Kazenambo Kazenambo
11 April 2008
Windhoek — How do Namibian firms benefit from budget allocations? I'm raising these issues, because in my view, Namibian companies are being crowded out of the Namibian market by foreign companies who are awash with money, and some of them which are alleged to be enjoying some subsidies from their parent companies and governments of their country of origin.
And while I'm on this point, let me state that I'm not advancing this point from an influence of xenophobia or protectionism, but I'm voicing the concern shared by many struggling Namibian small and medium business men and women, and many workers of Namibia who are feeling the pinch - who are being suffocated by the domination of the Namibian market by foreign multi-nationals and other foreign firms which are taking bread from their mouths, and pushing them (Namibian firms) out of the market.
Some Namibian small and medium companies are increasingly feeling like orphans in the cutthroat competitive global business environment. Our business people are facing tough and unfair competition - on an almost daily basis in all sectors of the economy, therefore we need to start addressing the complex micro-economic bottlenecks and impediments that negatively impact on the expansion and diversification of our economy with the seriousness it deserves.
Not Know Where to Turn
Some business men and women, especially some owners of small and medium companies from across the 13 political regions of Namibia, are expressing concern that they are not receiving a friendly or welcoming reception from some of our public institutions, therefore they do not know where to turn to in order to raise their concerns. In some cases they are seen as troublemakers or complaining for the sake of complaining.
One knows and understands our passion and fixation on trying to attract foreign investors to invest in our market. One is also aware of many generous incentives which in many cases are offered to foreign investors, in some cases which are somewhat ruinous to our emerging economy, other than contributing to its reconstruction.
The Ramatex disaster, the Pidico saga, the Offshore Development Company (ODC) and Social Security financial scandals are some of the recent cases in point, and the list goes on.
The Green Scheme is another money-making (honeymoon scheme) in which some consultants are alleged to be milking (sucking and bleeding) empty our state coffers without showing any concrete results that make an equilibrium or break-even on the invested hundreds of millions of Namibian dollars of taxpayers' money that have been pumped into this project so far.
While one supports our efforts of promoting food security through projects such as the Green Scheme, one only cautions that well intended projects such as the Green Scheme should not turn into holed drums through which our limited financial resources are pumped or drained into wastage, such as the Ramatex case turned out to be to the shock and dismay of the entire nation.
The micro-economic environment in Namibia is increasingly getting harder and harder for the Namibian-owned small and medium businesses on the one hand, and for the workers on the other hand across the various sectors of our economy - from construction, retail, farming, etc.
It is a fact that in many cases, foreign firms which have entered the Namibian market, so-called big investors like Ramatex and Pidico, established themselves in the Namibian market primarily aided by lucrative incentives tantamount to seed capital which are rarely available for native Namibian companies.
Ramatex was given lots of incentives that ran into millions if not billions of Namibia dollars. Perhaps with the exception of companies exploiting business opportunities in finite extractive and sucking industries such as mining, fishing, etc. many companies such as those operating in sectors such as banking, insurance, law, information technology, pharmaceutical, real estate, car dealers, construction, retailing, etc. are principally dependant on Namibia's limited/scarce resources.
Many of these companies hardly bring money here, bringing rather their management cadres. All said and done, what many of these companies do (with the exception of a few) - they harvest and export money to their parent companies in their countries of origin.
Many of them do not invest in Namibia in terms of infrastructure development and expansion of their business operations in the rural areas and depressed parts of our urban centres.
Many of them do not contribute to any research and development (R&D) critical for the diversification of the Namibian economy.
To add insult to injury, only a few of these foreign firms are meaningfully contributing to transfer of skills in real terms. Many of the foreign and local family-owned firms benefiting from Namibian taxpayers' money are not interested in the economic empowerment of the Namibian people.
They are not opening up their shareholding structure for participation of local Namibians (particularly to blacks and women) as they are doing in countries like South Africa. Their business operations (organizational behaviour) here in Namibia are conducted as if they are operating in a neo-colonial or satellite banana republic.
If you can take a random snapshot survey, you will find that the top management structure, let alone the shareholding structure of foreign and local family-owned companies benefiting from huge lucrative government tenders, are run and dominated in the top and middle management structure mainly by foreign white men.
Majority local Namibians are only found at the bottom end of the company structure of these companies with no paths and hope for them to ever reach the middle or top end. This scenario is seen across all the sectors of our economy and calls for immediate remedial action from all stakeholders.
Insult is aggravated by what some of these foreign companies such as those in the banking and insurance sectors are now doing - creating hollow shells that are falsely packaged and presented to the Namibian public as this or that holding company, so-called this Namibia Bank Africa or that Namibia Insurance Africa.
This treasonable business nonsensical practice undermines the economic empowerment of Namibians - be it in terms of management skill transfer, etc - therefore one wonders why the Bank of Namibia condones it, more particularly in the financial sector? What Africa, and who is fooling who?
How can subsidiaries or branches of South African financial companies based in Namibia all of sudden become holding companies of the operations of their South African parent companies in running the business operations of those companies for the entire continent?
This scandal needs to be explained as many of us are neither convinced nor happy with this practice which appears to be designed to disempower Namibians from the real management of these private foreign firms operating in Namibia.
The present situation of free market entry and exit, and unregulated, ineffectively monitored or unevaluated behaviour and activities of some companies in this country are not in the best interest of our economic development.
We need to have some effective strategic public policy regulatory framework to deal with unfair competition in order to ensure fair competition in all sectors of our economy.
We also need to have these in place to ensure that consumers are well protected and that the Namibian market is not littered or dumped with hazardous and poor quality goods and services such as it is now the case in many of our economic sectors.
It is the duty of the authority to ensure that the citizens are not being disadvantaged by foreign firms entering or operating in the Namibian market.
We have to strictly monitor and evaluate the behaviour of companies with regard to their impact on the environment, their shareholding structure as to how they involve or empower local Namibians and their social responsibility in general.
The situation whereby the Namibian market is a free for all type of market place whereby Namibian small and medium firms are relegated into nothing and whereby market entry into the mainstream of the economy is almost zero for small and medium established companies owned by local Namibians should no longer be tolerated.
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