that capital and private-sector activity are important to economic transformation.

But attracting investment and governing investment must develop together. Making Namibia easier to invest in should never mean making Namibia easier to exploit.

We can reduce unnecessary bureaucracy while strengthening labour-law enforcement. We can accelerate investment approvals while maintaining environmental protections and regulatory certainty.

We can welcome multinational companies while using sound competition law and investment policy to prevent market dominance and create meaningful space for Namibian enterprises.

The objective should be a legal and policy framework that is predictable enough to attract investors, yet strong enough to protect national interests and ensure that investment contributes to Namibia’s broader development priorities.

In this sense, law and policy should function like the banks of a river: they should not stop the flow of investment, but provide the boundaries that guide it in a purposeful direction.

Without sufficient room to flow, investment is constrained; without strong boundaries, it can move in directions that may not serve the national interest.

The task of a capable developmental state is therefore to create enough space for investment to flourish while ensuring that its flow ultimately contributes towards the country’s long-term development objectives.

For major investments, 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.

Where incentives are granted, Namibia should be able to identify what the country receives in return.

Where natural resources are involved, we should increasingly ask whether investment helps Namibia move beyond exporting raw materials towards processing, manufacturing and building domestic industrial capacity.

This is also why our concerns about foreign influence should be directed towards behaviour and outcomes rather than nationality.

A bad investment does not become good because it comes from a country we consider friendly. Likewise, a productive investment should not automatically become threatening because it originates from China, the United States or another major power.

The standard should be Namibian.

Does the investor obey our laws? Does it treat Namibian workers fairly? Does it contribute to skills development? Does it create productive employment? Does it strengthen local businesses and value chains?

Does it contribute to value addition? And ultimately, does the investment support Namibia’s long-term development objectives?

If the answer is no, then strong institutions should empower the state to intervene regardless of where that investor comes from.

If the answer is yes, we should be careful not to reject useful capital, technology and economic opportunities simply because they are foreign.

The concerns of Namibians who fear exploitation are therefore not necessarily wrong. History gives us good reason to be vigilant. But the solution to those concerns cannot simply be economic isolation.

It must be stronger institutions and, critically, stronger policy frameworks.

Namibia needs to become much more deliberate about how policy is developed and, just as importantly, what happens after a policy is adopted.

Too often, the conversation ends once a strategy, law or policy document has been approved. Yet the real test is whether it works in practice.

If an investment policy is intended to create jobs, build local industries, transfer skills or support value addition, then those outcomes should be tracked.

The government should be able to tell whether the policy is producing the results it was designed to achieve and, if it is not, why not.

This is where implementation and monitoring matter. Policies should not be treated as fixed documents. They should be tested against real outcomes, reviewed regularly and adjusted where necessary.

This is another important lesson from China’s development experience. Policy experimentation allowed authorities to test reforms, observe their effects and refine them before wider application.

Namibia need not replicate China’s model, but the underlying principle is valuable: development policy should be capable of learning.

For Namibia, institutional strength should therefore mean more than having laws and policies on paper. It should mean having the capacity to formulate appropriate policies, implement them consistently, monitor their effects, evaluate their developmental impact and adapt them as circumstances change.

That is how foreign investment can be governed as an instrument of national development rather than simply an inflow of foreign capital.

Perhaps one of the greatest lessons from China is that openness and sovereignty are not necessarily opposites.

China welcomed foreign capital, technology, markets and expertise while remaining firmly focused on Chinese national development. Namibia cannot simply copy China. Our history, population, institutions and economic structure are different. But we can learn from the principle.

We should neither romanticise foreign investors nor demonise them.

Foreign investors come because they expect returns. Namibia’s responsibility is not to expect foreigners to develop our country for us. It is to construct institutions capable of aligning the legitimate pursuit of private profit with the equally legitimate pursuit of national development.

The opposite of neo-colonialism is not economic isolation.

It is institutional strength.

Namibia does not have to choose between sovereignty and foreign investment. Strong institutions are precisely what make it possible to have both.

The question, therefore, should not be: “How do we keep foreigners out?”

It should be: “On what terms do we invite investment in, and how do we ensure that when capital enters Namibia, Namibia develops with it?”

*Diana Ndeshihala Hainana holds an LLB and an MPA specializing in national development from Peking University in Beijing, China.