13 March 2018

Namibia: Govt Must Be Serious With SME Funding - NCCI

Government must provide enough financial support to small and medium enterprises because they provide more job opportunities.

This was said by Leonard Kamwi - who is the head of research and advocacy at the Namibia Chamber of Commerce and Industry (NCCI) - on Friday during a breakfast meeting held at parliament at which the private sector, civil society and youth representatives presented their views on the national budget.

During the event, Kamwi said the money allocated to provide financial support to the SMEs was too little, and could only be "sufficient to fund one big SME".

Finance minister Calle Schlettwein announced last week that about N$124 million was earmarked to be transferred to the Development Bank of Namibia over the Medium-Term Expenditure Framework (MTEF) to support the implementation of the SME financing strategy.

This is equivalent to about N$41 million of financial support to SMEs per year over a three-year period.

Kamwi stated that the budget allocated for this cause "is very small, compared to about N$4 billion allocated to state-owned enterprises".

He added that SMEs are very crucial in economic transformation because they provide more job opportunities, and if they thrive, they can be a major source of revenue for the country.

"In all material respects, the allocation that goes to the SME is perhaps sufficient only to support one business. If we are at that pace where we are only able to support many kapana businesses, but not reasonable businesses which can make a difference in the structure of the economy, we are not doing justice to our economy," he reiterated.

Kamwi then proposed that government needs to provide at least N$5 billion to support SMEs, "if we want to transform our economy".

"We request that government must at least provide about N$5 billion next year towards SME financing. Even if it is over a five- year period or the MTEF, that is the structural transformation we are looking for," Kamwi said.

Kamwi also raised concerns over the ever-increasing budget allocated to the ministry of defence. The defence ministry's budget was increased by 4% this year, from N$5,6 billion to N$6 billion.

"One wonders in times of peace whether we cannot deploy our military personnel to do policing work. That immediately reduces the need to expand our police force," he reasoned.

He added that government also needs to transform the public health sector to save money from the medical schemes and accommodate the private sector.

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