The Namibia Local Business Association met with President Nangolo Mbumba at State House on Wednesday to express concern over issues they see as pertinent to the survival of local businesses.

The smuggling of cheap fuel from Angola, protection of local businesses, the repo rate and government procurement formed part of the discussions. 

The State House meeting room was packed with Naloba executives and members, while Mbumba was accompanied by Vice President Netumbo Nandi-Ndaitwah and Cabinet ministers, who were ready to answer questions.

Naloba representatives noted that some businesses in northern towns have ceased operations due to competition from cross-border fuel smuggling. ‘Ngungula’ is the colloquial term for fuel smuggled from Angola, where it is cheaper than the fuel sold at Namibian service stations. 

A five-litre container of petrol or diesel, which would cost N$530 at local service stations, is sold for N$60.

A 25-litre container goes for as little as N$300 from Angola.

Those who purchase the fuel for profit then resell the 25-litre container for between N$400 and N$450, making a profit of N$100 to N$150.

Ngungula is derived from the Oshiwambo word ‘okungungula’, which means to trot or run steadily.

Naloba is a relatively newly established business association – open to all locals. 

It was founded to serve as a voice for business interests, and address the needs of indigenous businesspeople. 

Naloba vice president Peter Amadhila told Mbumba that the organisation wants to be recognised as a significant government partner in creating employment and wealth.

In response, Mines and Energy minister Tom Alweendo said the government is aware of, and understands the problem. 

He stated that Namibia is still exploring ways to address the issue of ngungula service stations, which are basically meeting points for buyers and sellers along the Angola-Namibia border.

Fuel in Angola is subsidised by the government for local consumers. 

He said that his counterpart informed him of efforts to discontinue these subsidies, as it is unfair for citizens of other countries to benefit illegally.

He assured the concerned visitors that the government is in talks with Angola about when the subsidies will be removed to reduce the price differential between the two nations.

“Angola is aiming to gradually remove the subsidy to ensure the price difference is not too large. This will discourage Namibians from travelling to Angola for fuel, and reselling it here. The solution lies in reducing the price differential or in apprehending those involved,” said Alweendo.

However, Namibian law enforcement has struggled for years to address the issue due to the porous border between the two countries.

He added that despite businesses closing down due to this illegal activity, the government is also losing revenue through the levy.

Protection

Amadhila also questioned the delay in the implementation of the Investment Promotion Bill.

“The absence of this bill is creating anarchy in the country. Who is delaying this important piece of legislation? I believe the bill will protect local businesses against foreign investors,” he questioned.

He advised that foreign investors should not come to Namibia to sell ‘vouchers’, as this is akin to taking bread out of Namibians’ mouths. 

He therefore advocated for foreign investors to focus on larger opportunities beyond what local businesses can invest in.

Repo rate

Amadhila continued that the repo rate is too high, and places considerable financial stress on businesses. 

The central bank last month decided to keep the repo rate unchanged at 7.75%. 

Similarly, the prime lending rate remained steady at 11.50%. 

The repo rate is the interest rate at which commercial banks borrow short-term loans from central banks.

An increase in the repo rate aims to raise commercial bank lending rates, limit the money supply and theoretically control inflation.

Finance minister Iipumbu Shiimi responded that the repo rate is not abnormal at this level. 

“This is a normal rate, but we might start seeing a decrease in the future. However, the relief will not be significant,” he said.

Procurement

Amadhila stated that the government is now keeping its contracts to itself, excluding the private sector. 

He said these actions create loopholes for potential corruption. 

He also took issue with the defence ministry-owned August 26 Holdings, which has faced numerous corruption allegations over the years.

However, Shiimi said the government intends to support local businesses. 

He explained the decision to award a substantial N$255 million tender for the construction of classrooms nationwide to August 26 Holdings:

“The main reason was that the education ministry was urgently needing classrooms, and the government decided to step in because the private sector was very slow, compared to August 26.”

According to the finance minister, this is not a permanent situation but a means for the government to address backlogs.

Meanwhile, Vice President Nandi-Ndaitwah noted that the private sector does receive tenders, but often delivers slowly, which frustrates the government.

Another issue discussed during the visit was the need for the government to present clear strategies on the drought situation, unaffordable municipal services and the lack of affordable land for housing.

Mbumba assured the delegation that the government remains open to such discussions, and appreciates their input.

“Please, if you have problems, go directly to the ministers, and address these issues for the benefit of our people. Let us speak the same language because we need each other,” he said. 

-mndjavera@nepc.com.na