THE Cabinet last week approved the recommendations of Namibia's business-rescue task force, which includes the establishment of a fund and financing capital projects through public-private partnerships (PPPs).
According to recent Cabinet directives, the implementation of these recommendations were approved in line with outlined timelines.
The task force, chaired by Thinus Prinsloo, in April this year suggested that the government accelerate PPPs and joint ventures to address delayed capital projects because of the government's limited funding capacity.
Last year a PPP committee said it caters for long-term projects, which involve operating and maintaining credible, well-prepared projects.
This, the committee said, can be rolled over to the market, and the identification and rigorous preparation of proposed projects is essential to success. Some challenges include that the act is not well understood, and that it overlaps with existing regulations in respect of local authorities' laws, requiring clarification.
The committee also proposed relaxing the strict application of the PPP Act and process to certain projects, and issuing clear directives regarding other regulations with an impact on the act, such as regulations about joint ventures at local authorities.
The task force recommended that the government needs to establish a business-rescue fund with a blended funding structure comprising the government, international investors and the private sector.
"The benefits of funding recommendations are to provide bridging finance for businesses in distress to protect jobs. The same principle applies to commercial state-owned enterprises (SOEs) to reduce the burden on state funds," Prinsloo said.
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He said the task force engaged with key stakeholders around immediate relief measures to benefit the economy and specifically small and medium enterprises (SMEs) in the short term - some of which have already been implemented.
Part of the recommendations they made is for Covid-19 relief to be reviewed in terms of realistic criteria, reframed and reissued.
The benefits of these recommendations are immediate cash-flow relief due to environmental or uncontrollable stress, and creating a more favourable trading environment to allow businesses to recover.
A recommendation in business-rescue capacity and ethics is to allow work permits to bring in qualifying business-rescue practitioner candidates from other countries. It was also recommended that the Business and Intellectual Property Authority take on the responsibility of regulation and that it be resourced accordingly. "It is important for one or more professional bodies to be established or linked with existing professional bodies to oversee, among others, the accreditation, qualification, and code of conduct of business-rescue practitioners," the presentation read.
Between January 2020 and February 2021 some 815 registered companies and close corporations voluntarily deregistered.
The task force, with 11 members comprising lawyers and bankers, was then tasked to review business and insolvency legislation, laws, regulations and policies. The primary objective was to be able to limit the number of jobs lost as a result of retrenchments, and to safeguard a stronger entrepreneurial culture in Namibia.
