20 June 2019

Namibia: SME Parks Construction On Track

Trade and industry minister Tjekero Tweya says the construction of small business parks countrywide is nearing completion in most of the towns.

The minister said this while briefing parliament on the progress of the construction of SME parks countrywide last week.

Tweya was responding to questions posed to him by the main opposition party on how the government was creating an environment for SME growth, and their efficient operations.

Finance minister Calle Schlettwein had said in his budget speech earlier this year that the budget would act as a stimulus package, centred on the increased magnitude of the development budget, to enhance resources allocation to the agricultural sector, the youth and for SME support.

Additionally, Tweya had said a total of N$110 million was earmarked for SME financing activities under the Development Bank of Namibia.

A further N$650 million was reallocated from non-core expenditure and transfers to public enterprises to support the provision of core goods and services, the financing of SME support facilities, as well as development budget expenditure.

Tweya said in the Kunene region, extension work to increase the SME booths and medium-sized enterprises' cubicles at the Opuwo business park were fully completed, with about 18 trading enterprises occupying the facility at the moment.

At the coast, bulk services were completed at the !Nara Namib industrial estate project at Walvis Bay, with only the sewer reticulation system left to be completed.

In the north-east, the Divundu industrial park and some of the bulk services were completed, while the Rundu thatch logistics centre was completed early this month, and is ready for commissioning.

In the central parts of the country, the construction of the Kalkrand business park was completed, and has been operational since 2017 with four enterprises.

Tweya noted that the construction of SME parks at Rosh Pinah, Luderitz, Oranjemund and Katima Mulilo were suspended before the actual work could begin due to a directive from treasury to prioritise capital projects for the financial periods from 2016 to 2018.

On future prospects, the minister said the Divundu business park, the !Nara Namib industrial estate, and the Tsumeb industrial plots are still open for further public-private partnership (PPP) sector development through any business model, such as build-operate-transfer.

Tweya also confirmed to The Namibian this week that the ministry will terminate the contracts of those who have been contracted to construct SME parks but are not performing, nor have completed the work as stipulated in their contracts.

To increase the occupancy rates at the centres and stimulate entrepreneurship, the Namibia Industrial Development Agency (Nida) will soon implement the revised lease fees structure to bring about affordability in the SME parks.

Nida will also ensure that the necessary steps are taken for the completion of projects, while supporting those contracted to mobilise private capital, and subcontracting special entities if needed to finalise the projects.

The agency will also consider the issuance of new payment guarantees to financial institutions to enable access to credit for the contractors.

The agency's management director, Uparura Kuvare, confirmed to The Namibian this week that the new fees structure will be rolled out next month all over the country to all their 148 facilities.

Deputy executive director in the ministry of trade and industry, Michael Humavindu, said the budget cuts really had a noticeable impact on the completion of the SME parks around the country.

"The budget cuts are stopping ongoing projects, forcing us to only complete a few. A lot of the projects were stalled," he stated.

The ministry had to prioritise which projects from the eight they would halt, and which are to be completed in the current financial year.

Humavindu added that for the current financial period, they have been allocated N$53 million for the construction and maintenance of industrial parks.

They are thus busy considering a PPP for the Kavango cattle tannery and the Tsumeb industrial plots, to follow the northern tannery, which is in the market already on PPP offers.

Earlier this year, the ministry of finance said a directive will be given to complement the Procurement Act to practise exclusive bidding to benefit SMEs in tendering.

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