Local not just lekker, but critical

Jo-Maré Duddy



As Namibia enters the second phase of the state of emergency it is critical that the local private sector is not only supported to maintain jobs, but especially to also create new jobs.

“It is now critical that we look at ways to create jobs,” says the account director of Team Namibia, Bärbel Kirchner.

Namibia needs to look beyond and start preparing for the aftermath of lockdown and Covid-19. This can be achieved through a multi-pronged approach, Kirchner says.

Team Namibia lobbies for the support of local businesses to gain greater local, regional and international market share. According to Kirchner, the current crisis highlights the importance of reducing one's dependencies on international supply and value chains.

“We now need the full-out support for our local businesses so that they can deliver more competitively and replace imported goods and services most efficiently. We need to strengthen our own capacities. Now is the best opportunity to achieve that, provided the right decisions are taken,” she says.

Namibians, including institutional buyers and especially government, need to procure from local businesses.



Procurement

“Procurement legislation needs to be further supported with additional regulations and incentives in order to give local businesses a chance to compete against international powerhouses. This can either be done by considering preferences or set-asides for local businesses,” Kirchner says.

The weak Namibia dollar and exchange rate volatility must be taken into consideration, especially in the construction sector, manufacturing and the information technology industry. This “makes effective and competitive bidding very difficult if not impossible, as the responsibility of covering the impact of exchange rate fluctuations lie with the bidding company”, Kirchner says.

In addition of government's support to improve businesses' cash flow situation, Team Namibia also urges a reduction in company and personal income tax.

The umbrella group also calls for “concerted efforts such as securing the right incentives for businesses”.

“Efforts to repeal the manufacturing incentives through amendment of the income tax legislation must be put on hold immediately until Namibia can report strong economic recovery.

“Simultaneously, the continuous supply, availability and costs of utilities needs to be reviewed. This will help that related businesses are not further restricted in an already extremely threatening environment,” Kirchner says.



Investor friendly

Most importantly, government needs to focus on creating environment that attracts investment, she stresses.

“With the global spread of Covid-19, the competition to attract foreign investment has grown out of proportion with many economies wanting to attract the support from global investors.

“To ensure that Namibia ensures its survival, it is therefore very important that the Namibian Investment Promotion Act [Nipa] in its current format will be repealed and that the NEEEF [New Equitable Economic Empowerment Framework Bill] is put on hold until there are sure signs of prolonged economic recovery,” Kirchner says.

“Unless drastic measures are taken immediately to secure the right regulatory and policy environment, the chances of growth and an upswing of the economy are very remote,” she concludes.