Ngurare sounds alarm over SME liquidations under outdated law

Prime Minister Elijah Ngurare has warned that Namibian small and medium enterprises (SMEs) are being pushed into liquidation under an insolvency law that dates back nearly a century, saying urgent action is needed to prevent the crisis from undermining efforts to tackle poverty, unemployment and inequality.

Closing the three-day State of Justice Summit in Windhoek last week, Ngurare said: “It is now 2026, small and medium enterprises are facing liquidations in our courts on a daily basis and on the basis of a law, which does not correlate to the realities on the ground”.

He pointed to a Law Reform and Development Commission (LRDC) discussion paper on issues relating to the Insolvency Act of 1936, completed in February 2015, saying the document had been available for more than 11 years without the necessary reforms being implemented.

The prime minister said the situation is particularly difficult for first-time business owners, who often lack the experience and guidance that parents or elders who had previously owned businesses could have provided.

“The challenges the owners of these entities face, often as first-time business owners," he said, "are crippling indeed."

Ngurare linked the plight of SMEs directly to the country’s broader development challenges, warning that the difficulties facing businesses undermine efforts to reduce poverty, unemployment and inequality.

“The debilitating factors facing SMEs are defeating our collective endeavour to overcome poverty, unemployment and inequality. We must do something about it urgently,” he said.

He said the pace at which SMEs are liquidated could not continue and called for all stakeholders to take responsibility.

"Everyone must play their part to avoid this, including the SMEs themselves, banks, the legislature, the executive and the judiciary,” Ngurare said.

Cost of justice ‘worrisome’

The prime minister also raised concerns about the cost of accessing justice, describing litigation in Namibia as “worrisome” and saying legal services were becoming unaffordable for many citizens.

“I am not sure what exactly legal practitioners are charging their clients for,” Ngurare said, while acknowledging that he did not want to infringe on lawyers’ rights to determine what they charge.

“All I am saying is: access to justice is exorbitantly expensive.”

He called for continued discussions around pro bono work, arguing that the justice system should serve Namibians regardless of their ability to pay for private legal representation.

Ngurare praised lawyers who take on legal-aid cases and work diligently for their clients, but said mechanisms should be introduced to address practitioners who accept legal-aid instructions but fail to protect their clients' rights and interests adequately.

Calls for action on ‘unexplained wealth’

Ngurare also called on institutions responsible for investigating unexplained wealth to intensify their efforts.

“Our laws provide for unexplained wealth to be investigated, and I urge those institutions that have been mandated to zoom in on all of us to explain our wealth, and if we are unable, let the law take its course,” he said.

He specifically called on the Financial Intelligence Centre, the prosecutor general, the Anti-Corruption Commission, the Namibia Revenue Agency and the Namibian Police to work together to combat corruption by using what he described as a new section in the Prevention of Organised Crime Act.

"Let’s work together to curb corruption by using that new section in the Prevention of Organised Crime Act,” Ngurare said.

He said corruption damages public trust and national development and should therefore remain a central concern of justice-sector reform.