Popular Democratic Movement (PDM) parliamentarian Johannes Martin on Wednesday tabled a motion in the National Assembly for the House to debate the establishment of an association for the informal sector. He stated that there is no doubt the informal economy plays a decisive role in the everyday lives of hundreds of thousands of Namibians.
“The informal sector plays a fundamental role in our economy. The 2018 Namibia Labour Force Survey reported that the unemployment rate in Namibia stood at around 33.4%, and that a staggering 448 674 Namibians are employed in the informal sector,” Martin said.
He believes the long-held conventional stereotypes that the informal economy is just a ‘black sheep market’, characterised by the non-payment of taxes, raising unfair competition against the formal market and that is it not linked to the formal economy, is far from the truth.
Martin said the informal economy is an active player and contributor to the economy of any country, including Namibia. He said the motion will address shortfalls found in terms of policy and legislation around the informal economy through the formation of an association for informal traders.
An organised association, according to him, will further enable informal traders to pool their resources through revolving savings and credit associations, as compared to formal micro-financial institutions which require high interest rates, therefore pushing informal traders away.
“It is further regrettable to note that there exists no database of informal traders in our local authorities, even though there are local economic development (LED) officers employed in these local authorities. These are all challenges that can be resolved by the establishment of an association for informal traders,” he noted.
He added that it is regretful to note that the importance of the informal economy in Namibia continues to be disregarded. “The significant majority of those trading in the informal economy are living in a persistent state of uncertainty and insecurity. Their operations are considered to be illegal, and hence they are treated like criminals by the security apparatus”.
Martin stated that the suppression of informal traders does not solve any problems, but instead creates more challenges. Restricting informal activities also gives birth to unemployment and contributes to a rise in poverty levels, thus catapulting an increase in crime across the board. Government must thus ensure the establishment of an informal traders’ union that will protect and lobby for the interests of the informal sector in the context of economic reforms to take place across towns.
“This requires creating effective communication channels for exchanging information between informal traders, urban authorities and other development partners,” he continued.
Meanwhile, trade minister Lucia Iipumbu said micro, small and medium enterprises (MSMEs) are the root of many economies around the globe, and particularly in Namibia. If supported and developed, they can grow into larger enterprises, with a greater contribution to the country’s gross domestic product.
Iipumbu made these remarks recently at the launch of the Know2Grow (K2G) initiative, spearheaded by the Namibia Investment Promotion and Development Board (NIPDB). K2G is an MSME regional knowledge dissemination initiative on financing and market access focusing on sectors such as agriculture, horticulture and food processing. -mndjavera@nepc.com.na