Buy local to support the economy
15 May 2019 | Business
In order to curb this side effect, member-based organisation, Team Namibia, with its mandate of raising awareness for buying locally produced goods and services, now more than ever, would like to encourage all Namibians to support local businesses.
This collaborative switch in consumption patterns can notably improve the trade balance and ensure that money spent, remains circulating in the local economy. Furthermore, this can create and protect local jobs, because when local businesses are continually supported, through buying their products and services, it leads sustainable economic development, which can reduce poverty in turn.
Through shopping, buying, procuring local, we can impact the economy. This is as relevant when we buy groceries and consumer goods, as when we decide where we spend our holidays. How businesses and authorities buy their products and services also has an enormous impact, whether this relates to office supplies, corporate clothing or uniforms, IT services or indeed construction services.
With Namibia’s negative trade balance - where Namibians buy much more from abroad and its neighbouring countries then what they sell - it is important to reverse this bad trend. Namibians must buy more locally, as buying local means that domestic needs are met domestically, and that less has to be imported from abroad. This will boost local trade, improve upon trade balance and reduce government debt over time.
Buying local does more than support local businesses as it also circulates money in the local economy.
Local procurement enhances the velocity of money, i.e. how fast money changes hands within Namibia and ensures that more people receive the benefit of having money, which safeguards living standards during an economic recession when the velocity of money tends to slow, as is the current case in Namibia which is causing people and businesses to spend less money. Buying local means that profits are spend or invested locally. Thus, money spent locally is re-spent locally, continually meeting local needs.
One of the major problems faced during an economic downturn, is the loss of employment.
Since money is hard to come by during an economic downturn, businesses reduce spending on salaries to avoid losses. This can further hurt the economy if less people have money to spend, and less spending leads to lower profits and again, to less employment. This negative feedback loop can slow down economic recovery or make the situation even worse.
Through collaborative efforts, Namibians can lessen this effect by supporting local businesses more during this time, this will protect employment because if local businesses make profit during difficult economic times, they are less likely to retrench. Buying local allows Namibian purchasing power to employ Namibians, practically enabling consumers to create and safeguard local employment.
Collaborative spending on the production and consumption of local goods and services can also lead to sustainable economic growth, which is when the output, income and spending in the local economy increases over time due to consumer demands being met. Sustainable growth under any economic condition is desirable as it provides more goods, income opportunities and more predictable consumption spending locally.
Lastly, buying more locally produced goods can aid in the eradication of poverty. Just as supporting local businesses can create employment opportunities, it can equip Namibians with a stable income which they can use to meet their basic needs such as food and shelter.
Furthermore, successful local businesses are more likely to contribute to local charities and fundraisers and employed citizens are more likely to contribute to the government tax base, which can help the government to meet budget requirements in general, as well as in providing welfare services that aid the unemployable seniors and disabled citizens.
Creating awareness for consumers to buy local can also enrich national heritage. Successful local businesses can keep towns unique since citizens will be inclined to adopt and innovate products according to their need and culture, further creating employment and business opportunities in the production and trade of these products.
During the current harsh economic conditions Team Namibia’s mantra, “together, our future is brighter”, reiterates the importance of teamwork among consumers and institutional buyers in lending a hand to the economy, in the spirit of Uukumwe.