Risking an open economy

Augetto Graig - Prominent local businessman Ben Hauwanga, chairperson of the Ongwediva branch of the Namibia Chamber of Commerce and Industry, says international monopolies benefit greatly in Namibia from globalisation, “coming in with lower prices and killing the local business people”.

“They are coming to destroy,” Hauwanga said.

Hauwanga made these statements as part of a panel put together to discuss globalisation, along with Karl-Stefan Altmann, Nedbank’s investment executive; Purvance Heuer, MD of Arysteq Asset Management; Annegret Müseler, the SME (small and medium enterprise) consultant at Deloitte; and moderated by Bruce Hansen, the MD of Simonis Storm.

Nedbank Namibia and Simonis Storm hosted their 2020 Investment Summit themed ‘Deglobalisation’ at the Safari Conference Centre in Windhoek on Wednesday.

“They are not well controlled by government and sometimes partner with higher officials or ministers,” Hauwanga said.

“The economy of Namibia is going down. Money is going down and most business people are suffering. The leaders see what is happening and they ignore it. There is no way you can build this country if some are paying VAT [value-added tax] and some are not,” he warned.

“Without full implementation of the laws by the ministry of trade and the ministry of finance, we will never succeed. This is very important. Some of our African leaders ignore the laws,” Hauwanga said.

Negotiating skills

“If we talk about bilateral agreements Namibia must be strong enough to negotiate. If there is ‘deglobalisation’ our trade agreements must be specific so that both parties benefit equally,” Altmann said.

Government is needed to influence negotiations and involve the private sector.

“We have created our own ‘deglobalisation’, for example our investment regulations. Bankers have funding but it is not invested,” Altmann said.

Heuer agreed: “It is more difficult to get capital into this country than to get it out. This also applies to the movement of labour and skills.”

However Heuer believes globalisation may have peaked anyway.

“These things happen regularly but on the long-term cycle. There is no direct correlation between asset markets and protectionist policies. What happens is a flight to safety,” he said.

“You have to get your domestic position right. Do you want to be part of the global community? If you don’t get your house in order, it is difficult to compete globally. Also, spend more time on getting SMEs to drive the economy,” was Heuer’s advice.

SMEs

Müseler said she had seen a spike in qualified people who don’t have jobs and want to start a business. She said starting a business in Namibia is intense and while there is capital available, it is often unattainable.

“SMEs struggle because they don’t understand. There is not enough awareness. In South Korea SMEs don’t pay tax for the first five years and neither do their employees. We also need to allow more capacity development,” she said.

Müseler said the Development Bank of Namibia (DBN) was trying, having introduced new products to enable young entrepreneurs and artisans, but the approval process was often lengthy. Meanwhile, “globalisation brings competition, and Namibia does not have the market [size],” she said.

Altmann said indebtedness and a lack of financial education leaves many Namibian SMEs unable to exploit the opportunities that exist.

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