2 000 companies, 16 000 workers

Social Security Commission drowning under wage assistance applications

14 July 2020 | Economics



About 2 000 employers and 16 000 workers have so far applied to the Social Security Commission (SSC) for assistance, as Covid-19 salary cuts continue to wreak havoc with business and household finances.

A total of 5 483 employees who have had their salaries cut as a consequence of the coronavirus pandemic have so far benefited from the SSC wage subsidy package, which sees the commission supplement lost income, finance ministry spokesperson Tonateni Shidhudhu confirmed.

This is in addition to another 120 000 people will still benefit from the emergency income grant of N$750 each, Treasury told Namibian Sun yesterday.

Of the 2 000 applications received from employers, 860 have been authenticated so far and payments will be made once they pass eligibility criteria.

As part of measures to support employees affected by the pandemic, the ministry of finance and the SSC are rolling out a N$400 million stimulus package.

This is to protect the incomes of employees who have not been able to get their full salaries as a consequence of the pandemic.

Sectors under the scheme include tourism, construction and aviation.

“About 2 000 (employer) applications have been received, however only 860 applications stand authenticated thus far and are to be paid if they have passed the eligibility criteria. 5 483 employees out of a total of 16 000 have so far benefited,” Shidhudhu said.

Shidhudhu pointed out that about 4 000 employees were rejected based on factors, including them earning more than N$50 000 per year, earning a salary that had not been cut or having been registered with the SSC for less than six months.

Outstanding invoices settled

According to Shidhudhu, the finance ministry has also settled in full invoices services and goods the government had procured before the start of the lockdown period in March.

Government accelerated the payment of overdue unpaid invoices, totalling N$1.2 billion as at 31 March 2020, he said.

“We are retooling our processes to keep this momentum and eliminate spending arrears going forward,” Shidhudhu said.

N$562m emergency income grant

Over a 120 000 people will still benefit from the emergency income grant of N$750 each, Shidhudhu said.

“A total of 747 281 Namibians have so far benefited from the grant at a cost of N$561.9 million. A further 120 000 people are expected to benefit after completion of the verification process,” he added.

90 000 job losses

Coronavirus threatened the jobs of one out of four Namibians, experts said in April.

A report compiled by the Bankers’ Association of Namibia (BAN) and the Economic Association of Namibia (EAN) and submitted to government at the time said due to the initial three-week lockdown, the Namibian economy would contract by 6.7% this year. About 90 000 people may lose their jobs, it said.

During the current lockdown, Namibia was losing about N$1.5 billion a week in exports.

Construction on its knees

The construction industry, which suffered negative growth for 14 consecutive quarters even before coronavirus struck, has suffered an immense blow and its contribution to the country’s economy has dropped from 7.2% in 2015 to a mere 2.9% by the end of 2019.

This was said last month by the Construction Industry Federation's (CIF) Barbel Kirchner during the daily Covid-19 briefing.

According to her, this dramatic reduction has seen large-scale retrenchments with about half of the 60 000 workers employed in the formal and informal construction industry sent home.

“Before lockdown we interviewed our members and the feedback was that 68% of those companies, at the end of the last financial year, had made a loss and operated at a loss. Financing is only through debt and it makes these companies extremely vulnerable,” she said.