By Staff Reporter
Ipumbu Shiimi, Namibian Finance Minister this afternoon announced an unprecedented relief package totaling N$ 8, 1 billion. This is composed of a contribution to support businesses, households and cash flow accelerated payments for services delivered and N$ 2,3 billion for Government liabilities. Expressing his concern, Ipumbu noted that the “ longer the outbreak and the health containment and suppression of the spread, the deeper and longer the economic contraction and social hardships”.
To be of assistance to both the formal and informal businesses, the following measures are proposed:
(a). Wage subsidy for tourism, travel, aviation and construction sectors to avoid further retrenchments in the hardest-hit sectors.
(b) Accelerated repayment of overdue and undisputed VAT refunds. Government will immediately speed up such repayments to enhance the cashflow of enterprises paying VAT. The total amount, N$ 3 billion is expected to be settled within one week of the implementation.
(c) Accelerated payment of overdue and undisputed invoices for goods and services provided to Government will immediately speed up such payments to boost the cash flow of enterprises that are suppliers to the Government. This amount stands at about N$800 million.
(d) Non-agricultural Small business loan scheme. Government will facilitate a N$500 million loan scheme for non-agricultural small businesses and guaranteeing such loans to be provided by the Development Bank of Namibia. The loans will be extended to cash flow constrained small businesses that have experienced a significant loss of revenue.
(e) Agricultural business loan scheme. Government will further facilitate a N$200 million loan scheme for framers and agricultural businesses and guaranteeing such loans to be provided by the Agricultural Bank of Namibia. The loans will be extended to cashflow-constrained farmers and small to medium-sized businesses that have experienced a significant loss of revenue.
(f) Granting of the policy relief to borrowers by DBN and AgriBank in the form of a capital repayment moratorium where a holiday is allowed on the principal amount for a period ranging between six (6) months, but not exceeding two years (24 months) will be based on the assessment, recapitalization of interest, lengthening of the repayment periods and waiving of penalty provisions.
(g) ) Tax-back loan scheme for non-mining corporates which will provide breathing room for cashflow-constrained businesses in the non-mining sectors who are taxpayers. Such businesses can borrow an amount equal to 1/12th of their tax payment in the previous tax year, to be repaid after one year. The interest rate will be favourably low at the prime lending rate less 1%, on the back of the Government guarantee, capped at N$470.00 million. Applications will be made via the banks.
(h) Relaxation of labour regulations to protect jobs. To avoid major retrenchments and business closures, employers including Government and business owners will be allowed to negotiate a temporary 20% reduction of salaries and wages during the crisis period, and 40% for the worst-hit industries. The negotiations will be undertaken through a consultative process with employees and labour unions.
Shiimi announced that these provisions take effect immediately and their implementation will be accelerated in coming days and weeks.