Joblessness bites deep
Industry leaders and economists weigh in on the problem of unemployment and what can be done to alleviate it.
Massive job losses over the past months and the likelihood of more job cuts have again focused the country's attention on the high unemployment rate and raised questions on what can be done to solve the problem.
Experts agree that the solutions are complex and will require government and the private sector to come together and start ticking off a long checklist of measures that could help create jobs.
Some of the issues listed by experts are the need for a friendlier business environment, reviewing and amending restrictive bureaucratic red tape, the critical issue of high youth unemployment and the lack of job experience and skills training.
Gloomy
“Over 20 000 jobs have already been lost according to our estimation as a result of the ongoing economic crisis,” says Tarah Shaanika, the chief executive officer of the Namibia Chamber of Commerce and Industry (NCCI).
That estimate is conservative, some economists say.
The last labour survey, conducted in 2014, found a 28.1% unemployment rate but the latest figures remain educated guess-work, says Tim Parkhouse, secretary general of the Namibia Employers' Federation (NEF).
Parkhouse says although the numbers are unknown, it is clear that “our figures must be rising” as a result of the current economic climate and the impact of the government's recent cost cutting.
Klaus Schade, executive director of the Economic Association of Namibia (EAN), says: “Since the economy was doing quite well until recently, it can be assumed that more jobs were created in 2015, in particular because of the strong performance of the labour-intensive construction sector.”
That came to an abrupt end with the completion in 2016 of major developments in the mining sector, and since then construction has been one of the hardest hit sectors.
“The decline in construction activities has certainly had an impact on the level of employment in other sectors as well, such as transport. The loss of jobs and income will have a negative impact on the wholesale and retail trade sector and might result in job losses there as well,” Schade says.
He believes that the labour market will remain under pressure this and next year at least.
Ronnie Varkevisser, chief executive officer of the Namibia Manufacturers Association (NMA), says: “Most businesses except for the tourism industry are affected by the economic crunch. This is exacerbated by the fact that government is not paying suppliers. Employment will drop and job creation is becoming more difficult.”
He warns that the Namibian employment situation at present is “precarious”.
Shaanika says a double-digit unemployment rate in Namibia is not a recent development.
“Any unemployment level which is in the double-digit space is very high and should be treated as a crisis.”
Cut the red tape
Parkhouse says a major challenge that needs to be addressed urgently is to ensure that the country improves the business environment for new and existing businesses.
He says the NEF has pleaded with the government for years for “smart regulations when it comes to labour issues, not over-regulation”.
Parkhouse and others emphasise that red tape in terms of opening a new business, employing or firing staff and other bureaucratic hurdles create unfavourable conditions for attracting investment or encouraging entrepreneurship.
“We need to encourage people to open a business, and quickly,” says Parkhouse.
Shaanika says employment can only be created through increased business activities, and the government's role in boosting business is through “appropriate policy and legislative interventions which should result in the need to employ more people and therefore create employment opportunities.”
Although policies and laws in general are business friendly, Shaanika warns that the “conduct of certain individuals, departments and structures in government have not been in tandem with those policies”.
He explains that there has been “unnecessary bureaucracy and conflicting interests” which has hampered business growth and undermined the government's “good intentions to facilitate business growth and employment”.
Shaanika warns that business cannot grow when access is “marred by heavy bureaucracy, prohibitive costs and corruption. You cannot attract investments in such a situation.”
Gitta Paetzold, executive officer of the Hospitality Association of Namibia (HAN), says one of the obstacles faced by that industry is a labour law that does not account for the 24/7 nature of the tourism sector.
Another hurdle is regulations that “make it difficult for emerging entrepreneurs to find their feet”.
She describes a “labyrinth” of regulations and paperwork that potential entrepreneurs have to wade through.
Shaanika warns that Namibia tends to “behave like a very developed economy, while we are far from there. We have enacted legislations which are hugely restrictive on the part of business to be able to operation optimally and become competitive.”
He says labour regulations are too restrictive and at times can appear punitive. “We tend to be more concerned about those already employed and we protect them at all costs, but are less worried about the unemployed.”
In line with these concerns, the NEF has compiled a list of proposals to amend current dispute-resolution processes after it was announced that the labour act was being reviewed.
Parkhouse says amendments should focus on achieving a balancing act that is fair to employers and employees alike.
Learn and innovate
Although the current outlook is worrying, some say that the situation offers opportunities to review and revive the way business is done.
“I believe that the ongoing crisis in our economy is temporary; it will end in the near future. Job losses are also temporary, as are the difficulties in creating new jobs in the economy,” Shaanika says.
He says the current economic crisis has “shown us that too much domination of the economy by the state is dangerous and should be reduced. Business should become more creative and find ways of diversifying. We must grow the private sector and increase its contribution to the shape and structure of our economy.”
Danny Meyer, director of SMEs Compete, says despite the many challenges he remains cautiously optimistic. “It has dawned on the nation that things have to be done differently if a different outcome is craved.”
EAN's Schade believes there are numerous steps the government and the private sector, as well as the public, can take to soften the blow of the current economic situation.
