ONGWEDIVA – Although the Covid-19 pandemic caused significant hardship to Namibians, the Development Bank of Namibia has reported an improvement and a resumption of economic activities and growth.
The bank’s CEO Martin Iinkumbi said over the past four quarters, Namibia’s GDP has grown.
“In quarter two of 2021, it grew by 5.5%. In quarter three of 2021, it grew 6%. In quarter four it grew 3.5%. And in the first quarter of this year, it grew by 5.3%,” he said in Ongwediva over the weekend.
Iinkumbi mentioned that tourism, one of Namibia’s most important employers, is recovering.
The Hospitality Association of Namibia’s accommodation data for April this year showed it was over 36,5%, compared to 27% in April last year and 1,3% in April 2020.
“Namibia’s mining index for other non-ferrous metal ores increased by 19.4% in quarter one of 2022. Uranium mining is surging, driven by demand for alternative sources of energy, given current events,” he added.
The Uis Tin Mining company has also entered into a N$100 million agreement with the DBN to finance the Uis Phase 1 Stage II continuous improvement project.
Despite the abovementioned economic growth, DBN statistics show that there is still a demand for finance.
Loan approvals in 2020/21 amounted to N$999.3 million, N$975.9 million in 2021/22, and the DBN loan approval has already reached N$638 million to date in 2022/23.
“These statistics support the DBN’s philosophy that after the dry season, the rains return, that growth resumes, and that economic capacity must be preserved to make the most of the future that lies ahead,” Iinkumbi noted.
Since the onset of Covid-19, the DBN took steps to support economic activities by supporting the continuation of businesses, where possible.
This included the intervention of extended repayment holidays to halt the burden of repayments for borrowers who were unable to meet loan repayments due to reduced business income as a result of the Covid-19 pandemic.
“These measures were extended to all SMEs, and the tourism and hospitality industry. They were also offered to all other enterprises that borrowed from the Development Bank voluntarily to all those that wish to have their loans extended by at least 12 months or more,” he stated.
The bank also offered a Covid-19 Relief Loan to provide three- or six-months’ working capital.
This loan helped save 953 jobs for a major Namibian tourism and hospitality enterprise.
“As the economy begins to grow, the DBN is taking further steps to strengthen the recovery,” he added.
New business recovery loan
As some existing businesses have lost ground to Covid-19 and need to rebuild and strengthen their sources of revenue, the DBN has introduced a new business recovery loan that offers 5.925% interest over 36 months or less.
This loan is aimed at developing sustainable, innovative, new products and services to address reduced levels of revenue for businesses which were able to remain open during Covid-19. Diversification and expansion assists businesses to become more resilient to future economic shocks. As well as working capital, the acquisition of plant and equipment and/or other short-term financing requirements help to strengthen the business.
To build the pool of future entrepreneurs, the bank has likewise implemented its skills-based facility for young professionals and artisans.
Iinkumbi said the bank will be lending finances to young entrepreneurs who do not have professional or artisan qualifications, through SME lending.
“Covid-19 has been a two-year challenge. However, there are persistent, longer-lasting challenges that the bank is addressing,”