Namibia has the aim of creating a successful social market economy. When we look at the recent history after the Second World War, we see the rebuilding of the German or Japanese economies as one of the economic success stories of the last century. Upon closer examination, the building blocks of the state have included the ability to know the movement of all its residents. For example, in Germany, when a person moves from one city to another, they have to register themselves at the local “Rathaus” or municipality. When we investigate the ability of the German business to trade with another, and more importantly to provide suppliers credit, we notice the importance of trade registers, both government and privately created.
The creation of a central public register in Namibia would have many benefits for the country. The most important would be the updating of information needed for planning purposes, without having to wait for the ten yearly censuses.
Central Register for Namibia
The register shall include all information collected by the government on its citizens, residents and all legal entities. The information should be subdivided as follows:
i.Register of Residents;
ii.Register of Marriage Contracts;
iii.Register of Business;
iv.Register of Professions;
v.Register of Property Ownership (land & vehicles);
vi.Register of Licences for Natural Resource and Utilisation;
vii.Register of Trademarks, Patents and Copyright
viii.Register of External Trade;
ix.Register of Court Sentences, Proceedings, Declarations
x.Register of Bankruptcies and Insolvencies
xi.Register of other legal entities:
- Non-Government Organisations
- Religious Organisations
- Welfare Organisations
Each of these registers will be stored electronically and will consist of the information fields as indicated in the following sections.
Register of Residents
This database will register all private persons within the Republic of Namibia. From the time of entry into Namibia (by birth or travel) all persons will be allocated an unique identity number. This will be the ID used for all communication with the government structures.
For example, upon birth the parents will have the baby registered at the hospital or clinic. A birth certificate will be issued that will include the ID number. All hospital or clinic visits will be monitored for this ID number ensuring the child receives all necessary inoculations and other treatments. In addition, the parents will receive notification about the next visit via SMS.
When the child enters school, all school records, achievements, difficulties, etc. will be recorded for the school career. Aptitude testing and personality tests with historical data being recorded will also assist the learner in identifying possible career opportunities. When the young person enters the job environment, they have recommended areas of work, as well as potential employers according to their records during their school career. The system will also allow the job-seeker to provide curriculum vitae with verifiable results via the register.
Postal and physical addresses will be updated regularly by the individual through the registration at the local constituency level. Throughout their lives, all tax information, government benefits, etc. will all be allocated via the unique number allocated upon the birth of the individual. The individual will also have the choice to enter a last will and testament into the database.
Upon the passing away of the person a death certificate will be made out and then only biographical information will be kept in the system with all other information being erased.
Register of Marriage Contracts
The register of contracts will allow married couples to register their preferred marriage agreement, that is, in community of property, out of community of property and then also whether, with, or without accruement. This enables the partners to register their separate estates at the time of their union so they can be used as a basis for any legal disputes that might arise. This will also allow potential creditors to accurately identify the status of their claims should any arise.
Citizenship issues
The most wonderful moment of my life must be the day I got married. I was standing in the front of the church and looked down the aisle at the woman, (already the mother of my child) being brought forward by her father. This was the person who intended to stay with for the rest of my life. Unfortunately, we do not always appreciate what we have and ten years I was a divorced man. (For the record, I accept full blame for the failure of the marriage. I have always had a clear vision of what I wanted from my life, namely a diplomat, and unfortunately this meant that a wife would have to give up her career.)
This story is not about marriage though; it rather has to do with the problems created by the government for our union. You see the woman I married was born in Upington, South Africa.
The Prime Minister is presently proposing a revision on citizenship in the Constitution (April 2009) that requires ten years residence in Namibia before citizenship is granted. I disagree completely! If the amendment goes through my ex-wife would be denied citizenship because we were not ten years in Namibia - I represented Namibia for two years in France.
Now, if I met a person from another country would I give up my citizenship to be with them? And thus not be allowed to return to my home country if I wish?
At the time of Independence it was decided to not allow dual citizenship by Namibians. The argument I remember was the issue of South African citizens who were members of the defence force. If dual citizenship (meaning that a person is a citizen of two countries at the same time), was allowed, this would increase the number of voters that would vote – probably against the will of the majority. Therefore, an individual had to give up all other nationalities to be allowed to become a Namibian citizen.
My proposal is that this issue has to be revisited. I propose Namibia allows Dual Citizenship.
Since writing this section April 2009, the High Court has ruled that no Namibian by birth or descent may have their citizenship taken from them. This should mean that these Namibian citizens may be allowed dual citizenship. This still needs to be clarified at this time – June 2011.
