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More than 800 companies closed due to Covid-19

2022-10-27  Maihapa Ndjavera

More than 800 companies closed due to Covid-19

Yesterday, the Namibian Employers Federation (NEF) released some shocking figures with regards to the negative effects of Covid-19 on the local economy. In 2019, 158 companies and in 2020 some 52 companies filed for liquidation in the High Court. 

This rapidly escalated to 815 registered companies and closed corporations who voluntarily deregistered between January 2020 and February 2021. This was mainly due to tremendous financial pressure, as companies failed to make profits due to disruptions from the pandemic.

These figures were confirmed in a report released by the NEF in partnership with Skills Initiative for Africa (SIFA) titled “The rapid assessment of reskilling and upskilling need arising from effects of the Covid-19 crisis”.

The report stipulated that in 2020, 896 companies retrenched 12 198 workers.

Furthermore, it was stated that 80% of Namibians rely on the local market for food, but as 60% of domestic food stuffs are imported, it left the most vulnerable in Namibian society suffering more due to escalating local and global inflation.

“The full impact will depend on how long the Covid-19 pandemic persists. In the absence of reliable and recent unemployment statistics and years of poor economic growth, exacerbated by the Covid-19 impact, current unemployment could well be 40% of the overall workforce,” reads the damning report.

On Tuesday at the release of the report, Gitta Paetzold, CEO of the Hospitality Association of Namibia (HAN), said the tourism industry has always been prone to shocks (war, disease, weather), but the Covid-19 pandemic produced the most acute economic and human shock to international travel and tourism. As a result, Namibia’s tourism sector lost about 80% of business due to Covid in 2020. 

“Some 30% of jobs were lost, and skilled staff were left to seek opportunities in less volatile sectors. The industry was quick to look at recovery options, including domestic tourism, since May 2020,” she noted.

 Paetzold added that prior to Covid-19, the sector was among the biggest contributors to Namibia’s economy, representing some 11% of GDP, which in monetary terms is about N$22 billion. 

According to the CEO, some 120 000 people, or over 15% of the population, held direct or indirect employment in tourism, meaning the sector provides opportunities across the entire country and throughout all levels of society. 

Going forward, the sector will zoom in on opportunities to market Namibia’s “wide open spaces”. 

“Namibia’s tourism recovery strategic plan provides for five strategies, including policy issues, marketing, new target markets, improved market intelligence and data, as well as new accessibility and route development,” Paetzold continued.

2022-10-27  Maihapa Ndjavera

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