14 December 2012

Namibia: The Selling of the Country


THE Ministry of Fisheries and Marine Resources has once again opted for the short-sighted part of the adage "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime".

It appears the lesson was not learnt in 2000 when then Minister Abraham Iyambo arranged shotgun marriages in the fishing industry by grouping a myriad of piranha-like individuals whose aim was to extract maximum and short-term benefits from the industry. Then Iyambo removed fishing rights from established industry players and sliced up quotas in small portions in the name of 'Namibianisation'. It took a while for him to learn the tough lesson, by which time a lot of jobs had been lost and the industry struggled.

Fast forward to 2011 and the new minister, Bernhardt Esau, has repeated the same thing - in the name of black economic empowerment, he has carved up fishing rights and awarded quotas to a broad range of smaller groups.

The pattern is the same as then: these groups are nothing but rent-seekers, who now make personal use of the state resources allocated to them to empower and increase ownership of Namibians in the fishing business. They dangle the papers of fishing rights and quotas before the highest bidders [who turn out to be foreign companies] for between N$16 million and N$24 million; these foreign companies trawl out the fish from the ocean as quickly as possible and sell it off just as fast to get what they want.

Those few Namibians who received millions for selling the quotas run off spending like there is no tomorrow, and repeat the process for the next seven to 10 years when they have to reapply for the largesse.

Not only are Namibians left with no control over the fishing industry, once again, but the cost the country pays simply continues to rise. The foreign companies that buy the quotas like at an auction most likely do not pay taxes and other levies. The Namibian reported this week how a Chinese company employed casual workers, despite the practice having been outlawed, and did not even pay them all their dues amid allegations from trade unions that the workers operated under poor working conditions. In short, the result of the ministry's warped empowerment exercise may well be fewer jobs with low pay or a diminished buying power of the workers.

Long-term players in the industry even estimated that the tax coffers may have lost more than N$150 million in taxes and levies because of the reduction of quotas to existing Namibian registered vessels and the appearance of foreign trawlers in Namibian waters.

The long-term damage to an investor for having the predictability and measurements upset at the whim of a minister is huge.

In addition, the minister of fisheries appears to have have encouraged lawlessness by giving non-registered companies fishing rights in the name of BEE. How, for instance, could companies declare 'dividends' before any productive business had been undertaken? Were books audited before dividends were paid to the paper-quota holders? Were the right taxes and levies paid into state coffers?

The haste with which all this has happened suggests the answers would be to the detriment of the long-term growth of Namibia.

The fishing industry is a major backbone of our economy, the second highest export earner of foreign currency after mining. It employ tens of thousands of workers, with a contribution to the Gross Domestic Product (GDP) of about N$3,9 billion last year.

Allocating fishing rights and quotas is an important but small first step in having Namibian ownership.

Empowerment requires people to get involved by gaining skills and know-how; Namibia must employ other Namibians, operate fishing vessels and manage the production from start to finish if the aim is to change the status quo. Foreign vessels will always bring their own crews after the rent-seekers have sold them the quotas.

And we wonder why Namibia tops the list of countries with a small portion of extremely rich people and a mass of poverty-stricken souls?

We propose a change of course to where adequate state-resources are allocated and properly monitored to ensure long-term sustainability and quality benefits to many, especially by those proving they invest rather than take cash out as fast as they can.

By now there should have been a sizeable number of indigenous owners in the industry who employ others massively and plan on remaining there rather than sell off to make a quick buck and then move on to exploit other state resources as seems to be the case.

This is no way to do business, build a country and retain wealth. Namibians must be encouraged to learn how to fish, and not to rely on quick cash.

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