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

Abstract

The negative and neutral developmental experiences of the Windhoek and Walvis Bay local authorities (LAs) with facilitating foreign direct investment (FDI) are disconcerting and contradict the bottom-up development approach in Namibia. The objective of this study is to analyse the legislative scope of LAs in facilitating and influencing FDI sustainability. A qualitative research method was followed by analysing secondary data and interviewing purposely selected key respondents. The thematic analysis of data was guided by two independent variables of interest: (1) decentralised functions of FDI facilitation in a multi-level governance (MLG) system; and (2) policy and legislative harmonisation in an MLG system. The key findings of this study indicate that the current scope of Namibian LA FDI facilitation functions are insufficient for influencing FDI sustainability for local development. The theoretical implications of this study are that it contributes to the sustenance of the MLG theory—which is inept at explaining the dynamics LAs experience in MLG systems. In the absence of an enabling legislative framework, the current study suggests the following practical implications: (1) bottom-up development using FDI cannot be achieved; (2) LAs cannot influence the sustainability of FDI for local development impact; and (3) LAs cannot protect local communities against the capitalist wrath and exploitative tendencies of FDI.

1. Introduction

The role of local authorities (LAs) in advancing local development in a multi-level government (MLG) system is instrumental for the bottom-up development agenda. Using foreign direct investment (FDI), LAs act as investment facilitating agencies (IFAs) to facilitate and influence the sustainability of FDI for local development. The instrumentality arises out of various functions and responsibilities accorded to LAs as IFAs, particularly the provision of services and incentives that lure and retain FDI. As demonstrated in later sections, this is the case in Namibia, where legislation provides LAs with such mandates. Namibia’s MLG system provides a decentralisation of powers, duties and functions to LAs. The Namibian Constitution, Chapter 12 and particularly Article 102, provides the hierarchical and vertical organisation of the government by having central, regional and local government levels and institutions [1]. LAs are at the lowest level of local government. While LAs, as IFAs, are incrementally provided with FDI facilitation functions, the literature [2,3,4] has not considered the impact these IFAs may have on the sustainability of FDI through the incentives and concessions they provide or fail to provide.

Considering the important role of FDI in meeting the development goals of national and sub-national government (SNG) units [5,6], the impact that LAs as IFAs may have on the sustainability of FDIs is an important point of interrogation for studies that aim at synchronising FDI with local development. FDI sustainability can be influenced by LAs as IFAs through incentives and concessions that are within their scope of FDI facilitation functions [3]. Incentives and concessions offered to foreign investors can influence their internal and external sustainability orientation; hence, the need to understand the conditions that influence FDI sustainability for local development from a LA FDI facilitation scope perspective. The conditions should be understood in light of the various functions and duties (and adequacy) the legislation bestows on LAs to facilitate FDIs. For instance, under the Export Processing Zones (EPZ) Act (Act No. 9 of 1995), in Namibia, the provision of FDI incentives (e.g., reduced rates on land use, water, electricity and waste management) places LAs at the core of their implementation. Section 22 (2) of the EPZ Act (Act No. 9 of 1995) facilitated an EPZ management company or the Offshore Development Corporation (ODC) (now renamed Namibia Industrial Development Agency (NIDA)) to contract LAs to render services (as concessions and incentives) to EPZ FDIs in Namibia [7].

Globally, the trend among developing states that follow a unitary form of government (e.g., Vietnam and China) has been that governments tend to decentralise functions of FDI facilitation. Scholars argue that the full decentralisation of FDI facilitation functions has the prospect of synchronising FDI developmental outputs with local development gaps [3,8]. In contrast, the bottom-up approach to development in Namibia has been embraced in several legislations (that is, Decentralisation Policy, Vision 2030 and the National Development Plans (NDPs); the Namibian government has decentralised FDI facilitation but to a very limited extent. This is particularly due to Sections 35, 44, 53 and 94 of the amended LAs Act (Act No. 23 of 1992) that empowers LAs to facilitate and aid FDIs by providing them with land, water, electricity and waste management services [9].

However, the above functions have left many LAs wanting to establish a development-based and mutually beneficial relationship with FDI [10,11,12]. This has been particularly the case under the EPZ regime in Namibia. The EPZ regime aimed to attract FDI that creates and increases industrial employment, creates and expands industrial investment, and encourages the transfer of technology and the development of management and skills in labour, amongst others, and in general fosters the development by virtue of the NDPs and Vision 2030 [9,13]. However, the results suggest a conflicting negative and neutral developmental experience with FDI by two LAs (that is – Windhoek and Walvis Bay).

The current study draws focus on the Windhoek and Walvis Bay LAs as case study units of analysis. This is in light of the indirect inferences made by Jauch [12,14], Flatters and Elago [11], and Enders [15] on the insufficient scopes of LAs in facilitating FDIs for local development. For instance, owing to its limited scope, Windhoek LA unsuccessfully attempted to facilitate the investment of Ramatex Textiles Namibia (RTN). Despite a host of concessions and incentives provided to RTN by the Namibian government in collaboration with the Windhoek LA, RTN was unsustainable for local development. RTN enjoyed duty-free export to the United States of America through the Africa Growth Opportunity Act. RTN was an exporting Malaysian subsidiary garment manufacturing company which invested in Namibia (Windhoek) in 2001 and relocated in 2008 under controversial circumstances.

The relocation of RTN preceded reports which suggest that it polluted the air and underground water reservoirs, illegally used land not allocated to it and did not generally cooperate with the Windhoek LA [11,12,14]. The case of the Walvis Bay LA paints a more neutral case with the facilitation of Namibia Press and Tools (NPT). NPT is a car parts manufacturer for the German market whose investment in Namibia dates from 1996 to date. Owing to the nature of business and the conduct of this foreign investor, the case of NPT suggests a neutral FDI sustainability index where reports indicate that it has created sustainable jobs in the local economy, consistent employee income tax contributions, and that the Walvis Bay LA enjoy a cooperative relationship with this foreign investor [15]. However, owing to its limited scope in facilitating FDI, the Walvis Bay LA could not go further to engage and persuade NPT to engage in corporate social responsibilities (CSRs) for a local development impact.

