The Harambee Prosperity Plan (HPP) has failed to better the country’s global rating for ease of business as set out in their targets and proposed strategies.
The ease of business is one of many other targets set out to contribute to the positive growth of the country’s economy and development.
The HPP was launched in April 2016 and will be reaching its third year this April. While targets and strategies to meet these targets were divided across yearly periods, some have only been met as late as two years after their expected date, or not at all.
The ease of doing business was aimed at addressing the fact that Namibia is lowly ranked in the world.
The World Bank’s ‘Doing Business 2018’ report showed that Namibia was ranked 106th in that year, this was two places up from the 108 position it had in 2017, while the country in 2012 occupied the 78th position in the rankings.
The ‘Doing Business’ report includes 190 countries and is an analysis based on the assessment of various areas such as the construction industry when it comes to construction permits, establishing businesses and also registering property.
Economist at Standard Bank Namibia, Naufiku Hamunime told The Patriot on Wednesday that while Namibia was overall ranked 107 out of 190 countries for ease of doing business, the country was ranked 172 out of 190 countries for starting a business and 174th out of 190 countries when it comes to registering properties.
These ratings are evidence that the targets on property registration stated in the HPP targets, have not been achieved.
Hamunime said that while the country may have established the best reforms to address previous issues when it came to these areas, the reforms mean nothing if they have not been implemented and hence the country’s ratings could not increase to a better position.
She added that until Namibia sees the successful implementation of all reforms in this regard, the country will risk remaining lowly ranked, and this would negatively impact the economy.
World Bank Group President Jim Yong Kim in 2018 said that the private sector is key to creating sustainable economic growth and ending poverty around the world, hence it is imperative for a country to be investor-friendly especially when it comes to ease of doing business.
Meanwhile, Namibia last year maintained its ranking of seventh position in the 16-member SADC competitiveness ranking. This is despite one of the HPP targets being that Namibia is aiming to be the one-stop shop for investment.
One-stop shop for investment
Tax partner at PwC Johan Nel told The Patriot on Wednesday that the HPP and the national budget seem to be contradicting each other and this may be the reasons why a majority of targets in the plan have not been met.
Nel said that the country’s bureaucratic and complicated system with regards to inviting investments, plays a major role in people wanting to do business in the country and causes investors to become discouraged when considering investing in Namibia.
He agreed with Hamunime that Namibia is not doing well when it comes to the ease of doing business.
“Apart from the targets set out in the Harambee Prosperity Plan, we are not progressing as well as we should have been by now,” Nel said.
He added that with the introduction of developments such as ITAS ( Integrated Tax Administration System ) which is expected to reduce the hours individuals and companies spend on the tax assessment processes, he is positive that it will contribute to attracting more investors to do business in the country.
He however also said that other factors such as dual-approval systems when it comes to applying for business activities such as public private partnerships – to name one – also deter, especially foreign investors.
He also said that some of the requirements to establish a certain business is not very investor friendly, as expectations are sometimes too high.
One of the HPP targets is the provision of 8 000 manufacturing jobs. The creation of these jobs would be promoted and aided by the investment incentives to attract investments within the manufacturing industry.
It is unclear how many manufacturing jobs were created during the HPP period.
While noting the investment agreement of a Peugeot assembly plant at Walvis Bay, Minister of Finance Calle Schlettwein on Wednesday evening said that the investment into the manufacturing industry was a wrong investment as it did not reach much of the results they were hoping for.
Nel however said that he disagrees with Schlettwein. He opines that investments into the manufacturing industry cannot be seen as a wrong investment since the failure in not attracting investors into the manufacturing industry has more to do with the processes to follow when wanting to start this type of business.
Government claims success of HPP
Former economic advisor in the Office of the President John Steytler, last year said that the HPP can be considered a success.
Highlighting the three pillars, Steytler told the media last year that government was doing well on the governance pillar, as members of parliament were declaring their assets. Addressing the economic advancement pillar, Steytler was reported as saying that he does not think government has failed, but that there were extremely difficult conditions that led to roadblocks in meeting the economic targets.
He admitted that government had already been behind schedule on the poverty eradication target at that time, but that developments such as the food bank establishments could be considered a step in the right direction.
When addressing the land servicing and house provision target, the former economic advisor said that government had done well and even went as far as saying government had exceeded their target. This is despite several local government officials and leaders still saying the housing backlog continues to be a grave concern.
A 2017 review of the HPP stated that Namibia minimally overshot its debt to GDP target by 7 percentage points, compared to the programmed ratio of 35 percent, for Year Two of HPP.
The slight increase in the debt ratio, although not welcomed by rating agencies, was required to settle outstanding invoices and to provide additional support to a slowing economy.
They maintained that the progress of the plan remains on track throughout all the pillars.
When approached for a response this week in regard to the current performance of the Prosperity Plan, Presidential Advisor Dr Hengari remained mum on our request for input, despite numerous promises for a response.
High Level Panel on the Economy
The President last week appointed a high level panel on the economy as part of the HPP targets.
The panel consists of Johannes Gawaxab as chairperson, Nangula Uaandja as vice-chairperson, Julius Mungunda, Kauna Ndilula, James Mnyupe, Kenneth Matengu, Florette Nakusera, Evangelina Nailenge, Martin Shipanga, Ester Simon Nanso, Klause Schade, Banda Shilimela, Sven Thieme, Estelle Shipuka, Gitta Paetzholde, Justine Braby, Immanuel Kadhila, Jason Kasuto and three international experts namely Carlos Lopez, Vuyo Jack and Joseph O. Okpaku
Sven Thieme told The Patriot yesterday that they have not yet received their agreements that would outline what their duties are, but that he is looking forward to being a spokeperson for the business world on the panel and providing true business aspects.
Gawaxab did not comment as he abruptly ended the phone-call when addressed with the media query.