The Brief reported in its 4 April issue that ‘the Bank of Namibia (BoN) Governor Johannes !Gawaxab has cautioned against excessive regulation, warning that stringent policies could hinder economic growth and drive businesses into the informal sector. He stressed the need for a regulatory framework that fosters business efficiency and investment while ensuring consumer protection. “Namibia is a developing country, yet our regulations often mirror those of more advanced economies. We must acknowledge that our unique socio-economic challenges require a regulatory approach that is both flexible and progressive,” !Gawaxab said. The Governor highlighted the risks of excessive regulation, citing its potential to stifle innovation, discourage investment, and push businesses into the informal economy. He also emphasised the importance of fostering a regulatory environment that enables businesses to operate efficiently while maintaining necessary safeguards for consumer protection.”
The topic of overregulation is close to our hearts, and we have on numerous occasions lamented our regulators slavishly following the advice of experts from developed countries. Regarding the impact of the FIMA on the pensions industry, we have repeatedly expressed our concern about the high governance and compliance costs associated with this new law, which fund members and pensioners will ultimately bear. This law contains around 600 compliance requirements for retirement funds and their administrators. Considering the wide discretion the law affords the regulator in interpreting governance and compliance requirements and regulating these, it will be impossible for any service provider and fund to avoid severe penalties for failure to meet the law’s requirements, in the regulator’s opinion.
Considering our new President’s resolve to reduce costs through a leaner government structure. Should our regulators not also follow her example? I suggest that now is the time to pause and reevaluate the appropriateness of the FIMA to avoid overregulation and its consequences, as the BON Governor cautioned.
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This article summarises the understanding, observation and notes of the author and lays no claim on accuracy, correctness or completeness. RFS Namibia (Pty) Ltd does not accept any liability for the content of this contribution and no decision should be taken on the basis of the information contained herein before having confirmed the detail with the relevant party. Any views expressed herein are those of the author and not necessarily those of RFS.