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Opinion - Entrepreneurship a means to stimulate employment

2021-06-11  Reverend Jan Scholtz

Opinion - Entrepreneurship a means to stimulate employment

Jan's Corner

Entrepreneurship development is a known counter strategy to the growing problem of unemployment in any developing society, and this holds particularly true for Namibia.  As can be observed, there is saturation in the formal sector to accommodate the labour force. Entrepreneurship will, therefore, remain the only viable avenue out of poverty for many Namibians.

The Namibia Statistics Agency (NSA) last conducted a labour force survey in 2018, pegging the country’s official unemployment rate at 33.4%.  That meant more than 364 000 people were without jobs in 2018, 48.5% of them youth. The results of the 2018 Namibian Labour Force Survey show that more than half (57%) of the 725 742 employed people in the country are in the informal sector. Some early writings have estimated that the informal sector in Namibia provides employment to an estimated 150 000 people (Namibian Sun, August 2020).

According to the Namibian publication of 17 August 2020, between April and June 2020, around 2 035 individuals were looking for employment, but only 33 were placed. Of this number, 1 214 were women and 821 men. In light of the ongoing economic reforms, the informal sector has thus become a very important source of employment.  It continues to absorb most of the job losses in the formal sector. Therefore, the significance of the informal sector in the short to medium term is bound to grow, rather than diminish. But there are also numerous obstacles facing the informal sector that need urgent attention.

Given the gravity of the economic situation facing Namibia and the labour force trends, it is evident that we have to change our thinking on the issue of employment.  Employment in Namibia can no longer be thought of as denoting employer-employee relationship. The definition is inadequate in view of the significant numbers of people working in the informal sector.

Employment today is a process of generation wealth, provision of services and creation of wealth. It is the capacity of people to exercise their economic citizenship. If we understand employment in this broader sense, we can readily see that it is a problem.  Namibia suffers from insufficient entrepreneurship. Entrepreneurship is a spirit that motivates people to seize opportunities to create wealth. It is a skill that can be acquired and accumulated. In Namibia today, entrepreneurship must become the basis of employment.  

Entrepreneurship or the spirit of enterprise is in line with the government economic policy, designed to disengage the state from directly participating in the economy.  The government’s aim is to create an enabling environment in which the people, themselves, are the main actors in the economic arena as owners and operators of enterprises.

The potential of entrepreneurship as a source of livelihood for workers has now come to be widely appreciated. In the informal sector, entrepreneurship has been recognised to possess many advantages over large-scale enterprises in the formal sector. It does not require a huge amount of start-up capital. It is mainly based on the use of local low materials and technologies. It is labour intensive and does not demand highly specialised skills. More importantly in the current economic situation, it is less dependent in the vagaries of the international economic system.

The above characteristics of informal sector Entrepreneurship makes it a natural solution to Namibia’s current unemployment problem.Nevertheless, Entrepreneurship development in Namibia is still faced with a plethora of problems.  The informal sectors suffer from problems such as lack of venue/base from which they can operate.  Many budding entrepreneurs lack vocational and technical skills.  Access to bank credit is difficult due to high requirements set by the banks. In general, entrepreneurship development lacks institutional support from stakeholders (Namibian Sun, 2019).

Firstly, the ambiguous attitude to the informal sector has tended to retard the growth of entrepreneurship. To encourage entrepreneurship development in Namibia, it is important, therefore, to put in place a number of supportive measures. This would include sound training programs. Most of the training programs must prepare them for employment. Government ministries, such as trade, Namibia Investment Promotion Agency, youth, gender, labour, education and science and technology should work together to come up with training programs that prepare young people for self-employment.

Secondly, advice centres should be created to increase the awareness of prospective entrepreneurs, particularly young people, of available self-employment opportunities.  

Thirdly, youth and women’s accessibility to land should be made available and improved. For entrepreneurship to grow, there is a need for land where young people can operate from without fear.

In conclusion, although much has been done to accelerate the growth of entrepreneurship, we must continue to hold all relevant stakeholders accountable to remove the barriers that constrain the growth of small-scale enterprise development.  Much more efforts are needed to empower those in the informal sector to contribute to the social and economic development of the country, to ensure the attainment of National Development goals and the eradication of poverty.

To end, I quote the words of the great anti-apartheid revolutionary leader and South African statesman, Nelson Mandela: “Money won’t create success’; the freedom to make it will”.

2021-06-11  Reverend Jan Scholtz

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