WINDHOEK – “One of the most productive meetings I have participated in for ages,” said Robby Amadhila. “Not a talk shop, but a gathering of high-level representation from government, the central bank, commercial banks and NCCI meeting to find solutions to challenges besetting entrepreneurs that is placing Namibia’s economy at risk,” added Amadhila, a Director of the Namibia Chamber of Commerce and Industry (NCCI) who is also an Ondangwa based entrepreneur.
He was referring to the recent meeting chaired by Ebson Uanguta, Deputy Governor of the Bank of Namibia (BoN), after the NCCI’s request for the central bank to temporarily relax Namibia Determination 2 and International Financial Reporting Standards 9 (IFRS9).
Amadhila said the NCCI could not stand and idly observe how Namibian-owned and managed enterprises are experiencing challenges in servicing debt, given the prevailing tough economic conditions.
“Anyway, difficulties experienced by local enterprises are not a secret,” said Amadhila.
The NCCI Director added; “The ever-increasing number of loan defaults and repayment recovery action adverts in the legal sections of daily newspapers prompted NCCI to seek an urgent solution, as our economy is at risk.”
Amadhila noted that financial institutions are repossessing business assets that were committed as collateral against loans for expansion and start-ups at an unprecedented rate never seen before in post-independent Namibia.
According to NCCI Chief Executive Officer Charity Mwiya, lenders follow the prescribed legal recourse and this in turn is leading to the closure of enterprises at an alarming rate resulting in a worrisome number of job losses.
Mwiya opines that this is a major contributor to the underperformance of government’s revenue collection. “So something needs to be done right now,” she said.
The meeting hosted by the central bank in Windhoek on Tuesday morning was spurred by NCCIs call for a relaxation of Namibia Determination 2, as a strategy to give struggling entrepreneurs a chance to survive the economic downturn.
Mwiya stated that in this way the rate of business failure will minimise and the country’s economy will be helped to recover, thereby negating job losses. Mwiya praised BoN for swiftly responding to NCCIs call for a meeting, but cautions that follow-up action by stakeholders represented will be a determining factor in terms of its success.
At Tuesday’s meeting commercial banks present pledged to be more accommodative of entrepreneurs who are finding it difficult to meet loan commitments, saying they would do all possible to help entrepreneurs who yielded to government’s clarion call for growth at home, by borrowing to investing in plant, machinery and property.
However, the banks cautioned that entrepreneurs must commit to achievable realistic business turnaround strategies.
In addition, BoN undertook to explore how to manage the legal framework as it pertains to a relaxation of Namibia Determination 2 and the central bank promised to continue this consultative engagement process as a business rescue strategy.
Also, Executive Director of the Ministry of Finance Ericah Shafudah, reaffirmed government’s commitment to local procurement and a mechanism to favour local firms over foreign-owned enterprises.
Shafudah committed to ensuring that all processes and procedures will be followed rigidly, as it pertains to public sector servicing of debt with local providers of goods and services. To ensure that government ministries, regional government and municipalities pay accounts timeously so as to avoid creating cash flow problems for vendors of goods and
services.