RTN and NPT were accorded EPZ status and receive(d) a host of incentives and financial concessions under the EPZ Act (Act No. 9 of 1995). The provisions of the EPZ Act (Act No. 9 of 1995) and the amended LAs Act (Act No. 23 of 1992) prompted the hosting LAs to provide some incentives, that is, reduced rates on land use, water, electricity, factory buildings and waste management, amongst others [7,9]. While the two-case study LAs constitute part of the biggest LAs in Namibia, the choice of the two FDIs was based on two primary objects: (1) RTN had the largest investment value (N$1 billion) of a single FDI under the EPZ regime; (2) NPT has the longest investment period (27 years by 2023) of FDIs under the EPZ regime. Furthermore, the choice of the two-case study LAs for this study was a result of the paucity observed in work by Jauch [12,14], Flatters and Elago [11], and Enders [15], who have failed to analyse the extent to which the limited Windhoek and Walvis Bay LAs scopes in facilitating FDI failed to positively influence the sustainability of the respective FDIs for local development. This is in light of Walsh [16] and Dadush [17], who indirectly and faintly found a cause-effect relationship between LAs as IFAs and FDI sustainability for local development.

Windhoek is a capital city in the Khomas Region that is centrally located in Namibia and serves as the cultural, social, political and economic centre of the country. On the other hand, Walvis Bay is a coastal city in Namibia’s Erongo Region located in the east. It is the second largest city in Namibia (after Windhoek) and is known for its deep sea harbour that accommodates large sea vessels. Additionally, these two LAs host the highest concentration of foreign investors [18], hence the need to analyse their scope in facilitating and influencing FDI sustainability for local development. Furthermore, no study exists that directly analyses how the limited scopes of IFAs, such as LAs, fail to influence the sustainability of FDI for local development, particularly from an MLG developmental state perspective, such as Namibia. To fill the identified research gap, the underlying study intends to address the following research question: To what extent has the FDI facilitation scope of the Windhoek and Walvis Bay LAs been suitable for influencing the sustainability of RTN and NPT respectively for development? The significance and contribution of this study emerge in light of Namibia’s legislative emphasis on the use of FDI in achieving the country’s development agenda by following a bottom-up approach as reflected in Vision 2030 and the NDPs [13,19]. As a result, this study aims to practically establish how the limited scope of LAs as IFAs failed to influence the sustainability of FDI for local development. This is important for academic literature that often does not look at SNGs in relation to FDI and development in MLG systems—hence, the contribution and significance of this study and the gap it fills. To feed into this narrative, the remaining part of this study is structured as follows: a literature review on the scope of LAs in facilitating FDI and the extent to which it influences FDI sustainability, the policy and legislative interface between LAs FDI facilitation and local development; research methodology; findings and discussions; and a conclusion to this study.

2. Literature Review

2.1. The LAs’ Scope of Facilitating FDI vs. FDI Sustainability

The Organisation for Economic Co-operation and Development (OECD) [20] differentiates between FDI promotion and FDI facilitation. FDI promotion is a marketing-based activity by any government with the intention of presenting itself as an attractive investment location [20]. Contrastingly, FDI facilitation is rooted in efforts aimed at increasing the ease of establishing, operating and expanding a foreign-owned company [20]. This is the basis on which the amended LAs Act (Act No. 23 of 1992) aims to ease and aid businesses such as FDI in their establishment and operation by providing services such as water and electricity supply, land and waste management services [9]. FDI facilitation follows successful FDI promotion while similarly being mutually beneficial. As found by the location theory, FDIs tend to be location specific, which has led to the decentralisation of FDI facilitation to SNGs, while FDI promotion often remains at the helm of national governments [21]. Krugman [21] highlights that the sustenance of the location theory for FDIs is rooted in location-specific attributes (e.g., low labour costs, good infrastructure, financial services, available incentives and concessions) that foreign investors consider in making an investment decision. For the context of this study, EPZ FDIs in Namibia were provided incentives as per the provisions of the EPZ Act (Act No. 9 of 1995) and the LAs Act (Act No. 23 of 1992) as amended. Combined, these legislations provided a limited scope to LAs in facilitating and influencing FDI sustainability for local development, while FDI promotion was primarily achieved by a central government agency, the ODC, now replaced by the NIDA under the Ministry of Industrialisation, Trade and Small-Medium Enterprise Development (MITSMED) [22,23].

It is worth mentioning that the efficient and effective provision of incentives and concessions provides a measure of satisfaction to foreign investors, particularly increasing the conduciveness of an LAs area as an investment location. This fosters FDI sustainability for development in host communities in terms of CSRs. Under the conditions that foster investor satisfaction with an investment location, LAs often find it easy to retain FDIs, thus influencing the sustainability of FDI through the provision of incentives and support services required to render foreign investors profitable and efficient. This is true in that the location and neo-classical theories of FDI posit that FDIs only invest in attractive locations that guarantee a return of profit on their investment [21,24]. However, in Namibia, the absence of local laws on partial or mandatory CSRs from FDI, as observed in India, similarly provides a limitation, as foreign investors are not compelled to be externally sustainable through CSRs. In an MLG system, the decentralised facilitation of FDI by LAs permit for specific investor needs to be met, which provides FDI outputs that close various local development gaps [25]. The end goal of achieving local development through FDIs propels LAs towards the provision of adequate support and incentives to foreign investors, thus increasing the prospects of FDI sustainability. However, this is also largely dependent on the degree of decentralisation and autonomy of the scope and functions of FDI facilitation to LAs. The EPZ Act (Act No. 9 of 1995), under which RTN and NPT operate(d), and the amended LAs Act (Act No. 23 of 1992) provide LAs with a decentralised scope of facilitating FDIs in Namibia. This scope of functions has been described as disabling with limited latitude for LAs as IFAs [23].

Ultimately, the facilitation of FDI by LAs requires a broader scope and strategy that fosters FDI profitability through the provision of incentives that reduce operational costs to increase investor profits. Researchers agree that the profitability of foreign investors impacts the growth and long-term investment of particularly manufacturing FDI in an investment location [26]. 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, this is only possible in an enabling legislative environment for LAs. Kuswanto et al. [3] buttress the above assertion by Marenga [27] and advocate for the sufficient empowerment of LAs through functions that expand their scope in facilitating FDIs to provide them direct autonomy in increasing and influencing the local development impact of FDI. This can be achieved by adequately supporting and fostering the sustainability and profitability of foreign investors.

