The Bank of Namibia (BoN) is pressuring the Business and Intellectual Property Authority (Bipa) to introduce a modern N$82 million digital registration system that would, among others, help trace individuals involved in financial crime.
However, leaked documents show that some government officials are sceptical about the estimated cost of this project, which has ballooned from N$20 million to N$82 million.
The system, which would record the ultimate owners of businesses, has been touted as a way to increase transparency and avoid global financial sanctions.
The Ministry of Finance and Public Enterprises, the Financial Intelligence Centre’s acting director, Zenobia Barry, and her colleagues at the BoN are in support of the new system.
Top government officials have approached the New Zealand company Foster Moore to implement the new system.
The company, led by chief executive Martin Riegel, is also behind Botswana’s Companies and Intellectual Property Authority (Cipa) registrar of companies.
Foster Moore submitted a proposal to Bipa on 23 March.
In the proposal it said officials from Bipa, the Master of the High Court and the Financial Intelligence Centre (FIC) have reached out to Foster Moore to seek assistance with implementing modern online registers for beneficial ownership, businesses and trusts.
Foster Moore indicated in its proposal that it intends to provide the systems for N$82 million.
This is N$62 million more than the N$20 million budgeted for by Bipa.
Foster Moore did not respond to questions sent to it on Wednesday.
The New Zealand company said in its proposal that Bipa chief executive Vivienne Katjiuongua invited it to submit a proposal for the modernisation of Bipa’s business registry software system in 2019.
“Due to the pandemic, Foster Moore was unable to deliver its response in 2020,” the company said.
Bipa spokesperson Ockert Jansen says the current registration platform is old and no longer supports the ease of doing business in Namibia.
According to him, Bipa has not made any agreements with Foster Moore or any other registry provider.
Foster Moore and NRD Companies are the only two known global registry providers endorsed by Open Ownership, a global driver for beneficial ownership disclosures,” he says.
Jansen says Bipa initially advertised a bid for a new business registration system that did not include beneficial ownership or trust and deeds registers.
He says the need for a beneficial ownership register developed this year due to recommendations from the Financial Action Task Force (FATF).
“Therefore, the N$20 million budgeted for integrated business registration is bound to increase due additional requirements, such as the beneficial ownership register,” he says.
Jansen says Bipa on 6 July asked the finance ministry for permission to invite companies to bid.
This is due to the deadline for Namibia to show it meets certain financial standards, he says.
Last year, MTC submitted a proposal to Bipa to provide the system for N$5,6 million.
It’s unclear if this includes all the features offered by Foster Moore.
Another Namibian entity, Green Enterprise Solutions, offered to do the job for N$15,8 million, while Riqueza Digital Era Consultants wanted to do it for N$10,9 million.
A series of emails between Barry and Katjiuongua shows Bipa told its counterparts at the central bank it cannot afford to implement the project.
Barry told Katjiuongua there was an internal resistance from Bipa.
The FIC said it would inform BoN governor Johannes !Gawaxab and finance minister Iipumbu Shiimi of the matter.
Barry asked whether Bipa’s strategic executive for information and communication technology, Veneranda Shoombe, is the authority’s actual chief executive.
“Is Veneranda (Shoombe) the CEO of Bipa now? We don’t understand,” she said in an email dated 28 June.
Barry’s email came after Shoombe sent another email to Katjiuongua alleging she was not comfortable with the instructions given to her as it was not discussed with Bipa management.
“From my experience, system implementation fails whenever there is not enough buy-in from all the stakeholders . . ,” Shoombe said.
She said she understood time constraints but believed management needed to meet immediately and discuss the matter.
According to Barry, Shoombe’s email was “shocking”, especially given the fact that the country had run out of time to acquire the systems.
“It is a pity that some people do not seem to care whether Namibia gets greylisted by the FATF or not,” Barry said.
The FIC advised Katjiuongua to explain to her management that a decision cannot be made regarding which service provider to choose if they cannot determine the precise costs of the Foster Moore system.
“At this stage there is still room for negotiation on the costs, but we will not be able to negotiate if the scoping mission does not take place,” Barry said.
She said the prime minister’s office directed that the system be explored as it appears to be valuable.
She indicated that the FIC would fund the N$1,9 million for Foster Moore’s scoping mission.
Bipa board chairperson Immanuel !Hanabeb has said that the authority has no budget for the procurement of a beneficial ownership register.
In a letter to the secretary to the Cabinet, George Simataa, he said Bipa had budgeted N$20 million for the integrated business registration system, but no budget was made available for the procurement of a beneficial ownership register.
!Hanabeb said the integrated business registration system has been a long-awaited strategic initiative tied to Namibia’s Vision 2030, the fifth National Development Plan (NDP5), and the first Harambee Prosperity Plan.
He said it is also part of Bipa’s five-year strategic plan from 2021 to 2026.
!Hanabeb said Bipa’s management should engage the Central Procurement Board of Namibia to exploit the possibility of expediting the procurement process.
He said this could take place through an exemption process as per the Public Procurement Act.
According to documents, the finance ministry and the BoN at a meeting in June this year said they would ensure they get sufficient funding to afford the system “at whichever cost”.
BoN spokesperson Kazembire Zemburuka last week referred The Namibian to Bipa.
Transparency International says obscure ownership enables legal entities to become vehicles for illicit activities, act as pawns in corruption schemes, and evade or avoid taxation.
“Beneficial ownership information is perceived as a powerful policy tool to combat anonymity.”
Although Bipa has made progress over the past five years in providing information to the public about the ownership of companies, the records of some entities involved in key government contracts cannot be found.
The Institute for Public Policy Research (IPPR) has for years pushed for an improved Bipa system.
Earlier this year, its think tank said: “Bipa should make every effort to maintain a complete and updated company registration database.”