Moody's rating blamed on Geingob

The DTA president, McHenry Venaani, says President Geingob used “alternative facts” last week when he promised that the country's economy was on the brink of recovery.

Venaani blamed the economic mess in the country on the government, saying it created the chaos after it outsourced construction tenders to Chinese building companies.

“A non-trickle-down effect was created by government itself. The construction industry was killed by government. A lot of our capital projects' profits are going abroad – when somebody [local] finishes a tender he goes and buys a holiday home in Swakopmund, or buys his uncle a car or he pays his niece's school fees so there is an economic trickle-down effect,” he said.

Venaani also blamed the president's approach to handling increasing corruption as a reason for the Moody's downgrade.

He said his party believed the president's “nonchalant” attitude towards corrupt officials had played a key role in the country's credit downgrade. According to Venaani, the president's failure to hold corrupt officials accountable and his attempt to exonerate SME Bank board members of any wrongdoing raised red flags. “He is now saying he was misquoted but we watched him live on the national broadcaster,” Venaani said.



Abuse

Venaani further accused the Swapo government of abusing state coffers to sustain its political agendas through the establishment of a network through which it could spend resources in return for support and loyalty. “The exponential growth of the public service and the state-owned enterprise (SOE) sector, and the significant portion of public spending allocated to these, are evidence thereof. The ruling party has plunged the country into an unsustainable situation only so that it could sustain its hold on political power,” Venaani said.

Meanwhile, finance minister Calle Schlettwein has expressed dissatisfaction with the Moody's downgrade. According to him, it was unfair for Moody's to issue a downgrade without thoroughly assessing Namibia's ability to honour its debt obligations.

“This recent rating relied merely on an exchange of emails on a single item, that of outstanding invoices and how government is planning to settle them. This is highly regrettable,” the minister said.

According to Schlettwein, Moody's went about its business in a questionable manner, considering that the mid-year budget review was currently being developed by his ministry.

“A thorough assessment taking all factors into consideration would have been the proper way in dealing with reviewing Namibia's sovereign credit rating. The process followed by Moody's is, therefore, not systematic.”