In Namibia, a year after the promulgation of the EPZ Act (Act No. 9 of 1995), an IFA under the name of Walvis Bay Export Processing Zone Management Company (WBEPZMC) was established with powers and functions to facilitate EPZ status FDIs within the LA area [7]. Section 10 of the EPZ Act (Act No. 9 of 1995) makes specific references and mandates the establishment of the WBEPZMC. The WBEPZMC was established with a majority shareholding of Walvis Bay LAs, while the Namibian central government held nine percent (9%) through the ODC, as well as additional private shareholders [22]. The WBEPZMC, as a decentralised IFA in the Walvis Bay LA area, had a broader scope in facilitating FDIs, which included: (1) “handling of investors’ applications for EPZ status; facilitate in acquiring work permits and visas; erecting custom built factories to specific need of EPZ enterprises; leasing of serviced land to EPZ enterprises; assisting investors in the selection of site/factory facilities; serving as link between investors and the nation’s power centres; and facilitate with personal recruitment” [29] (p. 5). (2) “providing a particular area with infrastructure and services required to host EPZ companies. The investors then rent or buy land and buildings from the Management Company” [22] (p. 44). (3) “hassle free “one-stop” services in the areas of work permits, factory shells, power and water supplies, trade queries and labour issues and accessing equity finance” [30] (p. 50).

Legislatively, the WBEPZMC had a broader scope in facilitating the NPT compared to the Walvis Bay LA and the Windhoek LA with RTN. However, the operation of WBEPZMC as a stand-alone company created a schism with the LA, even though the Walvis Bay LA had majority ownership shares in the WBEPZMC. Indeed, the above further highlights a gap in the literature, which has not provided for a direct cause-effect relationship between the scopes of LAs in facilitating FDIs vis-à-vis FDI sustainability for the development in the context of Namibia’s MLG system [11,12,14,15]. As explained in Section 1 of this study, this is the context in which the innovation and contribution of this study permeate. Using the case of Namibia, particularly the Windhoek and Walvis Bay LAs, the current study builds on existing literature by analysing and establishing how the limited scope of LAs as IFAs fails to influence the sustainability of FDI for local development. Many countries around the world (e.g., Vietnam and China) have incrementally empowered their SNGs by expanding their scope beyond the conventional FDI facilitation functions to a more developmental-centric approach that synchronises FDI with the national and local development agenda – thus facilitating SNGs to influence the sustainability of FDI for local development impact. SNGs can be empowered to varying degrees [20]. This may include complete autonomy or semi-autonomy in facilitating FDIs. Nonetheless, although variances exist on the type of functions decentralised and the degree of autonomy associated with FDI facilitation, specific key FDI facilitation functions may be decentralised to LAs and allow for fostering FDI sustainability for local development [31]. These are: “Investor servicing to provide support to prospective investors in order to facilitate their establishment phase; Aftercare, which aims to retain established companies and encourage reinvestments by assisting investors in the challenges they face after their establishment; and Policy advocacy by identifying bottlenecks in the investment climate and providing recommendations to the government to address them” [31] (p. 3).

In addition to the above, providing LAs with bargaining and negotiating powers can aid in efforts of exchanging FDI incentives and concessions for CSRs that close local development gaps. The scope accorded to Namibian LAs does not fully stretch the spectrum of the above functions of FDI facilitation. The LAs Act (Act No. 23 of 1992) as amended, and the EPZ Act (Act No. 9 of 1995) provide for limited semi-autonomous FDI facilitation functions as LAs only implement these after consultation and approval by the central government through the ODC. Judging from the sustenance of the above-suggested functions of FDI facilitation by Novik and de Crombrugghe [31], their degree of decentralisation and implementation by LAs may significantly impact the sustainability of FDIs for local development. Notwithstanding this, the OECD [25] fails to account for the implementation dynamics facing LAs in executing such functions and the resultant impact on FDI sustainability. Dynamics may include noncompliance to economic, social, governance and local environmental laws by foreign investors. For instance, the exploitative character of FDIs may result in foreign investors resorting to unsustainable practices such as environmental pollution as a cost-cutting mechanism to increase profits [12,14]. 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. However, the absence of the required decentralised FDI facilitation functions for Namibian LAs prevents this ideal. This leads to the next section below, which attempts to link how an adequate scope of LAs FDI facilitation, pegged against its effective implementation, culminates into a local development impact by FDIs.

2.2. The Policy and Legislative Interface: LAs FDI Facilitation and Local Development

The advent of decentralised FDI facilitation as normatively grounded in the justifications of the MLG theory has attracted scholarly attention in relation to its impact on local development [32,33]. Considering that FDI facilitation is now being executed from an SNG perspective in several countries (e.g., China and Vietnam), there emerged a need to normatively synchronise this function with local development priorities and derive maximum benefits for the host communities in light of the sustainable development goals (SDGs). This can be achieved by empowering SNGs with the requisite functions to influence the sustainability of FDI for a local development impact. Considering the current socio-economic challenges in Namibia and the case study LAs, FDIs can contribute to the following SDGs directly: Goal 8—Decent work and economic growth; Goal 9—Industry innovation and infrastructure; Goal 11—Sustainable cities and communities; Goal 17—Partnerships for the goals, among others. Effective facilitation of FDI has a positive bearing on the sustainability of foreign investors in any country. 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. The developmental benefits of FDI have been buttressed by Kurtishi-Kastrati [34] and Nyamache and Nyambura [5], as employment, local linkages and technological transfers and CSRs, among others. However, Namibia’s EPZ regime appears to have been flawed from the onset as the sustainability element within the EPZs is silent, an element the United Nations Conference on Trade and Development strongly advocates for in reforming and setting up EPZs for sustainable development [35].

To achieve the SDGs in LAs, incentivising FDIs in the SDG priority areas on social and economic infrastructure relating to sanitation, water, health, education, telecommunications, electricity and transport is instrumental [36]. However, this requires LAs to be empowered because such a complex task should be performed carefully to avoid exploitation by foreign investors. The above modems in which SDGs can be achieved through FDI at the local level facilitates a bottom-up approach to development as advocated for by Mgoqi [37], Hermelin and Trygg [38], Vision 2030 and the NDPs in Namibia. Considering the close proximity of LAs to local communities, it is accepted that LAs are best positioned to ensure that local development needs and gaps are streamlined and harmonised with FDI legislation to ensure that foreign investors are lured into sectors in which they could close identified local development gaps through CSRs [39]. For Namibia, this is relevant as Section 11(5) of the amended LAs Act (Act No. 23 of 1992) requires LAs to continuously operate to safeguard the interests and needs of their immediate communities [9].

