The coronavirus pandemic presents new and unprecedented challenges to the world. First and foremost, it is a public health crisis that impedes our society and our economy to function, as usual, due to the necessary social distancing required for the health of us all. The coronavirus has, thus, affected most of the economic sectors for our economies, resulting in a reduction in the production of good and services.
The Namibian economy has, in the past, experienced a high rate of unemployment – and as such, the unemployment situation has now worsened as a result of the retrenchment of employees by their employers being brought forth by the coronavirus. Further, unemployment has negative consequences on any economy, such as depression among individuals, due to a loss of income and an increase in poverty, which may increase criminal activities. All of these consequences also harm the potential growth/recovery of our economy. As such, both individuals and/or private sectors should meet our government halfway in fighting against unemployment within our economy.
One of the reasons why financial institutions are currently experiencing a higher default risk from the consumers of the financial services industry could be a result of the individuals who have been retrenched and never had credit insurance policies that could payout in the event of default. It is essential to understand a credit insurance policy is an insurance policy taken out through the insurance company and it normally pays out in a case of default caused especially by retrenchment.
Those who were retrenched and/or lost their income due to the coronavirus also suffered due to the repossession of their assets despite numerous reductions in the repo rate by the central bank during the current year.
Overall, the Namibian government has, thus far, done very well to fight against the virus, however as a nation, we must continue to adhere to the measures that are put in place by our lawmakers to ensure the virus does not continue spreading, thereby further impacting the economic activities in our country, which may impede the potential recovery for our economy.
In my view, individuals shouldn’t only be job seekers but should rather find ways to create self-employment opportunities. We need to be innovative and build a sustainable economy that can create job opportunities. Further, following the reduction in the repo rate, the consumers of the financial services industry should borrow and spend wisely and above all save for future consumption.