Save jobs, buy local
16 May 2019 | Business
The agency that promotes Namibian products and services in the local market says all Namibians must be encouraged to support local businesses.
Team Namibia said coming out of a prolonged recession, the impact of reduced consumer spending by both businesses and private individuals has had a marked slowdown effect on the economy.
“To counter this effect, consumers should make it their top priority to buy only Namibian products where available and in as much as they can afford to.”
Team Namibia said the current financial and economic situation has forced many households and businesses to tighten their budgets in order to avoid going into debt or to effectively managing it. However, this can generally have a negative effect of slowing down the economy even further through reduced consumption spending.
“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 to sustainable economic development, which can in turn reduce poverty,” Team Namibia said.
Team Namibia account director Bärbel Kirchner said through shopping, buying and procuring local products, Namibians 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,” she said.
Kirchner said that buying local means that domestic needs are met domestically, and that less has to be imported from abroad. This will boost local trade, improve the trade balance and reduce government debt over time.
She added that buying local does more than support local businesses, as it also circulates money in the local economy.
“Local procurement enhances the velocity of money, 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, which is the current case in Namibia, and is causing people and businesses to spend less money.”
According to Kirchner buying local also means that profits are spent or invested locally.
“Thus, money spent locally is re-spent locally, continually meeting local needs.”
She said one of the major problems that a country is faced with 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.”
Kirchner said collaborative efforts by Namibians can lessen this effect by supporting local businesses more during this time, which will protect employment, as locally businesses will make a profit during these difficult economic times and be less likely to retrench.
“Buying local allows Namibian purchasing power to employ Namibians, practically enabling consumers to create and safeguard local employment.”
Kirchner further said that 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.” She lastly said that buying more locally produced goods can aid in the eradication of poverty.
Kirchner said 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 government meet budget requirements in general and provide welfare services that aid unemployable seniors and disabled citizens.