Despite several studies [40,41] attempting to elaborate on the development benefits of FDI, the gap in the literature arises in the absence of a motivating factor that propels LAs to prioritise the facilitation of FDIs in identified priority sectors as informed by their development agenda. The linkage between LA FDI facilitation and local sustainable development is an important area in development studies that pioneering scholars such as Herrmann [42] and Kline [43] emphasise. For instance, due to the labour-intensive nature of manufacturing FDIs, such investments have a great prospect of addressing high employment rates in a LA area [26]. Regrettably, studies have found that the linkage between FDIs and local development goals is not always clear-cut in legislation [44,45,46]. As suggested by Farole and Winkler [47], governments with decentralised FDI facilitation functions in developing countries often do not have a clear-cut linkage of FDI incentives and concessions vis-à-vis local development needs. This is a situation that may be attributed to ambiguous legislative provisions, as observed in the case of Namibia. This, indeed, deprives LAs of the development prospects of FDI to foster bottom-up development, as emphasised in development policies such as Vision 2030 and the NDPs. The challenge for Namibia is that while national legislation (i.e., Vision 2030, NDPs) prioritises the use of FDI for bottom-up development, LAs at the bottom and lowest level of government are not empowered to facilitate and influence FDI sustainability for local development. Hence, the legislative policy schism arises.

To increase the prospects for sustainable FDI development impacts for host communities, it is recommended that LAs should be legislatively empowered to collaborate with non-governmental organisations (NGOs) and development partners to assist with the implementation of FDI facilitation functions [48]. This is relevant for specialised areas where LAs lack capacity. The involvement of these stakeholders (e.g., NGOs) through partnerships may be instrumental in assessing the economic, environmental, social, and governance impacts of FDIs vis-à-vis local development goals as guided by the SDGs [49]. Doing this facilitates host governments to recalibrate their FDI facilitative functions toward fostering the sustainability of FDIs for local development. Establishing a criterion on the type of FDIs to attract for local development may further position LAs and development partners to appropriately streamline their efforts to benefit and be receptive to foreign investor needs, thereby making the facilitative process smooth. Development partners and NGOs will be better positioned to link inward FDI with LA FDI facilitative measures with criteria linked to sustainable FDI. For instance, the Economic Association of Namibia could aid in identifying gaps in local priority sectors that could benefit from FDIs, e.g., manufacturing FDIs, to reduce high unemployment rates. The development of a criterion for inward FDIs should be viewed as a pathway for attracting FDIs that resonate with local needs and aspirations. This is the backdrop against which scholars advocate for a recalibration towards the facilitation of sustainable FDI instead of merely any type of FDI—quality over quantity [50]. However, this reality requires that LAs are given an active role in facilitating FDI for local development.

Other studies have provided insights into how other countries, such as Vietnam and China, fare in terms of decentralised FDI facilitation for local development. For instance, studies by Vo and Nguyen [51] as well as Minh [8] find that the Vietnamese government has provided autonomy to its LAs in facilitating and managing FDI for local development. This has enabled LAs to derive direct FDI developmental knock-on effects such as local economic growth and industrialisation, poverty alleviation, employment opportunities, transfer of technology and skills, and local supply linkages [8,51]. Some of the successes of Vietnam with FDI are enabled by the direct engagements SNGs are allowed with FDI to ensure and influence their sustainability for local development through negotiations and concessions. The above findings prove useful and have implications for the case of Namibia and the current study. The importance and implications are that, indeed, other countries with MLG systems, such as Namibia, can learn from and emulate the successes of Vietnam by using FDI for bottom-up sustainable development. For this study, the above implies that Namibia, with the requisite legislative reforms, can also benefit from bottom-up development using FDI by empowering LAs with sufficient FDI facilitation functions.

Furthermore, findings from another study indicate that the legislative setup in China allows SNGs greater involvement in facilitating and managing FDI [52]. Decentralisation in China facilitates provincial governments to regulate the entry of FDI into their provinces, particularly with a focus on allowing FDI into specific priority and identified sectors for local development. Through this approach, China has, over the years, recorded great strides and success in attracting and influencing FDI sustainability for local development. Considering that China is a developing country that follows an MLG system such as Namibia, the implications of the above findings is that, indeed, Namibia can also follow the same path by empowering its SNGs (LAs) to regulate and facilitate the entry and operation of FDI for local, sustainable development. A comparison between Vietnam and China reveals that the former has achieved more elaborate strides in empowering their SNGs with FDI facilitation functions compared to the latter. Additionally, the above studies [51,52] have significant research gaps in them in that they do not consider the need for legislative harmonisation for synergy in national and decentralised laws on FDI facilitation for bottom-up development.

The need for facilitating FDI is in light of the developmental prospects they bring. As opposed to the old paradigm that emphasised FDI attraction on the principle of quantity, the new approach looks at the quality dimension of foreign investors [53]. Notably, the quality dimension is largely underpinned by the sustainability orientation of foreign investors towards host communities as influenced by host IFAs. This is the perspective in which LA FDI facilitative laws and functions should be framed. These laws should have a bias toward a direct determination of the contribution of foreign investors to the economic, social, environmental and governance developmental priorities of the host local and national governments [54]. Although unanimity exists among researchers on the potential positive impact of sustainable FDI for local, sustainable development [14,22,23,43,50,55], these researchers omitted the dynamics linked to the scope of LAs as IFAs and how this impacts or fails to impact FDI sustainability for local development. The importance of external sustainability for foreign investors can change over time depending on their levels of profits as influenced by the facilitative support they receive from IFAs. This is where the viscosity of LAs as IFAs in mitigating FDI sustainability challenges through various supportive and incentives-based mechanisms, which ensure that locals continue to benefit through development from such a foreign investor, becomes relevant.

At this juncture, the overall impact of the legislative scope of LAs in facilitating FDIs on the sustainability of FDIs has been established. However, as identified and problematised in this study, the Windhoek and Walvis Bay LAs as case studies for the current study warrant an in-depth interrogation of how their limited legislative scopes of facilitating FDI have prevented these LAs from positively impacting the sustainability of RTN and NPT for local development respectively. This emerges because of the paucity observed in studies [11,12,14,15], which have failed to provide an account and interrogation of how the disempowerment of the two-case study LAs in terms of FDI facilitation functions prevents them from impacting the sustainability orientation of the respective FDIs for local development and similarly subjects them to the exploitative tendencies that come with capital internationalisation. As supported by Hermelin and Trygg [38], this is important for MLG systems such as that of Namibia, which encourages bottom-up development and similarly protects local interests. In an effort to address this scholarly gap, the section below provides the methodical approach that was followed to address the crux and research question for this study.

