14 September 2012

Namibia: 'Industrial Strikes Scare Off Investors'

Rampant industrial strikes in the country are keeping away foreign investors, says a senior lecturer in the Economics Department of the University of Namibia (Unam).

A weeklong strike over wages recently silenced airwaves at the Namibian Broadcasting Corporation (NBC), while Agribank has since Monday endured a strike over wages. Workers at Air Namibia have also threatened to strike and there is a strike at a garment factory at Arandis, among many others.

"Who would want to go into a country where strikes are rampant?" asked Unam academic Dr Omu Kakujaha.

He said investors will risk losing production and profit, which is the essence of establishing any business worth its salt.

Although no indications have been presented of investors shying away due to strikes, Kakujaha emphasised that Namibian labour laws are very rigid and workers are overprotected.

"There is a possibility that investors could stay away," he said.

The economist pointed to the Global Competitiveness Index (GCI) by the World Economic Forum, which ranks Namibia at 92, down from 83 in 2011 and 74 in 2010.

He further gave the example of the rare platinum mining strike and unrest in South Africa, elaborating that companies would invest where profits would offset losses during bad times.

However, garment clothing factories and farm production investors would not invest in a country of unrest according to Kakujaha.

"If a country becomes ungovernable, investors cannot benefit, " he said, giving the example to Zimbabwe's farm invasions and that country's demands for majority shareholding in international companies.

"It starts with labour unrest and low productivity," he explained, adding that workers should be protected, but not overprotected.

Secretary General of the Namibian Employers' Federation (NEF), Tim Parkhouse, was in agreement with Kakujaha, pointing out that a potential investor would not only look at labour but also infrastructure and political stability.

"But labour is critical in the business scenario," stressed Parkhouse, adding that Namibia's ranking has been drastically dropping in various international business rankings.

He added that the environment in Namibia is not conducive for employment creation and mentioned the Employment Services Act, which according to him is too restrictive on the employer. In addition, Parkhouse cautioned that Namibia would never know of a potential investor who looks at these rankings and never comes to the country due to the rankings.

"If it were not for the mining industry, where would Namibia be?" he asked.

"What other retail stores other than South African are in Namibia? Why has the margarine company in Omaruru closed down?" he asked.

Parkhouse admitted that small businesses exist in the country, but he expressed the need for Namibia to attract large investors, similar to the closed down Ramatex factory.

"The government should listen to the private sector if credible arguments are given," advised Kakujaha, adding that the government went wrong in aligning all labour unions to the ruling party.

He accused government of overlooking credible Namibian Employers' Federation (NEF) guidelines.

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