Insolvency regulations to be reviewed
Tenth Round Table held
02 December 2019 | Justice
Sylvester Mainga; Justice of the Supreme Court; “The effectiveness of the insolvency process also depends on other institutions…”
Public policymakers, private legal practitioners and judicial officers from the Southern Africa Development Community (SADC) gathered to discuss and share information on legal reforms taking place within the insolvency sector across Africa.
The tenth INSOL and World Bank Group Insolvency Law Africa Round Table was held in Swakopmund under the theme “Celebrating a decade of reform in Africa and anticipating what lies ahead”.
Speaking on behalf of the chief justice Peter Shivute, the justice of the Supreme Court Sylvester Mainga said that the efficiency of insolvency depends on institutions like courts which, in order to be effective, need to be reformed and equipped with well trained and knowledgeable judicial officers.
“A better regulatory framework is only the first step towards an effective insolvency process. We cannot overlook the role of the judiciary in implementing reforms initiated within our jurisdictions. We must constantly ensure that our judicial systems keep pace with business and technological developments.”
Mainga said that a holistic consideration of necessary legal and policy frameworks for insolvency, demands respect for the rule of law and international human rights standards.
He said that Namibia’s Insolvency Act (Act 24 of 1936) is outdated and does not provide a sound regime to regulate modern and complex insolvency matters, particularly in the area of cross-border disputes.
According to Mainga, the importance of effective insolvency law and procedures is most clear in the aftermath of a financial crisis.
“Corporate restructuring and recovery, including that of state-owned enterprises, become especially important during those times and are not possible without a stable, predictable insolvency regime. Such a regime is important not only in immediate aftermath but for economic development, as it provides a sense of protection and comfort to local and foreign investors.”
In terms of the general commercial legal environment, the World Bank Group Flagship report of 2019 recorded that with 905 reforms, Sub-Saharan Africa holds the record for the highest number of reforms captured by Doing Business over the past 15 years. A total of 107 reforms were recorded across 40 economies in Sub-Saharan Africa in this year’s report.
In the Namibian context, Doing Business 2019 ranked Namibia 107 out of the 190 economies across the world.
The two-day meeting saw delegates use practical case studies to critique corporate rescue plans and non-performing loan management, as well as asset-tracing and fraudulent transactions. They also discussed broader stakeholder negotiations in cross-border insolvency matters, challenges for reform, and the impact of secured transactions on the availability of credit.