3. Research Methodology

In terms of the research design, a multiple case study analysis research design was used to gauge how the limited scopes of the Windhoek and Walvis Bay LAs in facilitating FDIs have prevented them from influencing the sustainability of RTN and NPT FDIs for local development, respectively. As proffered by Gustafsson [56], the multiple case study approach best allows studies such as this one to draw focus on the Windhoek and Walvis Bay LAs so as to analyse and identify important variables in FDI facilitation for local development, respectively. Furthermore, this research design best allows and sets the parameters in which the crux of this study and research question can be best addressed. To address the scope of LAs in facilitating FDIs and their impact on FDI sustainability in Namibia, a qualitative research method is used in this study. The suitability of the qualitative method for this study was premised on the following qualitative variables of interest that require in-depth analysis. These are the dependent variable: the scope of LAs in facilitating FDI for local development, and the independent variables comprise: (1) decentralised functions of FDI facilitation in an MLG system; and (2) policy and legislative harmonisation in an MLG system. To satisfy the data requirements of these variables of interest, the qualitative method was thus uniquely suited considering that the required data sets were not readily available and evident hence this required in-depth information to address the research question of this study.

A purposive and judgemental sampling method was used to identify the key respondents. The suitability of this method arose out of the need to interview respondents who have distinct information, expertise and experience on the scope of LA FDI facilitation and the impact this has on FDI sustainability for local development. The sample of purposely-selected key respondents and informants was derived from a population of key stakeholder organisations. This included 1 key respondent from each of the following organisations that the authors approached for data collection: Windhoek LA, Walvis Bay LA, the WBEPZMC, NPT, Ministry of Urban and Rural Development, Namibia Investment Centre (Renamed to Namibia Investment Promotion Development Board) and the Namibian Association of Local Authority Officials. Other key respondents included an independent researcher, a decentralisation and public policy expert, a local government and sustainable development expert, a social justice activist, a community leader and an economist. This brought the total sample size to 13 respondents. A process of triangulation was used to collect data from different sources to foster the validity of this study. Qualitative interviews were conducted with key respondents from stakeholder institutions as guided by an open-ended, unstructured interview schedule. As supported by Creswell and Creswell [57], qualitative interviews are instrumental in addressing qualitative issues on the scope of LAs in facilitating FDI and the impact this has on FDI sustainability, which requires elaborate information to address the identified variables of interest. Furthermore, secondary qualitative data was collected from books, journals, investment reports, laws and policies on FDI. The study undertook respondent validation, which ensured and proved that the findings of this study were valid and reliable.

The analysis of data was conducted in light of the various thematic areas that have emerged from the earlier identified variables of interest. Broadly, qualitative data was organised with the aid of ATLAS.ti and analysed using content analysis to compare and contrast important similarities and differences between literature and empirical data as guided and informed by the MLG theory and system to strengthen the credibility of this study. In terms of the ethical considerations in this study, respondents are kept anonymous and confidential throughout this study. This is achieved by not revealing their name nor linking them to any specific responses obtained and presented in this study. This was conducted by referring to participants as ‘respondents’. Data obtained from the respondents have been stored on a multimedia storage device, and this has been kept in a steel-reinforced safe for no longer than two years to facilitate the publication of this study, where it would subsequently be destroyed by burning it in an inferno.

4. Findings and Discussion

The purpose of this study was to analyse the scope of LA FDI facilitation functions in Namibia and whether these functions are suitable and sufficient for facilitating and influencing FDI sustainability for local development. The review of the literature and the analysis of primary data collected through unstructured interviews were guided by the following research question: To what extent has the FDI facilitation scope of the Windhoek and Walvis Bay LAs been suitable for influencing the sustainability of RTN and NPT respectively for development? The current study addressed this research question by analysing the Windhoek and Walvis Bay LAs in facilitating EPZ FDIs, RTN and NPT, respectively. As mentioned in this study, the need for empowering LAs with sufficient FDI facilitation functions arises out of the need to maximise the developmental impact that FDIs provide and similarly empowering LAs to safeguard local socio-economic and environmental interests against exploitation and profiteering. Guided by the research question and specifically by the variables of interest, the analysis of data led to the emergence of two core themes through which results are presented, analysed and discussed. The arising thematic areas are: 1) decentralised functions of FDI facilitation in an MLG system; and 2) policy and legislative harmonisation in an MLG system. The results, as encapsulated in these themes (and sub-themes for the context of this study), are presented below and juxtaposed against the literature.

4.1. Decentralised Functions of FDI Facilitation in an MLG System

The current theme emerged owing to the variables of interest on decentralised FDI facilitation in Namibia. Against the background and conditions that Windhoek and Walvis Bay LAs are confronted with through their disempowerment of relevant FDI facilitation functions required to foster local development impact from FDIs, there is a need to exemplify the trajectory such functions have on influencing the sustainability of FDI for development. The absence of legislative discretion to LAs for the facilitation of FDI for local development has proven to be problematic. The current functions accorded to LAs in facilitating FDI according to the amended LAs Act (Act No. 23 of 1992) are: the supply of water to businesses (Section 35), the supply of electricity to businesses (Section 53), the supply of land for business purposes (Section 94 (1) (aj) (i) and (iv), and waste management services (Section 44 (1) (e) (vi) [9]. A majority of the respondents agree that the absence of adequately decentralised powers of FDI facilitation prevents LAs from maximising the developmental benefits of FDIs in light of their local development gaps. For instance, one respondent buttressed this by stating that: “the specific LAs of Windhoek and Walvis Bay have not been able to reap the raw developmental knock-on effects from FDIs because they do not have the mandate to engage and synchronise FDIs with local development aspirations…this is despite hosting the largest concentration of FDI firms in a country that embraces bottom-up development using FDI” (Personal communication, 25 October 2020).

The above is indeed reflective of the literature that has found that the absence of adequate decentralised FDI facilitation functions is a bottleneck to achieving bottom-up development using FDIs [8,37]. This is relevant for Namibia as the use of FDI for bottom-up development is specifically embraced in legislation such as the NDPs and Vision 2030, as highlighted in this study. Indeed, the need for sufficient decentralised FDI facilitation functions for LAs is further justified by the steady flow of inward FDI into Namibia. An overall increase in inward FDI across different sectors and industries has been recorded in Namibia, albeit with recorded fluctuations. From 1998 to 2008, FDI inflows amounted to N$ 25.2 billion and declined by 20% from 2009 to 2019 [58]. However, from 2020 to 2022, FDI inflows into Namibia were recorded at a value of N$ 19.8 billion [59]. This overall and steady attraction of inward FDI in Namibia further suggests the need for legislative reform that would enable LAs to tap into the developmental prospects FDI can provide. Further buttressing this, another respondent asserts that: “where the Windhoek and Walvis Bay LAs could have maximised on meeting local development goals through FDIs, the current dispensation simply does not provide for this, even in instances where meeting such a goal at the local level contributes to the same goal at the national level” (Personal communication, 26 October 2020). Indeed, this creates a quagmire and paradox at achieving a synergy of development between different levels of government in an MLG system, hence the rising need to adequately empower LAs to facilitate FDI for development through decentralisation.

