Windhoek — The Construction Industries Federation (CIF) says government's pledge to pay outstanding invoices by the end of August means the construction industry will be able to meet their financial obligations, which will keep many businesses from going under.
However, while the payment will bring much-needed relief to the industry, some businesses have had to close down while waiting for payment. "Payments of outstanding debts by government will mean that our industry in turn can meet their financial obligations, which for many businesses is critical to securing continued operation.
So, not doubt, it will be of great relief for them. However, unfortunately, some businesses will not have been able to hold out for that long," said Bärbel Kirchner, consulting general manager at CIF. Responding to questions from New Era, Kirchner said she knows that government is totally committed to pay service providers as soon as it is possible.
"We are very grateful for the Ministry of Finance's continued focus on finding solutions, despite difficult economic circumstances. We regularly engage with the Ministry of Finance. We have also engaged with the industry, in particular our members since September 2016 about the impact on consolidation of government expenditure on our industry and to be regularly updated about outstanding payments," said Kirchner.
She noted that information of respective outstanding invoices was sent to all relevant authorities with copies sent to the Ministry of Finance. "So, we hope that it will mean that our contractors indeed will be paid soon, so that in turn the money can flow into the chain - and subcontractors and manufacturers and suppliers of building material can receive payment too," Kirchner added.
She continued that it is important that Namibia's policy space evolves rapidly to facilitate the ease of doing business and increase the confidence of investors.
"Only with new investments into capital projects and infrastructure developments, businesses in our industry can operate at optimal levels, or indeed keep going. This would have great positive implications for maintaining capacity in our industry and once again increase the level of employment in our industry.
" We know that the current scope for new work is not as promising, however are hopeful that through strategic financing agreements, we can make big strides forward," she said.
Government recently pledged to fully settle outstanding invoices of state contractors totalling more than N$3 billion by the end of August. The payment of outstanding invoices is expected to provide much-needed momentum to the ongoing economic recovery.
President Hage Geingob has expressed deep regret over the accumulation of unsettled invoices that resulted mainly from weak revenue collection and emphasised that government is aware of the serious impact the outstanding invoices have had on business operations, particularly for small and medium-sized enterprises.
During the recent announcement at State House, President Geingob said government has realised that one key factor fuelling discontent is the occurrence of unsettled invoices.