Register of Business
All information relating to commerce and industry should be kept in this register. This will serve as an official and public register of all merchants. The public information should include the trading name, legal form, postal and public addresses, type of business and contact details. The record shall also indicate the Corporate Domicile of the business.
Dependant on the legal form of the company, certain other information will also be required, but not made public unless done so by the business concerned. The types of business are:
- Sole Trader
- Partnership
- Close Corporation
- Private Limited company
- Public Limited company
- Company not for Gain
- Co-operative
Register of Professions
This register will include the medical profession and other professions required by law to be registered with a statutory body, for example architects, lawyers, etc. The register will also stipulate the required education necessary for all titles by professionals, for example Dr., Rev., etc.
Register of Property Ownership (land & vehicles)
These are two registers, namely a register for land ownership and the other for vehicles. (A third register will also be created for all electronic goods once the electronic numbering system of electrical goods is put into regulations by the Namibian Communications Commission.)
Land Register
There are three types of properties to be registered, namely housing, commercial and communal land. (In terms of housing we refer to dwellings serviced by a municipality or town council.)
In communal land, the local village chief or other individual has in the past granted Permission to Occupy (PTO) which is valid for 99 years. These PTO’s have to also be entered into the land register.
Vehicle Register
The vehicle register is presently managed by NATIS (Namibia Traffic Information System), under the Ministry of Works and Transport. This database will be linked to the central register.
Register of Licences for Natural Resources and Utilisation
Namibia is a land of filled with resources that are primarily exported. To ensure transparency and the maximum benefit to all who stay and work in Namibia, the register will list the natural resources, and if there is a licence, the licensee it is granted to for their utilisation.
This register will not replace the normal licensing of resources and the information required in these applications.
Register of Trademarks, Patents and Copyright
These registers are presently managed by the Ministry of Trade and Industry and the Ministry of Information and Communication Technologies. The aim is to provide one place of registration for all intellectual property. This is important especially in a knowledge-based world where the law for copyright protects the author of music, books, and computer software including database contents.
Register of External Trade
The register of external trade will indicate all imports and exports for Namibia. This is presently collected by the Ministry of Finance for customs purposes but they do not make it available to the public. This data is however filtered to not include any business specific details and shared with the National Planning Commission. This information has been collected and provided upon request but no long-term, self-researching system has yet been put in place.
This register will allow exporters and importers real-time information about the prices of goods being traded in Namibia and allow them to be compared world-wide. The International Trade Center (ITC) already has such a program on the Internet, but Namibian data has not yet been centralised and input on a regular basis.
Register of Court Sentences, Proceedings, Declarations
The findings of the courts of Namibia regarding both civil and criminal cases will be available to the public. The content of these registers and the length of time such information should be kept on the record shall be at the discretion of the judiciary.
A register on sexual offenders will also be created.
Register of Bankruptcies and Insolvencies
Entries about private persons and legal entities with regard to bankruptcy and insolvency proceedings are stored here. The register will enter, co-ordinate and monitor the measures to be carried out in these procedures, for example a payment agreement between the person, and the respective creditors. The official dates are recorded here and released for publication.
Register of other legal entities
To be able to do business in a secure and trusting environment, all organisations that trade and do business in a specific name must be registered. This includes all non-government organisations, welfare organisations, regional and international bodies as well as religious organisations.
Register of Wills
Namibia needs a wills register. There are many cases where a Last Will and Testament is never discovered. It is not possible for the relatives to go from each lawyer, to each bank or to a financial advisor to find out if the deceased made a will. It would also not be surprising if there were many insurance policies left unclaimed because the beneficiaries were not aware of them. The Register of Wills must also only be accessible upon provision of a valid death certificate.
How will a Central Register help the economy grow?
TRUST.
Germany and Japan after World War II
After the Second World War, both Germany and Japan had to reconstruct and reform. The former military regimes were replaced by democracies. We can compare West and East Germany and we see the economic prosperity in the West was due to the democratic form of government. In the West, the citizens were able to trust their government.
Trust is at the heart of the matter.
People and businesses work in a market environment that attaches values to their goods and services through the price mechanism. Their inputs such as work, capital and natural abilities are similarly priced.
If the people could not trust each other, all economic activity would stop. Therefore we can see a relationship between the level of trust (confidence) and the level of economic activity.
A Central Register allows us to trust one another in Namibia. With the continuous monitoring and updating of all economic and personal information we will be able to do more business, employ people, give credit, enter in partnership, etc. with one another because we know where to get the latest information on businesses and individuals.