A further need for sufficient decentralised FDI facilitation emanates from the challenges and the need to preserve local socio-economic and environmental development interests of LAs vis-à-vis FDIs. This arises particularly in light of existing national and local by-laws aimed at protecting local interests. Buttressing this, one respondent fittingly explains that: “Currently, LAs in Namibia are exposed to the exploitative tendencies of FDIs without any safety net to protect the socio-economic and environmental developmental interests of their local communities” (Personal communication, 23 October 2020). This creates a challenge where LAs, on the one hand, in terms of Section 11(5) of the amended LAs Act (Act No. 23 of 1992), are expected to exercise due care for local development interests [9], while at the same time being confronted with the challenges associated with foreign investor exploitation that threaten local interests. One respondent supported this by explaining that: “from the beginning, the Windhoek LA was completely disempowered and could not directly engage the RTN on claims of underground water and air pollution that was reported at factory” (Personal communication, 2 November 2020). This is despite legislation such as Section 57 of the Public and Environment Health Act (Act No. 1 of 2015) that mandates that LAs have the responsibility to protect the environment against all sorts of pollution [60]. As agreed by Minh [8], this paradox makes it even more daunting in a governance system where LAs are not empowered to mitigate the negative effects of foreign investors and similarly preserve their own development interests vis-à-vis FDI in their localities.

One of the respondents supported the above responses on the case of Windhoek and RTN by stating that: “RTN provides a scenario in which the disempowerment of the Windhoek LA exposed it to the capitalist wrath of foreign investors that pursue profits at the expense of local communities. RTN polluted underground water reservoirs, polluted air, housed employees on factory land (against municipal bylaws) and left a dam of dye ink sludge” (Personal communication, 2 November 2020). As observed with the case of RTN in Windhoek, the consequences of RTN for the Windhoek LA came as a result of the absence of direct FDI facilitation powers that could have allowed the LA to mitigate the above lamented negative consequences through bargaining and negotiations. Furthermore, this dearth of decentralised legislative provisions has prevented Windhoek LA from maximising the development prospects of RTN through CSRs. As suggested by Kuswanto et al. [3], provisions could be made for the bargaining and negotiating power of LAs in the exchange of incentives to foreign investors for FDI CSRs that correspond with local development priorities.

For the specific case of NPT in the Walvis Bay LA, the need for adequate decentralised FDI facilitation is emphasised. One of the respondents lamented that: “although the NPT did not provide adverse effects for the Walvis Bay LA as observed with RTN for the Windhoek LA, the NPT investment leaves desire for more developmental benefits for the local communities in light of the LAs development priorities” (Personal communication, 5 November 2020). It can be deduced that while NPT was internally sustainable, it was not externally sustainable for the host community through CSRs. Indeed, as supported by the literature [3], the decentralisation of FDI facilitation functions to LAs would allow them a step further to negotiate and bargain for the exchange of incentives (that is, land, water, buildings etc. at reduced rates) for targeted CSRs into key sectors that promote local development for local host communities. For instance, the specific development goals of the Windhoek and Walvis Bay LAs, as linked to the SDGs on goals 8, 9, 11 and 17 as discussed elsewhere, could be directly catered for through FDI CSRs. However, the LAs are not empowered to pursue this avenue owing to the absence of the required decentralised functions and legislative provisions. When asked about the need for a direct linkage between FDI and local development, the respondents were unanimous in the view that in Namibia, there is a need for legislative reform to ensure that LAs are sufficiently empowered (through decentralisation) to benefit more from FDIs for local development. This will ensure that national legislation is adequately implemented at lower levels by empowering SNGs such as LAs with the requisite powers and functions. Indeed, this will reverse the current predicament in Namibia where legislation such as the Vision 2030 and the NDPs prioritise bottom-up development using FDI, but in the same vein, LAs that are at the lowest level of government are not empowered to facilitate this. Owing to the above-recommended reform, the below theme provides a sketch of the effects of the current policy and legislative schism and how reforms thereof could improve the scope of LA FDI facilitation functions towards positively influencing FDI sustainability for local development.

4.2. Policy and Legislative Harmonisation in an MLG System (The Scope of LAs in Facilitating FDI for Local Development in Namibia)

This theme prompted opinions on the extent to which there is a link between LA FDI facilitation functions and local development. A majority of the respondents indicated that there exists a significant void of FDI developmental impacts at a LA level. This emerged largely owing to the absence of a normative framework on LA FDI facilitation geared towards influencing the sustainability of foreign investors for local development. Indeed, Namibia’s ambiguous legislative framework saw LAs not being empowered to facilitate FDI for development–despite bottom-up development using FDI being advocated for in legislation such as the NDPs and Vision 2030. Concerns were expressed about the consequences of the schism between FDI and local development in Namibia. For instance, as one respondent fittingly puts it: “the inability of Namibian LAs to maximise on the positive developmental knock on effects of FDI voids their overall developmental mandate as expressed in Section 11(5) of the LAs Act (Act No. 23 of 1992) as amended, Vision 2030 and the NDPs” (Personal communication, 25 October 2020).

The above view was echoed by other respondents who agreed that the EPZ regime, which guided the investment of RTN and NPT, was only meant to attract FDIs manufactured for export purposes only. The quantity-over-quality approach of the EPZ regime has created the development quagmire experienced by LAs with EPZ FDIs. Due consideration was not accorded to the possible developmental knock-on effects that local communities could directly benefit from EPZ FDI through their LAs. For purposes of attracting sustainable FDI for development as advocated for by Kline [43] and Marenga et al. [55], the EPZ regime was flawed from the onset for not placing emphasis on the attraction of sustainable FDI local development of host local communities, even in footloose industries such as manufacturing. Indeed, a poor regulatory framework on sustainable FDI further exacerbates the negative effects of FDI, particularly in footloose industries [61]. This flaw similarly contradicts other legislations (that is, Vision 2030 and the NDPs) and the MLG system that is embraced by the Namibian Constitution on the use of FDI to foster bottom-up development. Hence, the existence of a legislative schism.

