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Thursday 17 January 2019
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‘SME only Namibia’s economic backbone in theory’

Namibia’s small enterprises do not get the recognition and support to justify government’s claims that they are the backbone of the economy, local entrepreneur Twapewa Kadhikwa has argued. Small and Medium Enterprises (MSME) contribute approximately 12percent to the Namibian Gross Do¬mestic Product (GDP) annually.  By August last year, official figures indicated that an estimated 33 700 MSMEs provide some form of employment and income to 160 000 people, accounting for approximately one third of the nation’s workforce. Speaking at a panel discussion on the closure of the SME Bank and its impact on small and medium enterprises (SMEs) in Namibia on Tuesday, Kadhikwa said SMEs are a critical component of the economy but they cannot yield their full potential because of limited support. “The politicians keep saying that SMEs are the backbone of the economy but this is not the case. Some of our policy makers go abroad and here these phrases and decide to come and make similar pronouncements as soon as they return.  Look at the closure of SME Bank that was supposed to help small businesses, I was so disappointed when the bank was closed down.

 
Now small businesses have to figure out a way to survive between commercial banks and debt institutions,” she said at the public talk organised by the Konrad-Adenauer-Stiftung Foundation. She added: “If we gave money to save companies such as TransNamib, why could the same not be done for SME Bank? We have now become experts of abortion.” Like thousands of Namibians, she is of the view that the management of the bank should be dealt with accordingly. “It seems we have placed our destiny in the hands of people who do not care about us,” she charged. Kadhikwa, who owns the popular Xwama Traditional Restaurant in Windhoek, also spoke of the importance of building generational business empires in the country. Speaking at the same occasion, Director at the Office of the Ombudsman Eileen Rakow said loans awarded by the SME Bank could be recalled, but cautioned that taxpayers’ money invested in the financial institution at the time of closure will not be recovered. Rakow said the liquidation process could take anything between one and two years.

 
She said the directors and management members who will be found guilty will face the law, even if they are out of the country. All Zimbabwean expatriates who worked at SME Bank have since gone back to their native land. “We[Namibia] have an agreement with Zimbabwe on extradition so they can be traced and brought before the law,” she said. Like many, Rakow is also puzzled as to how the Bank of Namibia failed to pick up the large transactions from SME Bank to South African financial institutions. “A lot of this money was invested by parastatals and therefore this theft will have a great impact on the men on the street. But all this will only be felt once the public does not have access to services,” she said. “That money is gone and will have to be made up from somewhere else, and that is the biggest impact on the citizens and the man on the street, because they will have to recover that money,” Rakow said. She added that the legal procedures would take a lengthy period to complete and would require a lot of patience from Namibians.

 
The SME Bank was placed in provisional liquidation on 11 July 2017 as a result of unsound investments and missing N$200 million. The liquidation order stands to be made final on 15 September 2017. Some 208 staff at the bank lost their jobs following the bank’s provisional liquidation.  The Namibian government has over the past four years pumped about N$477 million into the SME Bank since its establishment in 2013.




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