Manufacturers see doom and gloom

Brian Black NMA Chairman“Namibia is running like an engine with a few screws loose.”

Augetto Graig – Namibia is full of incredible plans, but “unless we are given opportunities to take the country forward and chances are not always given to foreigners,” there is little hope, NMA chairman Brian Black says.

Speaking at the annual Namibia Manufacturers’ Association gala dinner and awards evening on Thursday Black said that the current state of the Namibian economy is the worst seen during the last decade. “Are we as a nation doing enough?” he asked the gathered leaders of industry in the country.

Finance Minister Calle Schlettwein countered Black’s dark perception of the economy saying there is cause for some optimism. “It is like the arrival of rain showers but there is still the prospect of drought,” Schlettwein said at the same event.

Action and leadership skills are in short supply, Black said.

“Look at South Africa which presents huge opportunities for foreign direct investment,” he said. Rather than unlocking opportunities like these, “Namibia is running like an engine with a few screws loose”, Black said.

Slipping

“I am concerned,” the veteran industrialist said, referring to Namibia’s increasingly poor performance on Ease of Doing Business Index released annually by the World Bank. Since 2011, Namibia has tumbled about 40 places.

It currently ranks 108th overall out of 170 countries worldwide. It’s ranking for Starting a Business is 170th.

Black says there are at least ten steps to complete for anyone who wants to register a business in Namibia and it can take up to 66 days to complete. Also getting necessary skills into the country from beyond borders is a nightmare.

“I am delighted that [the ministry of ] home affairs has its house in order. It may take only five days to get a passport, but to get skills from across the border, we struggle to get work permits,” he said.

Another concern is Namibian labour laws, which Black said is necessary after Independence to deal with the bad colonial legacy. “But today you have to ask yourself are those labour laws working or are they forcing Namibians who are employed to join the unemployment lines?” he said.

According to the latest data released by the Namibia Statistics Agency (NSA), 349 383 people or 34% of the country’s labour force were unemployed in 2016.

Black says the NMA has embraced the development objectives of the government as outlined in the Harambee Prosperity Plan and the Fifth National Development Plan (NDP5) but asks: “What is really preventing us from achieving our goals?”

‘Green shoots’

Schlettwein said the green shoots of economic growth are visible although they are still covered in doubt.

Globally there are still significant risks to avoid, including growing protectionism, tightening of fiscal policies and rising geo-political tensions. However, Sub-Saharan Africa is on the path to economic recovery and is helping the world economy recover led by emerging and developing markets.

“There is light at the end of the tunnel,” he said, particularly due to the global recovery of commodity prices. In particular copper, zinc and diamonds are doing well, although uranium prices are still depressed.

The economies of South Africa and Angola will continue to affect any rehabilitation of the Namibian economy because the two giants have direct impact on Namibia’s small open economy, Schlettwein said.

“At home there is reasonable optimism for more economic growth relative to 2016,” he said. Particularly mining and agriculture are expected to help turn the tide which has largely been back by Namibia’s sound economic fundamentals which strengthen by the day, he said.

“We have managed to weather the storm,” said Schlettwein.

Talking about the importance of the manufacturing sector in Namibia, he said it contributed on average 11.8% to the gross domestic product (GDP) over the last ten years. He quoted the 2016 labour force survey which shows that manufacturing employed some 44 420 people, or 6.6% of the total workforce.

Integration

Schlettwein said tax breaks incentivise manufacturing growth and that manufacturers should take advantage of opportunities offered by the new public private partnership law now in effect. They should also actively participate in developing the legal framework for implementation of the new public procurement act. The finance ministry is currently busy working out the regulations, he said.

Most importantly, manufacturers must lead the way for Namibia to benefit from regional integration.

“My principal message is that regional integration must have our interests at heart. The real economy is at stake. We need win-win solutions by putting our realistic terms up front,” he said.

“Developing industrial capacity is the first step. Look at renewables, jewelry, meat and fish processing, leather and wool, automotive components. Look at our trade partners. We do not trade with Africa. Without this the growth in sub-Saharan Africa will not benefit us. We must up our game and trade in finished goods,” he said.

“Let us work together to move forward fast. The private sector is the key player. Government invites the private sector to take this agenda forward,” he said.

Regarding corruption Schlettwein said: “The most important element is that we must all have the will to fight corruption. If we just talk and do not vigorously investigate, we will not make it,” he said.