In addition to the above, the absence of adequate decentralised legislative scopes that enables LAs to facilitate FDI by bargaining and negotiating the exchange of incentives for CSRs prevents LAs from deriving maximum developmental benefits from FDIs [3,8]. Further commenting on this, respondents were aggrieved that: “the current dispensation completely excludes LAs from any negotiations carried out between central government and foreign investors…this essentially prevents the representation of local development interests in the LA areas foreign investors intend to invest” (Personal communication, 23 October 2020). This is true in that the provisions of Sections 35, 44, 53 and 94 of the amended LAs Act (Act No. 23 of 1992) only prescribe that LAs provide land, water, electricity and waste management services to businesses, including foreign investors [9]. This is achieved on the instruction of the line Ministry, the MITSMED. The above services are provided to EPZ FDI at reduced costs as incentives, hence reducing operating costs to FDI. While this contributes to their internal sustainability, it is at a minimum scale as this does not topple over into external sustainability through CSRs.

Four respondents confirmed that, even in the case of RTN and NPT, the host LAs were not involved in negotiations from the onset and only got involved when they were instructed to provide land, water, electricity and waste management services to these FDIs per the provisions of the EPZ Act (Act No. 9 of 1995). Further illuminating the LAs’ developmental paradox vis-à-vis FDI, another respondent illustratively explained that: “LAs in Namibia are completely disenfranchised when it comes to maximising on the positive knock on effects of FDIs for local development. They are completely disempowered in this regard” (Personal communication, 5 November 2020). As a result, LAs cannot contribute to the national call for bottom-up development using FDI—pointing to an absence of policy and legislative harmony at both national and local levels. Furthermore, the status quo in Namibia contradicts the literature [3,8] that advocates for the decentralisation and empowerment of LAs to take up a more meaningful role in facilitating FDI for local development. This is in light of the developmental knock-on effects and benefits that FDIs often possess or that need to be harnessed through negotiations and bargaining. However, as observed in the case study LAs of the present study, this is not the case in Namibia. Contrary to what the literature has found [44,45,46], there needs to be a direct link between FDI and LAs’ local development goals, an element that has consistently been absent in the Namibian case. This is heightened particularly in light of the EPZ regime that seemingly placed emphasis on attracting quantity-over-quality FDI.

Providing a justification for this quagmire that LAs find themselves in, one respondent fittingly explained that: “the current governance system in Namibia is based on a unitary system that concentrates power at the central government level, until it is decentralised out of need and experience…we have not yet reached this point of realisation in light of the need to maximise the development impact of FDIs with local development interests more directly” (Personal communication, 28 October 2020). The policy harmonisation quagmire for LAs emerged owing to the policy expectation (as encapsulated in Vision 2030 and the NDPs) to propel local development using FDI, yet they lack sufficient functions to effectively facilitate FDI for local development. This study further revealed that the need for bottom-up development using FDI as encapsulated in the NDPs and Vision 2030 prompts for the consideration and decentralisation of more FDI facilitation functions, particularly those that will LAs bargaining and negotiating powers on the exchange of incentives for FDI local development CSRs.

The decentralisation of functions on a needs and normative basis is particularly catered for in the Decentralisation Policy [62], so it is possible. Indeed, the literature [44] has found that the political will should be visible in making reforms aimed at empowering LAs to take on a more active role in facilitating FDI for local development. From the above, it becomes evident that the case study LAs, namely the Windhoek and Walvis Bay LAs were not able to maximise the prospective developmental effects from the investments of RTN and NPT, respectively. This is because of a lack of broader policy harmonisation between development and FDI at both national and local levels of government. Furthermore, this status quo emerged owing to the disenfranchisement and disempowerment of LAs that prevents them from directly maximising and bargaining with FDIs to increase their external sustainability through CSRIs for local development. As a result, this study found that there exists a schism between the LA FDI facilitation scope in local legislation and the expected FDI development knock-on effects as expressed in national policy and legislative pronouncements. This serves to be regressive for a state that embraces bottom-up development using FDI. Considering the above policy harmonisation challenges, the sub-section below further enhances our understanding of how the scope of LAs may influence the sustainability of FDI for local development.

LA FDI Facilitation vs. FDI Sustainability vs. Local Development: Influence of LAs Scope on FDI Sustainability for Local Development

Considering the internal and external sustainability dynamics observed at RTN and NPT, there is a need to evaluate how sufficient decentralised functions of FDI facilitation could aid or discourage the sustainability of FDIs for local development. Decentralised FDI facilitation allows for IFAs such as LAs to influence the sustainability of FDIs by offering key essential incentives and concessions that foster the profitability and sustainability of FDIs. This conforms to a view by a respondent who asserted that: “the decentralisation of FDI facilitation functions would allow LAs to bargain, negotiate and offer incentives to FDIs that would positively impact on their business sustainability index at any given point, particularly when relocation is imminent or otherwise” (Personal communication, 25 October 2020). The respondent further added that: “key costly incentives such as free or reduced rates on land, water, electricity and waste management services can change the expenditure dynamics of a financially struggling FDI” (Personal communication, 23 October 2020). However, these incentives, under the scope of LAs in facilitating FDI, only provide a minimum impact on the internal sustainability of FDI by reducing operating costs and not to the extent of positively influencing external sustainability through CSRs. In Namibia, the prospects for CSRs are further lessened due to the absence of bargaining and negotiating powers of LAs in exchange for incentives for CSRs that fill local development gaps.

Indeed, the above could have prevented the closure of RTN to a certain extent, as Jauch [14] suggests that the expected profit margins were not being met by the entity. However, the limited nature of LAs’ FDI facilitation functions in Namibia is disabling, and this prevents them from directly engaging in FDI. It requires further mentioning that a foreign investor that is not internally sustainable (making a profit) will at no point be externally sustainable through a direct and deliberate contribution to local development interests through CSRs. As a result, LAs incentives and concessions should be aimed at specific areas that would cut FDI operational costs to encourage profitability as a major requisite for fostering external sustainability. As opposed to establishing the WBEPZMC, several respondents were of the view that the functions of this company should have been accorded to LAs, with additional powers of negotiating and bargaining to influence the sustainability of FDI for local development. This is especially relevant where incentives and concessions could be exchanged for FDI CSRs that could close local development gaps.

