This week, a lot of international attention has been focused
on the formerly developed nation of Greece. Greece: A country in a common
monetary area, with a much smaller GDP than the leaders in the CMA, populated
by a people who consider tax evasion a national sport. But that description
could easily be applied to Namibia as well.
After all, Namibia is in a common monetary area, with
Swaziland, Lesotho and South Africa. And the South African GDP of US$ 350
billion certainly dwarfs Namibia’s GDP of US$ 13 billion. And Namibians
certainly seems reluctant to pay their share of taxes – with about 560
taxpayers out of over 500 000 (or 0.1%) of taxpayers paying 55% of the
government’s tax revenue.
And similar to Greece, Namibia’s growth has been limited by
a downward trend in what is commonly known as ‘Total Factor Productivity.’ Based
on the name alone, people have been quick to assume that this means ‘lazy.’ Yet
when you take a look at the numbers, it is obvious that this is not the case.
The average Greek, for example, worked 2 042 hours per year in 2014, compared
to the average German, who worked only 1 372 per year.
Total Factor Productivity is what is called in economic
terms a Solow Residual. This makes the factor intangible and thus not
measurable directly. In essence, this is the unexplained difference between
growth explained by capital & labour, and actual growth. In fact, this is the
contribution of labour efficiency and innovation in the economy, inter alia.
And when the data is examined, that problem is evident in
the Greek economy. At only US$ 36 of labour productivity per hour, this
scarcely compares with Germany’s US$ 64 per hour, and Luxembourg’s US$ 93 per
hour. Portugal’s US$ 34 per hour does not bode well for its future in the
Eurozone either. Namibia, similarly, seems to find itself in the grip of a
constant skills shortage in its labour pool, resulting in the drag evident in
Total Factor Productivity.
But in other ways, Namibia is much better off than Greece.
Their major problem at the moment is debt repayment – and with Debt to GDP of
about 150%, they are heavily indebted. In contrast, Namibia’s Debt to GDP ratio
just edged over 30%. Per person this compares favourably as well, with Namibia
at US$ 2 658 public debt per person, compared to Greece’s US$ 22 873 per
person.
And while we’re in a common monetary area, this has been
achieved with an exchange rate peg. Namibia (via the Bank of Namibia) maintains
its own currency, sets its own interest rates, and manages its own monetary
policy, independently on the Reserve Bank of South Africa, while Greece remains
at the mercy of the European Central Bank.
But that does not mean Namibia is free and clear. With
submissions for individual income tax having just been completed, tax should
still be on the minds of most of the populace. And for a population that
managed to elect a government with an 80% majority, as a people, we seem
mightily reluctant to fund it and enable it to fulfill its mandates.
The Greek situation with regards to tax evasion is clear; during
their occupation by the Ottoman Empire, tax resistance became a form of
protest, and hence a kind of patriotism. This culture has pervaded Greece, and
now threatens to destroy it. Beware of Greeks bearing gifts, indeed.
But Namibia does not need to follow the same path. The
country is 25 years old, freshly emboldened with a new government. Our country
is out of its teens – and as our election results have shown, we have no need
of a teen’s rebelliousness. If we all pay our dues, and work together, Namibia
can increase its skilled workforce, foster innovation and become the model for
African growth we know it can be. It all comes down to being responsible.
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