Lucas Tshuuya

The answer to this question is in affirmative, because in the true sense of the word, we are debt trapped.

The founding father Dr Sam Nujoma was known for his opposition to borrowing money from outside, because according to him, Namibia could be recolonised via borrowing. In 2003, Namibia wanted to overhaul its education system, but unfortunately, there was no budget to cater for that. Nujoma warned that borrowing from the World Bank would put Namibia in a debt trap and thus refused to borrow from the Washington based institution and its sister body, International Monetary Fund (IMF).

Today, we are heavily over-indebted as a result of reckless borrowing as if we don’t heed the call of Nujoma. Some hard facts depict that in July 2018, the GRN borrowed from the Africa Development Bank (AFDB) an amount of US$217.8 million, in March 2020 an amount of US$121.7 million, in March 2021 an amount of N$1.5 billion, and in September 2022 an amount of US$134.9 million.

The Bank of Namibia in its quarterly report indicates that by June 2022 foreign debt swell to N$32.5 billion whereas local debts stood at N$91 billion. One wonders whether the terms and duration of these loans were disclosed to ordinary Namibians, especially youth who will be the last men and women standing. Chances exist that they will battle to pay back these loans incurred and contracted by their leaders who by the time such loans will be due and payable would be lying already in their graves and the youth will choose whether to surrender the country’s natural resources, and infrastructures like the harbour, national parks etc. or they risk being blacklisted.   

On individual consumers/borrowers, credit providers like micro-lenders (loan sharks) found an opportunity to exploit them, because most of the consumers came from historically disadvantaged societies and are low income earners.

These micro-lenders are the main contributors to social degradation as they adopt a business of selling credits to consumers in a reckless manner as opposed to being providers of financial literacy to consumers before extending credits to them as they don’t perform proper assessment of consumer affordability and ensure responsible borrowing. Consumers are enticed to enter into credit agreements without understanding the consequences of borrowing such as interest rate charged, risk involved, costs or obligations they have because in most cases, these credit agreements are not in plain language, which could be understood to an extent that an ordinary consumer of the class of persons for whom the agreement intended with an average literacy skills and minimal credit experience could understand them.   

This state of affairs is said to be the cause of depression, end marriages, tear families apart, negatively impact consumers’ health and many times cause suicide among consumers. Consumers found themselves debt trapped under the guise of now having access to credit facilities whereas in truth it’s a catch as individual consumers do not have the bargaining power to resist unfair contract terms proposed by loan sharks leading to breach of contract later.    The government, as custodian of consumers, failed them as it dilly-dallying on regulating these type of credit transactions and no consumer credit law exist or consumer protection Act, the latter seems stuck in gear one as in July 2014, the government through Law Reform and Development Commission produced a discussion paper apparently to study the impact credit transactions have on consumers, but it fell short as to date it has no enforcement mechanism, simply because it was just a discussion paper. Similarly, the Ministry of Industrialisation and Trade drafted a National Consumer Protection Policy for 2020-2025, but it also has no force as the Bill could not be passed by the legislative body to become a law with enforcement mechanisms, including having a national credit regulator that serves as a watchdog for social and economic welfare and fostering debt re-organisation.

In the premises, if Namibia had adopted a consumer protection legislation, aggrieved consumers by conduct of credit providers would have recourse at a special court or tribunal in a form of national credit tribunal, sadly we have none, but we have a special court for traffic violations and commercial court for commercial litigation one wonder what is the priority as no regards had to national credit tribunal. Therefore, it is recommended Namibia should act quickly to protect its citizens/consumers from money-mongers who prey on vulnerable consumers as this will result in the nation falling into depression because of over-indebtedness.    

*Lucas Tshuuya is a graduate of NUST, Unam and the University of South Africa .