Besides the collapse of many sectors and the unprecedented retrenchment of thousands of workers, especially in the construction, mining, and retail sectors, one happens to wonder why our policymakers are still high on the idea of Foreign Direct Investment (FDI) being the only messiah of our ailing economy. This leaves me with only one question, why are we sleeping on a gold mine?
You don’t need to be an economic analyst to actually conclude that the informal sector remains one of the sectors resilient to all the economical contractions and interestingly the sector seems to be consequently thriving. Statistics from credible institutions have shown that the informal sector alone absorbs the highest chunk of unemployed youth. If that is the case, why is the government not prioritising informal sector development? With a moderate budget, the informal sector will become a vibrant sector that will employ thousands of unemployed youth, creating wealth and accelerating infrastructure development for the informal settlements. As much as bureaucrats keep preaching about employment creation, this dream will only come true when we invest in our own people. Due to increased capital flow within the informal sector, more and more SMEs will be transforming to formal businesses, therefore, increasing the number of taxpayers. This will result in capital flowing within the local economy and at the same time most Namibians will be benefiting from this whole ecosystem.
We need FDI as a country, but it will be naïve of economic advisors to not see that the informal sector has the potential to turn around the economy, and if they see it, why are they not working on a sustainable implementation plan? We hold expensive annual economic conferences but are we really getting any positive results from this? Apart from investment pledges that take ages to materialize if they do materialize, what else are we gaining from all these conferences? The conference budget alone could make a significant impact if well invested within our most impoverished communities. Investors are only willing to invest in a place that guarantees the return on investments (ROI), and if our economy keeps shrinking every year it will be a waste of time and resources when hosting all these conferences.
Since the Ministry of Finance is so determined to tax barbers, kapana sellers and everyone else trying to make a living in an unconducive environment, it will be best if the government first starts to incentivize the informal sector and inject capital annually, then only after that start thinking about tax.
* Follow me on Twitter: @FestusMalakia
2020-01-31 08:01:22 | 28 days ago