The future of Namibia's huge Ramatex clothing factory is in the balance after the country's government refused to buy the plant from its Malaysian owners.

Up to 5,000 jobs could be at risk at the factory on the outskirts of Namibian capital Windhoek, which is the country's largest private sector employer.

Ramatex's Malaysian owners gave the Namibian government an ultimatum, saying that if it did not buy the factory and equipment for N$490m (US$82m), the factory would close and all the equipment would be shipped abroad.

The deadline passed on Wednesday last week, but the factory was reported to still be operational on Friday. The government has decided not to buy the factory because there is no expertise to run it.

The Ramatex plant opened in 2002, part of a plan to take advantage of the preferential entry to the US market afforded by the US Africa Growth and Opportunity Act (AGOA). Ramatex invested US$150m, with another $20m in public money used to fund local infrastructure.

But Ramatex has complained that local workers are not as productive as their Asian counterparts, and are "untrainable" - a criticism rejected by workers' leaders.

The Namibian government responded to the ultimatum by putting forward an alternative plan, but this was rejected by Ramatex.