Windhoek — President Hage Geingob has reminded of the need for Namibian entrepreneurs to diversify their business models, especially for many of those whose business depends on public works. Geingob made the remarks while reflecting on the economic hardship experienced during 2017, when "we took difficult decisions to effect some of the deepest expenditure cuts since Independence."
"To some extent, the expenditure control hurt our economy and hurt businesses, especially those who largely dependent on government contracts," said Geingob at the opening of the first Cabinet meeting of the year, yesterday.
To alleviate the plight of the construction and SME sectors, government resolved to pay all outstanding invoices for the fiscal year 2016/17 by July 2017. However, by September, government fiscus was again under pressure with new outstanding invoices worth billions of dollars, owed to contractors and suppliers. Some school hostels were nearly closed because government had not paid the suppliers of food to hostels and students almost failed to write their examinations because the students' financial assistance fund did not pay universities.
As a result, Government had to allocate an additional N$4.1 billion to the ministries to, partly, to pay the outstanding debts, during the Mid-Term Budget Review tabled in November.
Yesterday Geingob commented that, "As Government reflects on how to ensure a diverse and inclusive growth model, based on fiscal prudence and sustainability to weather turbulent economic storms, I am of the view that there is need for entrepreneurs in our country to diversify their business models."
"Stronger economic fundamentals, and visible 'green shots' should not lead to complacency and return to unsustainable spending habits. One thing that is certain is that economic crises are cyclical and recurring," he said.
He reiterated the need to ensure Namibia's economic fundamentals are resilient to successfully weather future independent intervening variables.
"Key to this would be, to safeguard the fiscal sovereignty through eliminating or at least reducing wasteful expenditure, avoiding expensive debt uptake and building a sufficient fiscal and reserve buffer, to be able to intervene in the event of the unforeseen," Geingob said.