For example:
- If a bank wants to grant a loan, it can trust the information being provided from a central register, and is guaranteed that the details of the borrower is correct, and will be updated as they change.
- A business will be able to give supplier credit because it is aware of the financial situation of its clients.
- A small or informal business can become larger and registered as it has a history of trading and payment.
- A National Loan Register will allow the central bank (and government) monitor indebtedness.
- Companies in neighbouring countries can trade easily with local companies.
- Statistics on business and employment can be updated and monitored on an ongoing basis.
The ability to save information on a computer (for example in the central register) will also necessitate new legislation to be promulgated. These laws are especially necessary in our Information and Communication enabled society where information is stored on electronic retrieval systems.
Legislation for informational privacy
The Namibian Constitution states in Article 13 Privacy:
“(1) No persons shall be subject to interference with the privacy of their homes, correspondence or communications save as in accordance with law and as is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the protection of health or morals, for the prevention of disorder or crime or for the protection of the rights or freedoms of others.”
The Constitution thus guarantees only “Physical Privacy”. The storage of personal and business information (“Informational Privacy”) must have legislation that will prevent misuse of this information. In addition, the individual in Namibia must be able to access any, and all, information that is stored by the state (public institutions).
There are thus things that are needed to guarantee informational privacy:
- Data Protection Act;
- Privacy and Electronic Communications Regulations;
- Freedom of Access to Information Act
Data Protection Act
The Data Protection Act gives you the right to know (access) the information being held on you. It also sets certain key principles that anyone who handles personal information must comply with. The Act also establishes an Information Commissioner. The data covered is any information which can be used to identify a living person. This includes names, birthdays, addresses and other contact details. It only refers to information stored on computers.
The key principles of the Act must include:
- Data may only be used for the specific purpose that it was collected;
- Data may not be shared with others without permission of the individual whom such information is about – unless there is a legitimate reason;
- It is illegal for other parties to obtain this information without permission;
- Individuals have the right to the information about them subject to certain conditions;
- Personal information should not be kept longer than necessary;
- All businesses that collect personal information must register with the Commissioner; and
- Incorrect information must be corrected when it is brought to the attention of the data storage business.
Privacy and Electronic Communications Regulations
These regulations must control the people that wish to send out electronic direct marketing, for example email and text messages (SMS). Individuals have the right to refuse unsolicited marketing messages (“junk mail”) by fax, phone email and text message. Companies and organisations have the right to refuse marketing messages by phone or fax.
A register needs to be created to store the individuals and companies that refuse to receive such marketing messages.
Freedom of Access to Information Act
The Constitutions states in Article 95 Promotion of the Welfare of the People:
“… (e) ensurance that every citizen has a right to fair and reasonable access to public facilities and services in accordance with the law;”
This Act must give the individual the right to obtain information being held by the state (public institutions) unless there are good reasons that such information should be kept confidential. These institutions include government departments, regional and local government as well as schools. (The access to information held by private institutions is expected to be covered by the Data Protection Act.)
Need for Credit Bureau Legislation in Namibia
SUBMISSION ON BANKING REGULATIONS VIS-À-VIS CREDIT PROVISION
The following is the submission made to the Parliamentary Standing Committee on Economics, Natural Resources and Public Administration at the public hearings on bank charges and regulations on 14 July 2006 in Windhoek.
The banking system in Namibia is presently facing difficulties in their abilities to provide financing for individuals and business, especially small and medium enterprises (SME's). This problem is further influenced by the present level of non-performing debt being experienced in all sectors that provide credit. This poor performance on loans has led to many institutions having to recoup their losses, and provide themselves with profit, through high interests and "innovative" banking charges.
It is my opinion that this can be addressed through the increased usage of Information and Communication Technologies. As an example, I attach a paper on the need for credit bureau, and the establishment of an economic database to address this need.
Through the sharing of information between public and private sectors (with the appropriate legislation to prevent abuse), a reliable source of information can be provided which will necessitate the banking institutions to become more competitive to attract clientele. This clientele in turn will be able to negotiate for better rates, and lower charges, if they are aware of their own credit worthiness.
I remain at the convenience of the Committee to provide any further information they might require to encourage the necessary changes in legislation, as well as provide authority to the necessary public institutions, to implement a system to encourage the responsible growth of the credit sector.
Lastly, I must add that I believe such a credit agency, whether public or private, will only facilitate the provision of credit, and not provide moral influence on us as a society to ensure we keep our side of the bargain and keep up our financial obligations.