Respondents were unanimous in stating that the current legislative dispensation greatly disempowers LAs from maximising the development impact of FDIs for local development. Further stressing the inadequacy and paucity of legislation, there also emerged a central view that the disenfranchisement of LAs with FDI actually exposes LAs to adverse FDI consequences for local development. A view that scholars [63] similarly express. Some of these consequences, particularly for the context of the Windhoek LA with RTN, have been highlighted by Jauch [12,14]. In addition, the above was lamented by a respondent who explained that: “In as much as we want the development benefits of FDI, not all provide this as some provide adverse consequences as witnessed with the investment of RTN in Windhoek” (Personal communication, 23 October 2020). What has been observed with the case of the Windhoek and Walvis Bay LAs in light of the RTN and NPT FDIs, respectively, is that the absence of adequate regulatory provisions prevented these LAs from maximising the development effects of these FDIs, much less fostering the internal and external sustainability of FDI.

One of the respondents indicated for the case of RTN and the Windhoek LA that: “the development outcome and sustainability index of RTN could have turned out more positive for local communities had the LA been empowered with more FDI facilitation functions to bargain and negotiate with RTN” (Personal communication, 2 November 2020). While this was the case for the Windhoek LA with RTN, the required legislative reforms may still see the Walvis Bay LA benefitting more in terms of development from NPT. NPT is still operational in Walvis Bay. In summary, the results under the current theme have found that the current status quo of LAs and FDIs in Namibia is not conducive to the enhancement of local development through foreign investments, particularly in light of the national development agenda (i.e., Vision 2030 and the NDPs) that emphasise the use of FDI for development by following a bottom-up development approach in the MLG system. As mentioned in the current study, this is owing to the absence of legislative provisions that adequately empower LAs to influence the sustainability of FDI for local development.

5. Conclusions

The aim of the present study was to analyse the extent to which the FDI facilitation scope of the Windhoek and Walvis Bay LAs has been suitable for influencing the sustainability of RTN and NPT respectively for development. The most obvious conclusion to emerge from this study is that the scope accorded to LAs in facilitating FDI is not sufficient and did nothing to foster FDI sustainability for local development. Returning to the research question and the identified variables of interest to this study, it is now possible to conclude that the independent variables (decentralised functions of FDI facilitation in an MLG system; and the policy and legislative harmonisation in an MLG system) negatively impact the dependent variable (scope of LAs in facilitating FDI for local development) for the case study LAs. It became evident that the current scope of functions provides minimal prospects for effectively influencing FDI sustainability for local development. In addition to this, this study concludes that the absence of an adequate decentralised regulatory framework subjects LAs to adverse development effects from FDIs, as particularly observed in the case of the Windhoek LA with RTN. LAs are not empowered to protect local development interests against the adverse effects of FDIs. Furthermore, this study concludes that although the Walvis Bay LA did not experience adverse developmental effects from NPT, there is a great desire for a more positive local developmental impact. It became evident that LAs need discretion to directly engage FDIs through negotiating and bargaining powers to facilitate the exchange of incentives for CSRs in identified local development priority areas as defined in local development plans and strategies. This is particularly important amid a development policy framework (Vision 2030 and the NDPs) that emphasises the use of FDI for bottom-up development [13,19].

The findings of this study confirm the dynamics around MLG systems that embrace decentralisation. However, as submitted by Stephenson [64] and Chrabąszcz and Zawicki [65], the process of decentralisation is still evolving in developing countries and therefore requires a proactive approach to make adjustments and changes for normative development. This is important, particularly in the context of Namibia, where the government strives to achieve industrialisation and development by the year 2030. Indeed, the empowerment of LAs with facilitating FDI for development may go a long way in meeting this development aspiration in an MLG system. The findings and contribution of this study complement those of earlier studies [3,8,37] in that they reinforce the need to decentralise functions of FDI facilitation to LAs in Namibia that host FDIs. The current study is important as it is one of a few (if not the only one) that focuses on the limited scope of LAs in facilitating FDIs. It further contributes in several ways to our understanding of decentralised (full/partial) functions of FDI facilitation and the impact it can have on FDI sustainability for local development. What becomes obvious is that Namibian LAs do not have the power to influence the sustainability of FDI for local development. As illustrated in this study, this could be possible through decentralised bargaining and negotiating powers that could see LAs exchanging incentives in their mandate for CSR initiatives. It further highlights the dynamics that LAs are confronted with in a system of MLG with limited and disabling powers to fully carry out their development mandate at the local level. In Namibia, this development mandate for LAs is particularly encapsulated in Section 11(5) of the LAs Act (Act No. 23 of 1992) as amended and broadly in Vision 2030 and the NDPs that emphasise bottom-up development by using FDIs, among others [9,13,19].

As observed with the Windhoek and Walvis Bay LAs and their respective FDIs, this study further confirms the findings of Anh et al. [45], Kuswanto et al. [3] and Minh [8] on how limited, decentralised powers of FDI facilitation serve as a crippling factor that prevents LAs from having full autonomy in driving their development agenda through FDIs and by similarly influencing the sustainability of such FDIs. As a result, these findings add to a growing body of literature on public administration and, more specifically, on local governance in a system of MLG. Despite the exploratory nature, this study offers some insights into the challenges LAs in Namibia face on account of being legislatively and pragmatically excluded from facilitating FDI to benefit local development. Taken together, the overall findings of this study in the context of Namibia have practical implications for other unitary developing countries that follow an MLG system and prioritise bottom-up development. This emerges owing to the legislative limitations that unitary developing countries often subject SNGs to. In the absence of an enabling legislative framework in other countries, the current study suggests the following implications: (1) bottom-up development using FDI cannot be achieved; (2) LAs cannot influence the sustainability of FDI for local development impact; and (3) LAs cannot protect local communities against the capitalist wrath and exploitative tendencies of FDI. The above implications further our understanding and fill the theoretical sustenance of the MLG theory. The MLG theory has been insufficient in explaining the dynamics SNGs, such as LAs, face in MLG systems that do not have enabling and empowering legislative systems for SNGs.

The principal limitation of this study permeated on account of the COVID-19 pandemic. A few key respondents were affected by COVID-19, and as such, they could not participate in this study. However, this limitation has been curtailed by obtaining alternative respondents, and this facilitated data saturation. One of the strengths of this study is that it presents a comprehensive analysis and insight into a specific issue of local governance and development and how legislation has been disabling – an issue often overlooked in studies on local development. Further work is needed to fully understand the implications of excluding LAs in FDI facilitation for local development and how this thwarts LA efforts at meeting local needs through FDI. Such a study should focus on other Namibian LAs not covered herein as a way to paint a broader picture and demonstrate how this status quo disempowers LAs in pursuing development and exposing them to FDI exploitation. Additionally, the current study can be repeated using the same variables for research on other unitary states that prioritise the use of FDI for bottom-up development.