EAN in the news

Central Procurement Board must prioritise local businesses to create jobs


30 Apr 2019

WINDHOEK – It is imperative that financial resources allocated in the national budget circulate in the domestic economy, as more money spent locally will have a greater impact on economic growth and job creation. This is according to a local economist, Klaus Schade, who feels the Central Procurement Board has to ensure that preference is given to domestic businesses.

Responding to questions from New Era, Schade noted that it is also necessary to speed up the implementation of programmes and projects in order to inject money into the economy as soon as possible to contain business closures and job losses.

“The allocation to the capital budget as well as to ‘materials and supply’ has been increased. To what extent this is going to support the domestic economy and create jobs, depends on the allocation of tenders. If Namibian companies are the beneficiaries of these tenders and if Namibian goods and services are sourced, whether directly or through government institutions or by Namibian companies that win the tenders, then it should have positive impacts on economic growth and job creation and result in further spin-offs for other sectors (multiplier effect). However, if foreign companies are awarded the tenders and goods and services (including labour) are sourced abroad then the impact on the Namibian economy and the labour market will be much lower. In this case, we might see more businesses closing and more professionals leaving the country,” said Schade.

According to the Namibia Statistics Agency, more than 48 000 new jobs were created nationally in 2018, with the greatest contribution coming from the agricultural sector, which saw modest recovery during the 2017 rainy season. Regrettably, recurring drought threatens to reverse these gains. 

In March this year, President Hage Geingob appointed a ‘High-Level Panel on the Namibian Economy’, tasked to identify opportunities for economic recovery and mass employment creation by leveraging private sector capital. An immediate deliverable for this eminent panel will be to coordinate the hosting of a one-day Economic Growth Summit in July 2019.   “We heard the cry of the youth for improved access to finance and have supplemented the plethora of micro-small and medium enterprise (MSME) funding instruments, with a Venture Capital Fund, a Credit Guarantee Scheme, the skills-based lending facility and training and mentorship programmes including EMPRETEC (Spanish acronym for entrepreneurship and technology); to respond to your greater aspiration for self-employment,” said Geingob during his most recent State of the Nation Address (SONA).   

Also during the SONA on April 17, Geingob noted that 121 regional youth enterprises have been identified, registered and are in the process of business planning, to secure seed capital and commence operations. In addition, the Student Entrepreneurship Programme trained 141 graduates and both programmes are supported with mentorship and coaching, to ensure growth, sustainability and gainful employment. 

Minister of Finance, Calle Schlettwein has also stated that the 2019/20 national budget seeks to strengthen macroeconomic stability, regain economic growth with jobs and fiscal sustainability. On numerous occasions, Schlettwein has stated that interventions to support broad-based economic growth, youth employment and self-employment are a priority consideration in this budget.
“The developmental opportunities presented by the public procurement law must be greatly enabled and implemented. To this effect, I have issued exclusive bidding directives to designated products north of the cordon fence, as regulations for the economy at large are being finalised,” said Schlettwein.