Sustainable Development and Corporate Social Responsibilities of Foreign Investors in Namibia: Is there a Need for a Mercantile Refocus?

Abstract

This paper draws focus on various corporate social responsibilities (CSR) by foreign investors within the context of a developing state, Namibia. Consensus has been achieved on the positive impactful role CSRs of foreign investors have in propelling sustainable development of the country. Through the lenses of evolving discourses on the role of CSR by foreign investors in the sustainable development arena, the current paper problematises the rather absent, silent and ambiguous approach the Namibian government has taken in encouraging CSR by foreign investors within the country. This paper found that the legal and policy framework on CSR in Namibia remains ambiguous, especially concerning foreign investors. This has made it impossible for the country to fully benefit from the developmental advantages that CSR activities by foreign investors bring with. Within the context of Namibia, this paper discusses the dynamics involved in the practice and recommends strategies to serve as a guideline in practicing CSR by foreign investors. These strategies centre around the legal, economic, informative and networking spectrums of CSR, with a particular emphasis on profitability (mercantilism) retention by foreign investors in light of it being a liability.

Analysing the Scope of Local Authorities (LAs) in Facilitating and Influencing the Sustainability of Foreign Direct Investment in Namibia: A Case Study of the Windhoek and Walvis Bay LAs

“…Indeed, the profitability of FDI increases their prospects of being sustainable for the immediate host community(ies), as observed in the case of Ohorongo Cement in Namibia [27]. Another study buttresses this by stating that profitability is an important requirement for external FDI sustainability [28]. Hence, the need for LAs as IFAs to focus on contributing to the profitability of FDI through incentives and concessions.…”

“…However, if LAs are not accorded adequate FDI facilitation functions, they will have limited bargaining powers to influence the sustainability of a foreign investor and mitigate their unsustainable, exploitative acts. Inferring from a study by Marenga and Kakujaha-Matundu [28], it can be argued that the ability of foreign investors to make profits and simultaneously be externally sustainable is a status quo that LAs should strive to maintain through FDI facilitation. This nexus forms the basis on which FDIs are rendered sustainable.…”

“…For instance, the provision of essential incentives such as sophisticated capital-intensive factory facilities is central to the operational and cash flow dynamics of a foreign investor; thus, this may internally and externally render them sustainable. Using the mercantilist explanation as inferred from Marenga and Kakujaha-Matundu [28] and supported by the location and neo-classical theories [21,24], FDIs can only be sustainable in an investment location that provides high and sustained profits-profits that are realistically projected to be maintained at the same or higher level in the future. This is the justification that should drive LAs in effectively facilitating FDI for local development.…”