_________________________________________
Submission Paper:
Providing affordable financing in Namibia
Introduction
In many developing countries the providers of finance have access to information in databases that help them to asses the creditworthiness of an applicant for credit. With the appropriate credit risk management tools, a lender can reduce the default levels, and provide finance at a cheaper rate to creditworthy clients. The organisations that gather data and operate these services are known as Credit Bureaux, Credit Information Services, Credit Registries, Credit Reporting Agencies or Consumer Credit Reference Agencies.
In Namibia, there is only one company (in 2006), Transunion ITC, which provides a credit bureaux service for consumer information and they collect primarily negative information (negative – that is information on credit defaults, judgements, etc.). A joint-venture between NamBizDotCom and Creditreform Germany has been developing a commercial database of over 11,000 companies and has completed a basic consumer database of 250,000 people in January 2007. This credit information service (CRIB) is yet to be made commercially available.
Credit Information Service
The creation of a credit report depends on the availability of information gathered from public records, statutory information, credit applications and credit accounts on the individual consumers and businesses. The bank (or other lender) accesses the service in the form of written reports and uses it to judge the application risk before supplying the credit. The bank can also use the credit report, and its credit risk rating, to determine the amount of the loan as well as the interest and other bank charges.
The usage of a credit report with more than just negative information assists growth in the country by stimulating the consumer credit economy. Borrowers can be assessed for risk in an objective way based on credit payment history so credit can be allocated more efficiently. Many “new” borrowers in Namibia have no credit history, and assessment can be difficult with additional supportive reputational collateral. This reputational collateral can include:
- proof of physical address
- ownership information on property
- family associations
- informal business history
- etc.
The existence of a Credit Bureau with sufficient information should assist growth by stimulating the consumer credit economy. Borrowers can be assessed for risk in an objective way based on their own histories so credit can be allocated more efficiently. Borrowing by high risk borrowers is also now controlled and the market is opened for new low risk borrowers.
Lenders, consumers, businesses, government and central banks all benefit from Credit Bureaux. This is why the World Bank, IFC and USAID organisations are all promoting and facilitating the development of efficient and capable Credit Bureau services around the world.
The effectiveness of a Credit Bureau varies depending upon a number of factors including data availability, data quality, operating ability and legislation. Supportive legislation and a sound technical infrastructure are crucial to effective operation.
The services provided by a Credit Bureau expands from the basic credit report to extended financial information, historical factors, and in many cases, can assist in tracing the debtor in the case of default (debt collection).
In Namibia, the banks are charging high fees and interest rates because of the “difficulties in assessing risk”, and the “unavailability of data”, especially regarding the physical address of clients.
Dilemma collection of data
It must be noted that the collection of data must be controlled to ensure there is no abuse of privacy rights.
The CRIB database has been created with over 11,000 companies and 250,000 consumers. This data includes:
• Full names
• ID Number
• Postal address
• Physical address
• Telephone
• Employer records
(Only +/- 25,000 records are complete)
The creation, cleaning and mining of the data does meet standards of copyright, but such information must be regulated. It must be kept in mind, if an individual has been able to create such a database, what databases are being created and maintained by corporations in and outside of Namibia?
Namibian Situation
The databases available in Namibia range from
- private sector models that include information relating to your account details and histories, Multichoice, MTC, Sanlam, etc.; and
- public sector, such as Home Affairs ID section, Electoral Roll, etc.
At present, there is no legislation to:
- control the information being held on a credit record;
- avenue for corrections to be made; and
- enforcing openness in regards the negative reply to credit application.
The legislature also has the opportunity to regulate a range of charges that banks may charge according to the rating of individual consumers and businesses. (e.g. Basel in EU).
Proposal
There is need for the establishment of an economic database that includes both consumer and commercial information. It is proposed that it should be a Private-Public Sector Partnership to protect the privacy rights (data protection) of individuals.
A new look at credit law
Present-day policies are aimed at improving the performance of credit markets, such as group-lending or creation of collateral, and typically aim to change incentives for borrowers.
In contrast, pre-modern credit market interventions, such as usury laws, often targeted the behavior of lenders.
We need to look at the stipulation that accumulated interest cannot exceed the original principal, irrespective of how much time has elapsed. We interpret this rule, which is found in Hindu, Roman, and Chinese legal traditions, as giving lenders the incentive to find more capable borrowers, who will be able to repay early, thereby improving the allocation of capital.
Preparation for the creation of a business information system for Namibia
(Status as at January 2011)
Background
The creation of an economic database for Namibia started shortly after Independence from South Africa in 1990. The lack of business information was identified as the main constraint on business growth primarily amongst the black community. Mr. Milton Louw was appointed at the Namibia Chamber of Commerce and Industry (NCCI) in 1992 to develop an Information and Communications Department, and more specifically a database of entrepreneurs.
