Hage: ‘Air Nam must be liquidated’

Namibia cannot afford to keep rescuing loss-making Air Namibia and the national carrier should be liquidated, president Hage Geingob said at his State of the Nation Address last week.

Speaking to lawmakers in parliament on Thursday, Geingob said since the airline was not making a profit, the country could not afford to keep bailing it out.

"Air Namibia must be liquidated, we have a serious problem with Air Namibia. It must be restructured. It is not making any profits and it is just being bailed out. We must do something about it," Geingob said.

In October 2019, the airline has been forced to cut its operating costs to the bone after the treasury refused a N$2-billion bailout, and warned in November that it might be forced to shut down operations if it did not receive a rescue package.

The situation has been made dire by the outbreak of the novel coronavirus, which saw the airline freeze operations for about two months as the country was on lockdown.

In the 2020/21 budget recently tabled by finance minister Iipumbu Shiimi, a total of N$984.6 million was allocated to Air Namibia in the current fiscal year.

SOE minister Leon Jooste told Republikein this amount will only cover “immediate operational costs” or the airline. The nearly N$1 billion does not cater for Air Namibia’s new business plan which is supposed to rescue it from bankruptcy, Jooste said.

He said this plan will be presented to the cabinet committee on treasury this week.

Poverty

Geingob on Thursday also said government will introduce a more refined basic income grant for Namibians as a way of dealing with poverty challenges.

The basic income grant will replace the food bank and aim to sustain Namibians under a challenging economic situation.

Geingob said Namibia remains among the most unequal societies in the world, confirming the deeply embedded structural nature of its challenges.

He said the status quo is not sustainable and that people-centred reforms will have to be intensified that result in tangible improvements in the lives of people.

"The delivery of residential erven has been prioritised but the national housing backlog remains above 300 000. I am cognisant that despite these milestones we need to continue prioritising housing development. Although the bucket toilet system has not completely been dealt with, we have severely reduced it by 70%," he said.

Geingob said the country will continue to provide more funding to social safety nets as well as catering for the marginalised.

Namibia, South Africa and Botswana are among of the very few countries in Africa that have managed to sustain the provision of old-age grants as well as providing a social safety net, the president said.

"Namibia has spent more than N$9 billion in the past financial year addressing challenges faced by society and dealing with the challenges of poverty and inequality," Geingob said.

Debt

The president said he was concerned about the country's projected debt stock for 2020/21, which has surpassed the debt threshold set by the Southern African Development Community (SADC).

"It is not acceptable, we did not expect the economic downturn, the drought, and Covid-19," Geingob said.

"Now we have to divert funds. That debt is not sustainable. We must do something to bring it down. I admit the debt is not manageable. We must just do something to manage it," he added.

Namibia's debt stock for 2020/21 fiscal year is seen rising to N$117.5 billion, or 68.7% of its gross domestic product (GDP), from the 54.8% estimated for the 2019/20 financial year.

The budget also shows that Namibia's economy is expected to contract by 6.6% this year and by 1.1% in 2021. – Own report, Nampa and Nampa/Xinhua