Africa Watch

Namibia: A neighbor in trouble

Hage Geingob
Hage_Geingob.jpg

Contrary to popular perception all is not as rosy in Namibia as most commentators believe, and the country is in an economic crisis.

While it is a challenge to keep track with all that is happening in South Africa as the noose tightens around the neck of President Jacob Zuma and the Guptas, and the blame shifting escalates as day zero bears down on the people of Cape Town when taps in the city will run dry, one tends to forget that circumstances could be worse elsewhere.    

It was Anton Rupert, the founder of the Rupert business empire, who once knowingly remarked, you cannot sleep comfortably while your neighbour goes hungry.

His words sprang to mind when reading an article that was carried by the German press under the caption,”Namibia: facing financial ruin”. Think about the consequences for South Africa if what is said about our neighbour, with whom we share close historical links, is true. 

The article kicks off with the observation that “A perfect storm of external events and domestic mismanagement has brought Namibia to its knees. “

Without full knowledge of the situation in Namibia it is impossible to say if conditions in the country are really as dire that it warrants such an ominous remark. But it comes rather as a nasty surprise for any person who believed that Namibia is one of the more stable and well governed countries in Africa.

President intervenes

That matters are not well and that the state coffers are under serious strain is undisputable, considering the fact that president Geingob has stopped using his private jet, and his office announced that he will use scheduled commercial flights when undertaking only essential foreign trips.

The president also issued an order stopping any minister, politician, and civil servant from travelling abroad until at least the end of February 2018.

In the meantime,the Namibian Defense Force (NDF) announced that it could no longer afford to pay the water and electricity bills for its military bases, or pay for food for its soldiers.

In a desperate attempt to cut costs the NDF has requested that soldiers who are currently on holiday do not report for duty while it is foreseen that thousands of army personnel will be forced to take paid leave next month.

Climate change

Already a water-scarce country, for Namibia climate change is causing havoc, and the drought across southern Africa - a result of the El Nino weather effect - has been disastrous for agriculture, a mainstay of the Namibian economy.

As part of what resembles a perfect storm, another pillar of the Namibian economy, the fishing industry, is imploding due to a severe decline in fish stocks – the result of years of overfishing for which illegal harvesting by foreign nations is partly to blame. The pilchard species, for example, has been so depleted that it may never recover. The Namibian government has set the pilchard quota from 2018 – 2020 at zero in an attempt to rebuild the disappearing numbers.

Adding to these woes, the mining industry, another important currency earner, as result of the consistently low price of minerals, particularly uranium, has also failed to provide a financial life line to the Namibian government.

Namibia’s close association with South Africa is also coming at a cost and Namibians could not be blamed if they join the chorus of South Africans disgusted by the shambles brought about by the inept and corrupt Zuma-Administration, and the refusal of his party to bring an end to his disgraceful conduct.

The Namibian dollar is pegged to the South African rand and with the South African currency having performed badly over the last few years, mainly because of the many disasters caused by the Zuma-Administration, the Namibian dollar has suffered as well.

Different picture

Closer scrutiny paints a picture somewhat different to the popular belief that Namibia is a well-run country. The voices blaming the government are becoming louder and fingers are pointed at unchecked corruption, and a public service rife with cases of embezzlement and wasted public spending.

President Geingob’s attempts at cutting back public expenditure by using commercial flights, and placing a moratorium on civil servants and politicians flying overseas, is scorned at and rejected as cheap grand standing.

In response reference is made to the fact that under his presidency there has been a marked expansion of ministers and deputy ministers and “special advisors,” adding substantially to increased expenditure. And,with an unsustainable public sector and civil servants (over 100000 civil servants in a country of only 2.2 million inhabitants) the government’s wage bill amounts to more than 50% of the annual budget.

As could be expected, the government dismissed these claims, and the minister of finance claimed that the government is being more prudent and efficient in its expenditure and is not 'broke' as purported.

With economists, the media, and the opposition arguing the opposite, the truth is most probably to be found somewhere between these two views. However, the fact remains that Namibia’s economy is under pressure and South Africa should take note that its neighbor is in financial trouble which suggests that contingency planning is needed.

by Grth Cilliers

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