A Development Bank of Namibia Covid-19 business relief loan has helped to preserve approximately 950 jobs by providing finance of N$53 million to pay salaries of employees of the well-known tourism and hospitality operation, the Gondwana Collection.
According to the statement released this week, the 950 employees are distributed among 28 accommodation establishments and companies that make up the group.
At the height of the Delta phase of Covid-19 infections, the statement said Gondwana committed to, as far as responsibly possible, preserving its workforce and their income.
“Among measures the group undertook, management has taken substantial salary cuts, and other employees have also accepted salary cuts. Other measures to reduce costs included tightening of work schedules, overtime restrictions, leave schedules and operating with skeleton staff where possible,” explained the statement.
Talking about the loan, DBN executive for marketing and corporate communication Jerome Mutumba said cuts to income have preserved employment and income thus far.
He further assured DBN is doing everything to preserve the industry for the future.
This includes a moratorium on repayments for existing bank customers in the tourism and hospitality sector, restructuring of loans and extending the Covid-19 business relief loans to new customers.
“The investments that the Bank is making in the sector, through its loans, recognise the historic contribution of tourism to the Namibian economy but, more importantly, the need to preserve capacity for the future,” Mutumba pointed out.
However, he also said that the Namibian economy must be rebalanced to shed reliance on a few highly productive sectors.
In this regard, he said, although tourism and hospitality must be preserved, manufacturing and transport and logistics must be further developed.
Not only will this make Namibia more economically self-sufficient, but it will also improve the attractiveness of the brand Namibia for foreign direct investment in future.
Activities in the tourism sector remained generally weak under the influence of the Covid-19- induced travel restrictions and social distancing regulations, although tourism did register a slight recovery during 2021, compared to 2020.
According to Bank of Namibia 2021 annual report, the sector’s real output increased markedly by 10.4% in 2021 after recording a devastating negative growth rate of 30.4% in 2020.
The rise in 2021 was manifested in increases in the number of bed and room nights sold by the hospitality industry, as well as in regional and international passenger arrivals at Namibian airports.
The increase was largely due to the easing in travel restrictions, as the economy gradually opened up, supported by the local and global vaccine rollout.
The bank stated that Covid-19 waves hit Namibia severely, especially at the beginning of 2021, then in June/July and again in November/December 2021, when the discovery of the Omicron variant resulted in tighter travel restrictions being imposed, especially on travellers to and from the southern African countries, including Namibia.
The central bank in its report stated that the tourism sector’s pace of recovery continues to depend on the emergence of new Covid-19 variants and the pace of vaccination rollout in Namibia and globally.