Too Many Pinkies In The Pie

Originally published in the Informanté newspaper on Thursday, 4 August, 2016.

This week, the New Equitable Economic Empowerment Framework (NEEEF) once again made waves in the Namibian news. The draft NEEEF Bill seems to be a bit opposed to the objectives of NEEEF, in that it nowhere seems to aim to create ‘vehicles for empowerment,’ nor does it seem to be ‘Actively guarding against the repugnant tendencies of window-dressing, favoritism, nepotism and self-enrichment,’ and instead of ‘Removing barriers of socio-economic advancement in order to enable previously disadvantaged persons to access productive assets and opportunities of empowerment,’ it seems to be rather erecting barriers.

It also does not seem to slot in well with the Government’s Harambee Prosperity Plan, which aims to lift all Namibians into prosperity based on an inclusive Namibian House, united in its cause. With our Namibian fight against poverty, it seems we sometimes lose sight of our real goal, and we rather seek to address its symptoms. 

There are, of course, several policies one can implement to alleviate poverty, but none of them work without economic growth. It is often said that economic growth will alleviate poverty, but this is not strictly true for economic growth alone – it will only alleviate poverty if the lowest wages rise faster than the average wage, and if benefits and pensions are kept in line with average wage increases. Economic growth, however, creates new job opportunities, and that is how poverty gets alleviated. It is quite well known that the biggest cause of poverty is in fact unemployment! But the NEEEF proposal does naught to increase our available jobs in Namibia – it simply seeks to redistribute the available jobs. Now you’ll have unproven decision makers heading up our existing institutions, which surely cannot bode well for their performance. 

Perhaps our government needs to take a look elsewhere – at the reasons why we are struggling to create jobs. This, as it turns out, was not a difficult exercise for me, as the World Bank regularly publishes these types of analyses. In its Doing Business 2016 report on Namibia, we came under the spotlight, and it was not good. Out of 189 countries, Namibia came 101^st on its ease of doing business.

In particular, there are several sub-sections where Namibia should mightily improve if we want our Harambee Prosperity Plan to work. In terms of tackling unemployment, perhaps the most important of these would be the ease with which one can start a new business. Namibia ranked 164^th out of 189 countries. 

To start a new business, there are 10 procedures that need to be followed, which takes 66 days. Compare that to New Zealand, the best, where there is only a single procedure that needs to be followed, and it takes but half a day to register a business. Would it not be better for Namibia’s unemployment if this wall were not in front of every entrepreneur that wished to enter the economy?

Registering a property takes 8 procedures, and 52 days – placing us 174^th out of 189 countries. It also on average costs 13.7% of the property’s value. With the world leaders having only a single property procedure taking a single day, and with it costing zero in Saudi Arabia, is it any wonder we’re complaining about land provision when it takes this long and costs so much simply to register it?

To simply pay a company’s taxes requires 27 payments a year, and requires 302 hours of work to complete. While this only makes us 93^rd in the world, that still means a new entrepreneur needs to work almost two months of a year just on his taxes! This is time not spent building his business!

For trading across borders, I came across an even more startling statistic, which could explain why the Bank of Namibia is constantly warning our citizens that our imports exceed our exports. In order to export from Namibia, it requires 120 hours to ensure border compliance, or two working weeks. It requires an additional 90 hours to ensure the documentation is completed for that export. So approximately 26 working days is required to export from Namibia. Now compare that to the 6 hours required to ensure goods are compliant to import, with only 3 hours required for import documentation. 

And to enforce a contract here in Namibia, it takes 460 days to be heard by the court (only 150 days in Singapore), while it would cost 35.8% of the claim (9% in Iceland). There are several more statistics that relate to the ease of doing business that increase our score compared to these, like Getting Credit (59^th), Getting Electricity (76^th), Dealing with construction permits (66^th) and Protecting Minority Investors (66^th). 

If we as a nation wish to alleviate poverty and unemployment, it seems clear where we should start. The NEEEF does not seem to take us on that path, but it is still under consultation, and with the proper input, perhaps we can steer it to solve our embedded problems, instead of simply shifting the problems to another section of our economic pie. 

I know that we as a nation want to do all that we can. We want to make a contribution – we want to be a part of the plan. Our destiny seems uncertain, and that can be hard to take, but our path will become much clearer with every new choice we make. Patience is never easy; we can all understand wanting more. But we also know how hard it is to wait, as a nation, to spread out our wings and soar. But we are here for a reason – as a nation, we are gifted, and we are strong. We know we belong here, and we’ll solve our problems. Our time is coming soon. As the sun rises, so does the moon. As love finds a place in every heart, we are a nation. We’ll play our part.