During the next ten years Mr. Louw has worked in Frankfurt, Germany, with the Deutsche Industries and Handel Tag (DIHT) as well as in Paris, France for the United Nations Industrial Development Organisation (UNIDO). During these years, he has been a proponent of the creation of a central register and is well-known in Namibia as an expert on economic development and specifically an expert on business information systems. The database of Namibian business (NamBiz) was created in 1998, and it is still the largest and most researched database in the country.
In June 1999, Dr Frormann and Mr. Louw met to discuss the development of an economic database for Namibia. As a first step, a workshop was held on 19 August 1999 with representatives of the banks, government, development agencies and private sector.
Training in Creditreform Düsseldorf
After discussions with the role-players, Dr Frormann invited Mr. Louw and Ms. Charmaine Johr to Düsseldorf for an intensive training programme on the Creditreform methodology and software (June 2002 – July 2003). A government delegation of Ministers, public sector employees and business people also visited Düsseldorf (and the VVC) during this period to familiarise themselves with the database management and risk assessment services that could be developed in Namibia. Dr. Frormann and Mr. Louw also visited GTZ headquarters in Germany to update them on the activities
Upon their return to Namibia, a business census was carried out to gather more detailed information for the database. A consumer database was also started and presently has more than 1,1million records. A NamBiz Business Directory was published and over 10,000 copies were distributed. The directory also contained detailed information on the establishment of credit rating system.
During this census, a Small- and Medium-sized Enterprise (SME) base-line study was carried out together with the Namibian Economic Policy Research Unit and the relevant ministries.
Mr. Louw also undertook a regional roadshow and discussed with various national investment promotion agencies and private sector partners about the implementation of the programme across the Southern African Development Community. Positive interest has been shown especially in Angola, Botswana and South Africa.
National Awareness
From 1999 till last year, Dr Frormann and Mr Louw have met with many institutions to sensitise them on the need for an economic register, amongst them:
ñ Bank of Namibia
ñ Development Bank of Namibia
ñ Namibian Financial Institutions Supervisory Authority
ñ Ministry of Trade and Industry
ñ National Planning Commission
ñ Gesellschaft für Techniese Zusammenarbeit (GTZ)
ñ Deutsche Entwikkulings Dienste (DED)
ñ Namibia National Chamber of Commerce and Industry
ñ Namibian Parliament
ñ Ministry of Works and Transport
ñ Anti-Corruption Commission
ñ Ministry of Labour
During this period Mr. Louw has disseminated information to the general public through newspaper articles, monthly magazine inserts, television and radio. He has maintained a bi-weekly email newsletter to over 2,000 business and political leaders informing them of the benefits of an economic register for Namibia.
Legislation
One of the most important results of these activities, have been the recognition that certain laws and regulations need to be put in place that will assist in the economic development of the country. Mr. Louw has been actively involved in advising government on these laws, for example:
ñ Information and Communications Act
ñ National Credit Act
ñ Financial Institutions Act (money-laundering)
ñ Financial Institutions and Markets Bill
ñ Privacy and Data Protection
ñ Electronic Transactions Act
A members motion has also been submitted in Parliament for the creation of a central register as proposed originally at the workshop in 1999. The second reading was completed in September 2010.
Clients
Besides the normal business activity of providing business reports, various government agencies also wish the company to assist in creating and maintaining the various databases needed for economic growth. These include
ñ Labour Database
ñ Managing and maintaining the national employment records for the Ministry of Labour and the Social Security Commission
ñ Anti-Corruption Database
ñ Managing involvement of government employees in private businesses
ñ Financial Information Act
ñ Updating the information on persons and companies involved in financial transactions such as banking, land ownership, etc
National Credit Register
This has been one of the main results of the activities undertaken. The law stipulates that a National Credit Register shall be created and it is highly probable that this will be done together with Creditreform
Conclusion
The most important result of these laws and regulations is the understanding by Government agencies that an economic register is no longer a “nice to have” but a necessity. Support has been given for the creation of a company that can provide researched information on businesses.
In October 2010, Dr Frormann invited Mr Louw to Düsseldorf for a period of three months to finalise the creation of a database and risk management company in Namibia based on the Creditreform model.
Lastly, it is important to note that Namibia as a member of the oldest customs union, SACU, automatically is able to do business across the BLNS countries of Botswana, Lesotho, Namibia, Swaziland and South Africa. When such an investment is undertaken across SACU and established from Namibia, the Government of Namibia has various incentives that will be made available to the company.