Growth will not be achieved through social grants – Thieme
Windhoek, 07 March. Executive Chairman of the Ohlthaver & List Group. Mr Sven Thieme this week expressed optimism over this years national budget saying the government’s direction in development financing must be supported by all stakeholders to expedite its execution. Thieme speaks on behalf of the private sector in his powerful role as president of the Namibia Chamber of Commerce and Industry.
Thieme stated that the Minister of Finance, Hon Calle Schlettwein’s call for ‘Growth At Home’ and the urgent need to develop a self-sustaining economy must be embraced by all, as socio-economic transformation could not be attained through social grants only but requires the development of sustainable industries. “Growth at Home has never been more needed than now as developing our own sustainable industries is imperative in protecting our economy against the impact of global and local factors, while creating employment and reducing poverty” he said.
Thieme emphasized that the impact of the current drought was amplified further by the effect of various exogenous factors such as the decrease in the oil price, which he coined a double edged sword. “While lower oil prices benefit the consumer at point of sale, and the transport sector at large, its negative impacts were felt in other sectors such as the domestic retail sector when the once-thriving Angolan shopper-base withdrew its local spend due to less cash in that oil-dependant economy” he said adding that the domestic ship repair and marine engineering industries were also impacted by oil price fluctuations.
He stressed that, had Namibia’s industrial sector been firmly established, the devaluation of the South African Rand would have dealt the local economy a softer blow. “While depreciation enhances competitiveness to the exporting sector, it has immediate effects on raising sovereign debt and debt servicing as well as a higher import bill and, consequently, inflationary costs. Currency depreciation will drive up the price level of imported goods in the coming months, which, when combined with drought-related food price increases, will lead to higher inflation. With a forex impact of 27% on the price of some packaging materials in just 5 months, and the current drought situation impacting food production and pricing, it is a sad reality that the ordinary man on the street will not be left unscathed.”
Thieme said that Namibia as an emerging market which largely consumes what it does not produce, is extremely vulnerable to externalities which is why ‘Growth at Home’ is the key to a self-sustaining and free economy. Expressing excitement at the national budget’s focus on economic growth and sustainable development, as well as poverty eradication, he stated that the necessary services need to be prioritized to effectively support this growth agenda, citing in particular water, energy, and rail service delivery. He underlined the importance of skills development, education and leadership in effecting the necessary change. “While there are certainly some tough times ahead, I am excited about the government’s rallying call to focus on poverty alleviation and job creation, and industrialization is certainly a key driver to achieving this. But if Namibians do not support local manufacturers, economies of scale cannot be achieved and we cannot become competitive.”
Concluding Thieme said that the Namibian nation does not have the luxury of time and that this has to be the year of “doing so that the foundations are put in place to build a prosperous nation as it is ultimately the poor who will suffer if we do not realize our responsibility to effect change.”