NEF's stern warning about productivity
"I am greatly humbled by the honour bestowed on me as President of the Namibian Employers’ Federation, to offi ciate as the main speaker for the offi cial opening of this year’s Windhoek Industrial and Agricultural Show. "I must, however, confess to a certain measure of trepidation when I considered the enormity of the task entrusted to me in the light of the specifi c terms of reference that the WSS gave me, namely, 'In your capacity as the President of the NEF, we believe that you may like to use this opportunity to touch on some salient issues, relevant to the present economic and social situation and the challenges we all, as Namibians, need to embrace to achieve our 2030 Vision.'
"I guess this constitutes enough long rope to hang myself with and I shall proceed without any further delay to do just that! "Firstly, I want to address a world-wide phenomenon which adversely affects the private sector in many countries, namely that 'over regulation kills the economy and consequently job creation.' The World Bank’s 2008 'Doing Business Report' that was launched on the 26th September 2007 in New York, found that inefficient business regulation creates real barriers to growth and job creation and thus hurts economic development.
"It further found that, paradoxically, 'the worst business regulations can be found in many of the countries with the lower levels of development and the worst conditions for their people.' " "Now, this is just a nice and polite way of referring to countries such as on our continent.
Examples are given of how easy or hard it is to do business by showing: for example, that it takes 300 days to register a business in one country, while it takes a mere 15 minutes in another. "It should be noted that what we as the NEF are pleading for is not deregulation per se; the case we are making to Government is that a clear distinction be made between inefficient and efficient regulation as vividly demonstrated in the above example of how long it takes to register a business in two separate jurisdictions.
It is this fl exibility and speed to market that will increase Namibia’s attractiveness as an investment destination. "The second issue I wish to address is how two of the key sectors of our national economy that are well represented at this show, are likely to be very negatively affected by some provisions in the recently passed Labour Act – unless these provisions are reconsidered on the basis of economic realities and not short-term political expediencies.
"The two sectors I am referring to are agriculture and tourism – the one acknowledged as the backbone of the economy, the other acknowledged as the fastest growing sector for the future.
"Yet, both are being jeopardised by Section 28 of the new Labour Act which provides that: an employer who terminates the employment of an employee who is living in accommodation provided by the employer, and the dismissal is for reasons of a disciplinary nature, then the employee who has been dismissed shall have the right to remain on the premises of the employer for up to three months from the date of dismissal or much longer if the employee has declared a dispute with the Labour Commissioner!
"Now, those of us who are farmers have practical experience that where an employee has been dismissed on disciplinary reasons, e.g. theft or drunkenness or repeated fi ghts with fellow employees, the inter-personal relationship between the employer and the dismissed employee breaks down completely.
Similarly, the inter-personal conflict will extend to his co-workers if the cause of the dismissal involved some of them. "How on earth is any farmer or lodge manager supposed to put up with such an untenable situation for 3 months and even a whole year or longer while the Office of the Labour Commissioner is trying to process the dispute?
Is this type of imposition the very best solution that Cabinet and Parliament could come up with to address a labour issue of worst case scenario 'unfair dismissal'? "What happens in the meantime? The employer – be it a farmer or guest farm/lodge manager – would not be in a position to recruit a new employee for reasons that the required accommodation is still occupied by the dismissed employee!
"Therefore, by necessary implication, Section 28 in its current form would oblige farmers, lodge owners and guest farm owners to make further investments in infrastruc ture to cater for extended accommodation of staff after lawful termination of their employment. "In other words, property owners would have to build additional accom modation to be able to comply with the law by catering for both employ ed as well as dismissed employees who by law must continue to be accommodated by the employer. "Clearly, this will add considerably to the initial investment and the continued maintenance costs which can only lead to price hikes in the tourism industry – making it even further less competitive in the region.
"Ladies and gentlemen, the potential negative implications of the aforesaid measure must be seen against the importance of these two sectors to the economy of Namibia. "Tourism alone contributes 16% to the country’s GDP and accounts for some 18% of total employment. Agriculture on the other hand contributes 7% to the GDP and employs some 30% of the total labour force, while indirectly more than 70% of the population depends on agriculture for their livelihood.
Agriculture continues to be the unseen foundation of our economy which actually deserves more focussed attention. "The legislative measure under discussion has shaken the confi - dence of employers and wealth creators in the two sectors who are collectively responsible for 23% of the Nation’s GDP and 48% of direct total employment.
