In a desperate bid to stave off an economic catastrophe, government has in recent months decided to tighten its belt by adopting several prudent spending measures, as it seeks to improve the cash flow of the country. The precarious prevailing economic climate has hit small businesses hard, especially those who depend on state contracts to stay afloat. Namibia Chamber of Commerce and Industry(NCCI) this week expressed concern over the state of the country’s once promising economy, which is currently teetering in the red zone. NCCI president Sven Thieme during an exclusive interview with this publication this week said the current economic status has a significant impact on everyone, adding that general sentiments are that investment in the economy has slowed down as well as business overall. He underscored the importance of cooperation between the private and public sector to find sustainable solutions.
“Policies need to include a commercial view and consultation on all these topics need to be done from the beginning. We have so much potential, we just need to bring thinking to everything,” said the NCCI president. NCCI is the leading business representative and support organisation in Namibia with over 2 500 members. With many private companies depending on state contracts for business and many struggling to cushion themselves to avoid falling prey to bankruptcy, Thieme urged business owners to begin diversifying their businesses. “That [dependence on state contracts] is a big concern and also a concern of sustainability. These businesses will never survive in the long term. Companies that do well in good times need to diversify, invest and have long-term strategy. Many fly-by-night companies have short-term thinking and are ensuring that personal pockets are filled at the expense of long-term thinking. These companies also do not have the time to establish an innovation culture,” he said. NCCI, together with the Government, are working towards making Namibia the most competitive country in Africa by 2020, he said, adding, “With regards to the current tough economic times, we need to find ways to overcome these and especially staying positive to create ways of seizing opportunities as opposed to discussing forever what is wrong.”
He also lamented the state of productivity in the country, saying: “We can never be happy with the current state of productivity within Namibia. We are competing against economies across the world and for that we are not as yet competitive enough.
We need investment in vocational training, attract expertise and facilitate knowledge and expertise transfer.” Of late, there has been mushrooming of state companies, who are in direct competition with their counterparts in the private sector. Asked about NCCI’s stance on this development, Thieme said: “No, I don’t think it will be an issue as long as the procurement process is transparent and fair and that all applicants are treated on the same basis.”
Thieme also explained how NCCI is addressing the economic situation in the country, especially when considering the mounting pressure to implement a plan to counter negative growth in the private sector. “By being a facilitator and advocate of developing a competitive economy that stimulates long-term growth. We need to have the right policies in place that promotes investment and thereby countering negative growth. The enabling environment needs to include excellent systems for the education, health and safety.”
The floundering currency, coupled with the high level of inflation is also making life more expensive for many Namibians. Thieme said the private business sector is an exception.“We need to have the right balance in place between import and export thereby ensuring we become more immune to currency fluctuations. In the short term, we need to hedge our various expense positions through income positions and vice versa. This will allow inflation to be under control and guarantee jobs,” he said. With the country’s economic outlook, which was recently changed from stable to negative, he said: “This is obviously not good and yes it has a negative impact on the private sector with regards to the sentiments on the investment climate. We all need to join hands to fight this issue, [as it is] very hard to get out of that position. We need to become very disciplined and resolve to do something about. Me, personally, I am very positive in that we will sort this out.” He further proposed that: “We need to address the effectiveness and efficiencies of public and private procurement processes. These need to be independent and equipped with the right expertise to prevent squandering of private and public funds. This is one way of eradicating poverty.”