'Timing of NEEEB most unfavourable'
The private sector's voice against the proposed economic empowerment legislation and its effect on the struggling economy is growing.
14 July 2020 | Business
Amid rife speculation that the Namibian Equitable Economic Empowerment Bill (NEEEB) might soon be tabled in parliament, the Construction Industries Federation of Namibia (CIF) has called on government to allow further input on the latest draft of the bill.
Construction has been in recession since 2016 and official indications are that the sector will remain so in 2020 and 2021.
The sector's contribution to the economy at constant 2015 prices has plummeted from more than N$8 billion in 2015 to slightly more than N$3 billion last year, the latest data from the Namibia Statistics Agency (NSA) shows. As a percentage of gross domestic product (GDP), construction's contribution at current prices fell from 5.6% in 2015 to 2.1% last year.
The Bank of Namibia (BoN) in April updated its economic outlook and expects the sector to grow by -16.3% this year, its worst performance since 2017. Next year, the BoN forecasts growth of -1.5%.
The central bank expects overall economic growth of -6.9% in 2020, a record recession in an independent Namibia.
Considering the economic state Namibia finds itself in, the timing of the tabling of the NEEEB is “most unfavourable”, the CIF said in a statement.
The federation called for “further opportunity for stakeholders to be engaged and give feedback on the latest draft” of the NEEEB, “in response to rumours that there will be no further public consultations and scope to engage with authorities regarding the so-called final draft of NEEEB, and that tabling the bill in the Namibian parliament is now considered a matter of urgency”.
The Namibian Employers' Federation (NEF), the largest employers' organisation in the country, in March also urged government to further consult with the private sector on the latest version of its empowerment legislation.
“The latest version of NEEEB “unfortunately still contains areas of questionable and undefined concepts which could lead to abuse and misuse,” the NEF said at the time.
The NEF said it was concerned that there might be “too much unchecked power” passed on to the minister responsible for implementation of the proposed NEEEB and also in the hands of the commissioner and his staff.
“Uncertainty causes a major problem and should be avoided as far as is possible,” the NEF said.
Cirrus Securities in March too warned that the latest version of NEEEB was “unlikely to have any positive benefits on the economy and the objectives of reduced inequality, improved growth and job creation”.
“This legislation can be expected to remain a material drag on growth going forward,” Cirrus said.
The CIF over the weekend urged “politicians and leaders to rethink current policies in order to fight poverty and achieve a more equitable social-economic environment, as there might be alternatives or best practices to achieve the same”.
“However, this could be best explored when extensive research has taken place,” the CIF added.
The statement continued: “The CIF has extensively engaged its members in 2016 and had made a detailed submission – as other organisations did - to the Office of the Prime Minister and is of the opinion that it is very important that lawmakers and the public remain engaged in order to establish how best to address poverty and inequality in Namibia.”
The CIF said “it is indeed very important to consider the pros and cons of the changed NEEEB, the anticipated timing of implementation, and in particular the suitability of NEEEB to achieve the objectives, especially if one were to consider the current global environment Namibia finds itself in”.