"In these days of 37% unemployment, Government and Parliament seem to be saying they are ready to risk all of that for the sake of a populist labour measure. Perversely, though, the direct endresult of this very measure in a few years from now is that the rate of unemployment may very well have exceeded 40%! "Why? Because, Government and Parliament would have failed to effect a proper balance between job security for workers and labour market fl exibility.
"Instead, they fell into the trap of very rigid labour laws and put the country on a path of slow economic growth. Last year Government projected a GDP growth rate of 4%; the reality is that we only achieved a growth of 2.9%. "The third and fi nal issue that I wish to address is the continued slipping of Namibia in competitiveness rankings – both international ly and regionally.
"According to the latest WEF Report on Competitiveness, Namibia has slipped for the 3rd consecutive year. That means according to the perception of business people – both locally and overseas, there are things we as a nation are no longer doing correctly to position Namibia as a well regulated national environment conducive to investment and doing business.
We can only ignore such judgement at our own peril! "Some of the things that Government promises to address every year but fails to address every year is the unacceptable delays in the processing of work and residence permits for foreign investors who wish to follow their investments given the continued lack of certain critical skills in the Namibian market. "It still takes anywhere from two to six months for a business executive or a Polytechnic professor to be cleared to come and teach our students.
"A related issue is the low productivity of our economy compared to others in the region as a result of, amongst others, the infl exibility of employment regulations and the recent increase in leave days which makes us totally uncompetitive with the rest of SADC.
Whilst our President exhorts the nation to work harder, his Ministry of Labour introduces legislation which compels the Nation to work less and rest more! "Ladies and Gentlemen, these are the harsh realities that we as a nation need to wake up to if we are serious about the National Vision of 2030.
That Vision calls for concrete action now, not tomorrow, with measurable results, not empty political rhetoric! "That Vision calls for concerted efforts between Go vernment, the private sector, orga nised labour and the community at large in the implementation of sectoral programmes and projects with a feedback- loop to track, evaluate and measure performance by a joint Public-Private agency.
Anything short of this is self delusion as Vision 2030 will become Vision Impossible! "Fellow Namibians, we are sons and daughters of the Land of the Brave, everything is not lost, yet; we still have 23 years to go before the year 2030. "Let’s resolve to correct the mistakes of the past and the present by thinking both short-term and long-term and not only short-term! Let’s think and behave like statesmen and women and as business leaders and not as unliberated political and economic refugees in our own country!
"Let’s think and behave like free people in a free country and positively engage our Government in a workable Public-Private Partnership in the interest of establishing and maintaining an environment conducive to enterprise creation, economic development and poverty reduction."
"I guess this constitutes enough long rope to hang myself with and I shall proceed without any further delay to do just that! "Firstly, I want to address a world-wide phenomenon which adversely affects the private sector in many countries, namely that 'over regulation kills the economy and consequently job creation.' The World Bank’s 2008 'Doing Business Report' that was launched on the 26th September 2007 in New York, found that inefficient business regulation creates real barriers to growth and job creation and thus hurts economic development.
"It further found that, paradoxically, 'the worst business regulations can be found in many of the countries with the lower levels of development and the worst conditions for their people.' " "Now, this is just a nice and polite way of referring to countries such as on our continent.
Examples are given of how easy or hard it is to do business by showing: for example, that it takes 300 days to register a business in one country, while it takes a mere 15 minutes in another. "It should be noted that what we as the NEF are pleading for is not deregulation per se; the case we are making to Government is that a clear distinction be made between inefficient and efficient regulation as vividly demonstrated in the above example of how long it takes to register a business in two separate jurisdictions.
It is this fl exibility and speed to market that will increase Namibia’s attractiveness as an investment destination. "The second issue I wish to address is how two of the key sectors of our national economy that are well represented at this show, are likely to be very negatively affected by some provisions in the recently passed Labour Act – unless these provisions are reconsidered on the basis of economic realities and not short-term political expediencies.
"The two sectors I am referring to are agriculture and tourism – the one acknowledged as the backbone of the economy, the other acknowledged as the fastest growing sector for the future.
"Yet, both are being jeopardised by Section 28 of the new Labour Act which provides that: an employer who terminates the employment of an employee who is living in accommodation provided by the employer, and the dismissal is for reasons of a disciplinary nature, then the employee who has been dismissed shall have the right to remain on the premises of the employer for up to three months from the date of dismissal or much longer if the employee has declared a dispute with the Labour Commissioner!