He says Namibian consumers could “be choosier when shopping and support Namibian producers if price and quality are met”.
The new Public Procurement Act and Board could result in more goods and services sourced locally, which could create jobs.
“The private sector could also put more emphasis on sourcing goods and services locally and thus contribute to job creation,” Schade says.
Varkevisser of the NMA warns that the Namibian government should do more to ensure that its Growth at Home strategy is implemented.
“Foreign entities are entering the Namibian business space and are not buying local,” he explains.
Varkevisser says the private sector should focus on remaining internationally competitive and should “investigate innovative ways and means to improve productivity and efficiencies”.
Schade proposes that instead of cutting staff numbers, employers and trade unions should be more innovative, when it comes to reducing labour costs.
Implementing reduced working hours, a wage freeze or part-time jobs “are better options than retrenching some employees – although the degree of flexibility depends on the specific sector”.
Economist and Unam lecturer Dr Omu Kakujaha-Matundu warns that relying on the current status quo will not solve the problem.
He says one option is to “restructure the economy by revolutionising the agricultural sector” which will have the positive spin-off of creating new manufacturing opportunities.
Work skills and ethics
SMEs Compete's Meyer says reaching out to entrepreneurs in the informal sector should be an important focus.
“Helping entrepreneurs in the informal sector migrate or graduate to the formal sector is another strategy worthy of development. Once the micro-enterprise is position for growth, it will create jobs.”
Work ethics and attitude could play a role too, with many saying productivity in Namibia is extremely low.
Paetzold says the tourism industry has experienced a remarkable drop-out of staff who do not seem prepared to work in remote rural areas for long and are not willing to work after hours.
Shaanika adds that a lack of skills is another issue. “Most people are simply not appropriately skilled to be able to find the right employment or create income-generating opportunities for themselves.”
He says the training system needs a total overhaul, and adequate financial and technical support needs to be provided to graduates in order to promote production and job creation.
Parkhouse agrees that financial support should include guidance in business management.
One of the ways the NEF is tackling youth unemployment and skills development is the imminent launch of a national apprenticeship network, aimed at providing opportunities to young people to learn on the job.
Paetzold says HAN has also reached out to the government to review current legislation in order to help roll out apprenticeship programmes in future.
She adds that skewed skills development is another issue that contributes to unemployment.
She explains that most jobs in the large employment sectors such as mining, agriculture, fishing, manufacturing and tourism require vocational skills, which are often sneered at.
“Fortunately the Namibian government has realised that the educational focus did not match the demands of the labour market and we hope that in the near future, more emphasis will be put on vocation training,” she says.
JANA-MARI SMITH
Experts agree that the solutions are complex and will require government and the private sector to come together and start ticking off a long checklist of measures that could help create jobs.
Some of the issues listed by experts are the need for a friendlier business environment, reviewing and amending restrictive bureaucratic red tape, the critical issue of high youth unemployment and the lack of job experience and skills training.
Gloomy
“Over 20 000 jobs have already been lost according to our estimation as a result of the ongoing economic crisis,” says Tarah Shaanika, the chief executive officer of the Namibia Chamber of Commerce and Industry (NCCI).
That estimate is conservative, some economists say.
The last labour survey, conducted in 2014, found a 28.1% unemployment rate but the latest figures remain educated guess-work, says Tim Parkhouse, secretary general of the Namibia Employers' Federation (NEF).
Parkhouse says although the numbers are unknown, it is clear that “our figures must be rising” as a result of the current economic climate and the impact of the government's recent cost cutting.
Klaus Schade, executive director of the Economic Association of Namibia (EAN), says: “Since the economy was doing quite well until recently, it can be assumed that more jobs were created in 2015, in particular because of the strong performance of the labour-intensive construction sector.”
That came to an abrupt end with the completion in 2016 of major developments in the mining sector, and since then construction has been one of the hardest hit sectors.
“The decline in construction activities has certainly had an impact on the level of employment in other sectors as well, such as transport. The loss of jobs and income will have a negative impact on the wholesale and retail trade sector and might result in job losses there as well,” Schade says.
He believes that the labour market will remain under pressure this and next year at least.
Ronnie Varkevisser, chief executive officer of the Namibia Manufacturers Association (NMA), says: “Most businesses except for the tourism industry are affected by the economic crunch. This is exacerbated by the fact that government is not paying suppliers. Employment will drop and job creation is becoming more difficult.”
He warns that the Namibian employment situation at present is “precarious”.
Shaanika says a double-digit unemployment rate in Namibia is not a recent development.
“Any unemployment level which is in the double-digit space is very high and should be treated as a crisis.”
Cut the red tape
Parkhouse says a major challenge that needs to be addressed urgently is to ensure that the country improves the business environment for new and existing businesses.
He says the NEF has pleaded with the government for years for “smart regulations when it comes to labour issues, not over-regulation”.
Parkhouse and others emphasise that red tape in terms of opening a new business, employing or firing staff and other bureaucratic hurdles create unfavourable conditions for attracting investment or encouraging entrepreneurship.
