The Brief: A monthly wrap-up of News Worth Knowing

Namibia's MSMES Contributes 12% to GDP

Vice President Netumbo Nandi-Ndaitwah said that 15,000 micro, small and medium enterprises (MSMEs) are registered in the country, contributing approximately 12% to the gross domestic product (GDP).

She highlighted that in 2021, African startups attracted N$9.2 billion (US$5.2 billion) in venture capital, and the continent now boasted five unicorn companies—firms valued at over N$18 billion (US$1 billion).

Nandi-Ndaitwah further explained that it was necessary to establish frameworks to formalise the sector without overregulating it.

“Our young entrepreneurs possess the energy, creativity and drive to not only catch up but to position Africa as a global leader in innovation and growth. As we work towards the emergence of thousands of African unicorns, now is the time for all entrepreneurs to aspire to grow beyond the startup and MSME phases,” she said.

Rural Development Programme Creates 600 Jobs

The Ministry of Urban and Rural Development says its Food and Cash for Work (FCFW) programme, implemented under the National Rural Development Policy (NRDP), has created over 600 temporary jobs in rural Namibia.

The programme provides food and occasional cash payments to unemployed adults who work on local development projects. These projects include poultry and livestock farming, vegetable growing, classroom and bridge construction, earth dams and debuting.

The minister, Erastus Uutoni, acknowledged the support from development partners and the private sector.

“We must avoid working in silos and should pull in the same direction where we plan and execute our activities in an integrated manner. Resources are hard to come by nowadays, and we must prioritise and optimally use the limited resources at our disposal and do more with less. For what is entrusted to us, there must be full and collective accountability,” Uutoni said.

Debit Orders To And From South Africa To Cease – BoN

Effective from 30 September 2024, debit order payments to and from South Africa will no longer be permitted under Namibia’s new electronic fund transfer (EFT) regulations, according to the Bank of Namibia (BoN).

These regulations, outlined in the Determination on the Conduct of EFT Transactions (PSD-9) and the Directive on the Speed and User Fees and Charges of Common Monetary Area (CMA) Transactions (PSDIR-9), mark a significant shift in how domestic and cross-border transactions are processed.

BoN’s director for strategic communication and international relations, Kazembire Zemburuka, said the central bank’s new directive, PSDIR-9, aims to enhance the security and efficiency of cross-border payments.

He also explained that cross-border transactions between Namibia and other CMA countries, particularly South Africa, will be treated as international transactions and processed through the SWIFT network.

“Key changes include the treatment of cross-border EFT transactions within the CMA, which will now be conducted through the SWIFT network,” he said.

Namibia Has N$170 Billion Worth of Investment Projects in the Pipeline

The Namibia Investment Promotion and Development Board (NIPDB) says the country is spearheading investment projects valued at over N$170 billion.

NIPDB’s chairperson and chief executive officer, Nangula Nelulu Uaandja, highlighted the importance of efficient public sector processes and collaboration to accelerate the realisation of the investments and create jobs for Namibians.

“In just three years, Namibia has attracted a total of approximately N$73 billion in foreign direct investment, N$33 billion of which came from the oil and gas industries. The remaining N$40 billion stems from various sectors, including mining, agriculture and industrialisation, reflecting the changes we are seeing in Namibia’s investment climate,” said Uaandja.

She also said that the collaboration between NIPDB, the government and other stakeholders continues to send a positive message globally that Namibia is an attractive destination for investment.

Trade Ministry Plans Streamlining Procurement To Support MSMES

According to the Deputy Executive Director in the Ministry of Industrialisation and Trade, Michael Humavindu, the Ministry is working to create a more accessible and supportive environment for MSMEs within the public procurement system.“ The public procurement rules need to be streamlined and simplified to allow MSMEs easier access. This includes reviewing tender fees and related costs to ensure they do not create unnecessary burdens for smaller businesses, giving them a fair chance to participate,” he said at a Standard Bank Namibia networking event.

Humavindu emphasised that preserving local participation in public procurement would boost the competitiveness of domestic businesses and stimulate economic growth. “One of our key priorities is reducing the interest rates on loans available to MSMEs. This was mandated by the Cabinet directive in February 2024, and by next year, we plan to report back with solutions. We want to present these solutions to the Treasury for inclusion in the next financial budget cycle,” Humavindu explained.

Humavindu also highlighted the need for collaboration with commercial banks to finance MSMEs, emphasising that expanding finance options beyond the Development Bank of Namibia (DBN) is critical. “We are working to expand MSME financing beyond DBN. The involvement of commercial banks is crucial in this regard, allowing for a broader financing scope. This is a collective effort, and we need commercial banks to collaborate with us to bring contract financing solutions beyond DBN,” Humavindu added.

Humavindu further highlighted the importance of addressing conditions attached to donor funding, which sometimes conflict with Namibia’s strategic objectives. He reiterated the need to review these conditions to ensure that public procurement opportunities are aligned with national development goals, particularly in reserving tenders for Namibians.

“A lot of work lies ahead, but we are committed to collaborating with all stakeholders to ensure the success of these initiatives. Together, we can create an environment where MSMEs can thrive and meaningfully contribute to the economy,” Humavindu said.