"Now, those of us who are farmers have practical experience that where an employee has been dismissed on disciplinary reasons, e.g. theft or drunkenness or repeated fi ghts with fellow employees, the inter-personal relationship between the employer and the dismissed employee breaks down completely.
Similarly, the inter-personal conflict will extend to his co-workers if the cause of the dismissal involved some of them. "How on earth is any farmer or lodge manager supposed to put up with such an untenable situation for 3 months and even a whole year or longer while the Office of the Labour Commissioner is trying to process the dispute?
Is this type of imposition the very best solution that Cabinet and Parliament could come up with to address a labour issue of worst case scenario 'unfair dismissal'? "What happens in the meantime? The employer – be it a farmer or guest farm/lodge manager – would not be in a position to recruit a new employee for reasons that the required accommodation is still occupied by the dismissed employee!
"Therefore, by necessary implication, Section 28 in its current form would oblige farmers, lodge owners and guest farm owners to make further investments in infrastruc ture to cater for extended accommodation of staff after lawful termination of their employment. "In other words, property owners would have to build additional accom modation to be able to comply with the law by catering for both employ ed as well as dismissed employees who by law must continue to be accommodated by the employer. "Clearly, this will add considerably to the initial investment and the continued maintenance costs which can only lead to price hikes in the tourism industry – making it even further less competitive in the region.
"Ladies and gentlemen, the potential negative implications of the aforesaid measure must be seen against the importance of these two sectors to the economy of Namibia. "Tourism alone contributes 16% to the country’s GDP and accounts for some 18% of total employment. Agriculture on the other hand contributes 7% to the GDP and employs some 30% of the total labour force, while indirectly more than 70% of the population depends on agriculture for their livelihood.
Agriculture continues to be the unseen foundation of our economy which actually deserves more focussed attention. "The legislative measure under discussion has shaken the confi - dence of employers and wealth creators in the two sectors who are collectively responsible for 23% of the Nation’s GDP and 48% of direct total employment.
"In these days of 37% unemployment, Government and Parliament seem to be saying they are ready to risk all of that for the sake of a populist labour measure. Perversely, though, the direct endresult of this very measure in a few years from now is that the rate of unemployment may very well have exceeded 40%! "Why? Because, Government and Parliament would have failed to effect a proper balance between job security for workers and labour market fl exibility.
"Instead, they fell into the trap of very rigid labour laws and put the country on a path of slow economic growth. Last year Government projected a GDP growth rate of 4%; the reality is that we only achieved a growth of 2.9%. "The third and fi nal issue that I wish to address is the continued slipping of Namibia in competitiveness rankings – both international ly and regionally.
"According to the latest WEF Report on Competitiveness, Namibia has slipped for the 3rd consecutive year. That means according to the perception of business people – both locally and overseas, there are things we as a nation are no longer doing correctly to position Namibia as a well regulated national environment conducive to investment and doing business.
We can only ignore such judgement at our own peril! "Some of the things that Government promises to address every year but fails to address every year is the unacceptable delays in the processing of work and residence permits for foreign investors who wish to follow their investments given the continued lack of certain critical skills in the Namibian market. "It still takes anywhere from two to six months for a business executive or a Polytechnic professor to be cleared to come and teach our students.
"A related issue is the low productivity of our economy compared to others in the region as a result of, amongst others, the infl exibility of employment regulations and the recent increase in leave days which makes us totally uncompetitive with the rest of SADC.
Whilst our President exhorts the nation to work harder, his Ministry of Labour introduces legislation which compels the Nation to work less and rest more! "Ladies and Gentlemen, these are the harsh realities that we as a nation need to wake up to if we are serious about the National Vision of 2030.
That Vision calls for concrete action now, not tomorrow, with measurable results, not empty political rhetoric! "That Vision calls for concerted efforts between Go vernment, the private sector, orga nised labour and the community at large in the implementation of sectoral programmes and projects with a feedback- loop to track, evaluate and measure performance by a joint Public-Private agency.
Anything short of this is self delusion as Vision 2030 will become Vision Impossible! "Fellow Namibians, we are sons and daughters of the Land of the Brave, everything is not lost, yet; we still have 23 years to go before the year 2030. "Let’s resolve to correct the mistakes of the past and the present by thinking both short-term and long-term and not only short-term! Let’s think and behave like statesmen and women and as business leaders and not as unliberated political and economic refugees in our own country!
"Let’s think and behave like free people in a free country and positively engage our Government in a workable Public-Private Partnership in the interest of establishing and maintaining an environment conducive to enterprise creation, economic development and poverty reduction."
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