Namibia: Appetite for Entrepreneurship Grows

More and more Namibians are showing a taste for entrepreneurship as opposed to seeking employment.

A Business and Intellectual Property Authority (Bipa) update shows the registering body received 11 970 applications between 20 April and 20 July this year, but only managed to register 2 352 businesses.

Between 27 March and 30 June a total of 5 748 employees were retrenched by 388 employers.

Bipa indicated the authority serves between 200 and 300 clients daily at its head office in Windhoek, and on average it registered more than 1000 businesses a month.

It highlights that the offices at Swakopmund are also open for clients.

From 1 July 2019 to 30 June this year, Bipa registered 11 691 businesses, the bulk being CCs (7 442) and defensive names (3 287).

PANDEMIC IMPACT

The lockdown in April saw a significant drop in business registrations at the authority.

During April and May only 133 and 261 registrations were recorded, respectively.

The picture got rosier in June when 1 064 businesses were registered.

"This, however, stands in contrast to the 1 458 businesses that were registered in July 2019," the update shows.

Bipa indicated an increase in the number of business registrations for companies (Ptys) in December 2019, when 119 companies were registered.

Furthermore, business registrations for CCs spiked in October 2019 with 904 registrations, and again in March this year with 839 registrations.

BACKLOG

During the lockdown, the authority was forced to roll out its online services, despite the platform not being fully functional.

From April to July this year the authority processed 2 217 applications delivered to its office, and 135 online.

This is a total of 2 352 applications processed out of 11 970 submitted, leaving a massive backlog of potential entrepreneurs.

Bipa says the backlog was caused by "numerous system errors and power outages, which hampered the authority's ability to attend to applications and queries in a timely manner".

This led to Bipa announcing a three-week delay in processing for July.

The authority currently has a total of 187 064 active businesses registered on its system - 81% of these are CCs and 12,6% are companies.

Defensive names account for 5%, Section 21 companies (NGOs) for 1,1% and foreign companies for 0,2% of the total.

Bipa has also deregistered 198 businesses between January and March this year.

This includes 144 CCs, 50 companies, 3 Section 21 companies, and one foreign company.

As of 15 July, 145 requests for deregistration were still pending.

TURNAROUND TIME

Turnaround times for service delivery from January to March 2020 indicated that it took Section 21 companies on average 12 days to register and 11 days to obtain a founding statement; it took nine days to register a defensive name, eight to reserve a name for CCs and eight to reserve a company name.

The number of files requested by clients for amendments from 1 July 2019 to 30 June 2020 amounted to 98 114.

Currently it takes three days for files to be made available to clients.

The authority indicated it is currently in the process of transferring 175 106 physical files for CCs, Ptys, Section 21s, and foreign companies to its electronic system.

So far 36 462 files have been electronically captured and are available as soft copies.

Bipa says once all data and documents are uploaded online, it will significantly reduce turnaround times and permit the authority to distribute documents to its clients electronically.

According to the World Bank's study on the ease of doing business, entrepreneurs in a low-income economy typically spends around 50% of the country's per-capita income to launch a company, compared to just 4,2% for an entrepreneur in a high-income economy.

The global lender said governments in many economies adopt or maintain regulations that burden entrepreneurs.

As a result, entrepreneurs resort to informal activity, away from the oversight of regulators and tax collectors, seek opportunities abroad, or join the ranks of the unemployed.

The World Bank study indicated that foreign investors avoid economies that use regulations to manipulate the private sector, and according to Bipa, only seven out of the 11 691 registered businesses were foreign companies. Email: [email protected]

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