N$17m per job exposes FDI gap

Inefficient
Foreign investment struggles to translate into jobs
MW Analytics
  • 29 Minutes Ago

Namibia's ability to translate foreign investment into employment is coming under scrutiny, with new research suggesting that the country has attracted substantial capital without a corresponding increase in jobs.


Simonis Storm Research estimates that Namibia received N$114.9 billion in net foreign direct investment (FDI) between 2021 and 2024, largely driven by exploration activity in the Orange Basin.


However, employment in foreign-owned businesses increased by only 6,835 between 2019 and 2023, reaching 62,817 workers.


In its report, Who Gets In: Namibia's Investment Bill, Sector by Sector, published on 5 November, Simonis Storm calculated that the investment inflows equate to approximately N$17 million for every additional job created in foreign-owned businesses.


The research cautions that the periods covered by the investment and employment figures differ, but argues that the comparison helps explain the government's growing emphasis on local ownership and economic participation.


"Set N$114.9 billion of FDI against 6 835 extra jobs and the rough ratio is about N$17m per added job," the report said.


"The periods differ, but it explains why the government wants ownership and participation, not just inflows,” it added. 


According to Simonis Storm, approximately 70% of foreign investment flows into capital-intensive sectors, limiting their immediate employment contribution.


The report also points to unemployment of 36.9% in 2023, using the strict definition, while 41.9% of young people were not in employment, education or training.


Capital attraction gaps


Simonis Storm argued that the investment policy debate is increasingly being shaped by the gap between capital attraction and the broader economic benefits generated by investment.


"Capital has arrived, jobs have not, and the inflow is cooling," the report said.


Its analysis also highlighted a slowdown in quarterly net FDI inflows, which fell from N$13.1 billion in the first quarter of 2025 to N$6.5 billion in the second quarter and N$6.6 billion in the third quarter.


Inflows turned negative in the fourth quarter of 2025, recording an outflow of N$2.8 billion, before recovering to N$6.7 billion in the first quarter of 2026.


The research attributes the moderation partly to exploration activity moving towards appraisal, with the next investment wave expected to be driven by development capital for major projects.


"The next wave, development capital for Venus, hydrogen and mines, prices approval and dispute risk most heavily," Simonis Storm said. 


Ownership versus investment


The findings come as Parliament considers the Investment Promotion and Facilitation Bill, which seeks to modernise Namibia's investment framework while strengthening local participation and employment creation.


The proposed legislation provides for certain economic sectors and business activities to be reserved for Namibian investors, while others could be subject to local ownership and control requirements.


The government has argued that attracting investment and increasing Namibian participation should be complementary objectives.


However, Simonis Storm's research raises questions about whether the proposed policy framework can increase local economic participation without undermining the capital inflows needed to develop the economy.


"New approval and ownership rules will land first on the sectors that most need fresh capital to recover," the report says.