“We need to encourage people to open a business, and quickly,” says Parkhouse.
Shaanika says employment can only be created through increased business activities, and the government's role in boosting business is through “appropriate policy and legislative interventions which should result in the need to employ more people and therefore create employment opportunities.”
Although policies and laws in general are business friendly, Shaanika warns that the “conduct of certain individuals, departments and structures in government have not been in tandem with those policies”.
He explains that there has been “unnecessary bureaucracy and conflicting interests” which has hampered business growth and undermined the government's “good intentions to facilitate business growth and employment”.
Shaanika warns that business cannot grow when access is “marred by heavy bureaucracy, prohibitive costs and corruption. You cannot attract investments in such a situation.”
Gitta Paetzold, executive officer of the Hospitality Association of Namibia (HAN), says one of the obstacles faced by that industry is a labour law that does not account for the 24/7 nature of the tourism sector.
Another hurdle is regulations that “make it difficult for emerging entrepreneurs to find their feet”.
She describes a “labyrinth” of regulations and paperwork that potential entrepreneurs have to wade through.
Shaanika warns that Namibia tends to “behave like a very developed economy, while we are far from there. We have enacted legislations which are hugely restrictive on the part of business to be able to operation optimally and become competitive.”
He says labour regulations are too restrictive and at times can appear punitive. “We tend to be more concerned about those already employed and we protect them at all costs, but are less worried about the unemployed.”
In line with these concerns, the NEF has compiled a list of proposals to amend current dispute-resolution processes after it was announced that the labour act was being reviewed.
Parkhouse says amendments should focus on achieving a balancing act that is fair to employers and employees alike.
Learn and innovate
Although the current outlook is worrying, some say that the situation offers opportunities to review and revive the way business is done.
“I believe that the ongoing crisis in our economy is temporary; it will end in the near future. Job losses are also temporary, as are the difficulties in creating new jobs in the economy,” Shaanika says.
He says the current economic crisis has “shown us that too much domination of the economy by the state is dangerous and should be reduced. Business should become more creative and find ways of diversifying. We must grow the private sector and increase its contribution to the shape and structure of our economy.”
Danny Meyer, director of SMEs Compete, says despite the many challenges he remains cautiously optimistic. “It has dawned on the nation that things have to be done differently if a different outcome is craved.”
EAN's Schade believes there are numerous steps the government and the private sector, as well as the public, can take to soften the blow of the current economic situation.
He says Namibian consumers could “be choosier when shopping and support Namibian producers if price and quality are met”.
The new Public Procurement Act and Board could result in more goods and services sourced locally, which could create jobs.
“The private sector could also put more emphasis on sourcing goods and services locally and thus contribute to job creation,” Schade says.
Varkevisser of the NMA warns that the Namibian government should do more to ensure that its Growth at Home strategy is implemented.
“Foreign entities are entering the Namibian business space and are not buying local,” he explains.
Varkevisser says the private sector should focus on remaining internationally competitive and should “investigate innovative ways and means to improve productivity and efficiencies”.
Schade proposes that instead of cutting staff numbers, employers and trade unions should be more innovative, when it comes to reducing labour costs.
Implementing reduced working hours, a wage freeze or part-time jobs “are better options than retrenching some employees – although the degree of flexibility depends on the specific sector”.
Economist and Unam lecturer Dr Omu Kakujaha-Matundu warns that relying on the current status quo will not solve the problem.
He says one option is to “restructure the economy by revolutionising the agricultural sector” which will have the positive spin-off of creating new manufacturing opportunities.
Work skills and ethics
SMEs Compete's Meyer says reaching out to entrepreneurs in the informal sector should be an important focus.
“Helping entrepreneurs in the informal sector migrate or graduate to the formal sector is another strategy worthy of development. Once the micro-enterprise is position for growth, it will create jobs.”
Work ethics and attitude could play a role too, with many saying productivity in Namibia is extremely low.
Paetzold says the tourism industry has experienced a remarkable drop-out of staff who do not seem prepared to work in remote rural areas for long and are not willing to work after hours.
Shaanika adds that a lack of skills is another issue. “Most people are simply not appropriately skilled to be able to find the right employment or create income-generating opportunities for themselves.”
He says the training system needs a total overhaul, and adequate financial and technical support needs to be provided to graduates in order to promote production and job creation.
Parkhouse agrees that financial support should include guidance in business management.
One of the ways the NEF is tackling youth unemployment and skills development is the imminent launch of a national apprenticeship network, aimed at providing opportunities to young people to learn on the job.
Paetzold says HAN has also reached out to the government to review current legislation in order to help roll out apprenticeship programmes in future.
She adds that skewed skills development is another issue that contributes to unemployment.
She explains that most jobs in the large employment sectors such as mining, agriculture, fishing, manufacturing and tourism require vocational skills, which are often sneered at.
“Fortunately the Namibian government has realised that the educational focus did not match the demands of the labour market and we hope that in the near future, more emphasis will be put on vocation training,” she says.
JANA-MARI SMITH
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