Victor Marie Hugo, one of the France’s greatest poets and very influential writer of the 1800’s once said “there’s nothing more powerful than An Idea Whose Time Has Come”. 26 years after independence economic transformation through National Equitable Economic Empowerment Framework (NEEEF) is an idea whose time has come.
Africa is projected to have a population of 2.5 billion by 2050, which will represent approximately 25% of the world’s population. Subsequently Sub-Saharan Africa will have a larger and younger workforce than China or India. Coupled with continent’s abundant land and natural resources, that workforce which was recently quoted by the Wall Street Journal as ‘the biggest human increase in modern history’ will have a global competitive advantage and be a great economic asset.
For Namibia this can be a perpetual friction on the growth potential if the current structural problems of poverty and inequality are not addressed.
The pathway of economic transformation necessitates an energized, coherent and effective approach by all Namibians, working together in partnership in order to minimize the impact of poverty and unemployment.
If implemented correctly the NEEEF has the potential to become one of the central issues to combat unemployment and inequality. The key to achieving the vision is implementation of programmes. Implementation has a decisive influence on economic performance, while we can adopt good policies, the spirit of excellence in the rollout of our programmes must remain the ultimate objective.
There’s a general consensus that the crisis in economic outcomes is in fact partially a crisis of implementation and fragmentation, however we should anticipate to act by strengthening the link between NEEEF and the actual actions on the ground, accompanied by a monitoring and evaluation system that can give early warning systems on weak implementation.
Unctad (2014) is of the view structural transformation is crucial for economic prosperity and human development in developing countries, especially for economies that are struggling to overcome the challenges of poverty, unemployment and inequality.
The NEEEF intends to interalia:
Set out the national direction for the implementation of the Economic Empowerment Framework in Namibia in accordance with the pillars of empowerment;
Develop a plan for facilitating the financing economic transformation and empowerment, including the creation of incentive schemes to support effective private sector enterprises owned and managed by previously disadvantaged persons;
Provide a system for government bodies and private sector enterprises to prepare transformation charters and to report on compliance with those charters and economic empowerment standards.
This is the essence of economic transformation, now the leading paradigm for Africa’s post-2015 agenda. Since the dawn of independence Namibia have seen steady economic growth but have struggled to leverage that growth into addressing inequality and unemployment.
The bottom line is that the structure of the economy has not changed much over the past years. As a result, Namibia continues to lag behind the rest of the world in inequality indicators, unemployment and poverty rates, despite the positive growth rates and surging investor confidence.
That’s where transformation comes in, and the need for NEEEF to address the structural weaknesses to improve the lives of the many through smart, sustainable and balanced growth.
So the negativity around NEEEF sabotaging growth should be debated as it has the potential to distort the truth. Inward looking policies should be pursued in the interest of the Namibian economy and its people.
There is sufficient evidence to suggest that growth on its own is pointless and should be accompanied with domestic economic policies.
There’s admission that in instances that the state is weak, the entire development agenda is inadvertently skewed. Increasing the capacity of the state should be led in a targeted way in order to meet the priorities.
NEEEF should guard against mandates that are too broad, as they tend to be ineffective with little accountability.
Economic transformation should be implemented without further delay.
Salomo Hei is the Managing Director: Makalani Fund Manager Namibia- Registered Unlisted Investment Manager. He holds a Bcom Honours from the University of Johannesburg.