Diversify faster – !Gawaxab
The MD of Old Mutual’s Africa Operations, Johannes !Gawaxab has called for an accelerated diversification of African economies as growth driven by the extractive sector is unsustainable given the finite nature of extractive resources.
!Gawaxab, who was one of few Namibians that attended the recently ended World Economic Forum on Africa which was held in Cape Town, South Africa, said economic diversification should include development of such sectors as financial services, transport, communication, agriculture and trade as they have proved important in adding value, creating jobs and contributing to economic growth.
He said: “Financial market development is important to improve our competitiveness as a continent. However, most countries lack scale and additionally need to improve the rule of law, enhance policy and regulatory certainty and predictability, promote innovation and engineer new models and paradigms for financial services to be a catalyst for growth. Financial services in this regard refers to savings, credit, payments and insurance.”
The Old Mutual supremo said the way the country mobilises domestic savings for local investment requires a major re-think.
“For the financial sector to contribute towards transformational economic growth, we need to complement the shareholder return objective with financial inclusion which talks to the AUQ principle – access, usage (make it easy and affordable for the user) and quality (consumer protection and financial literacy).
“It also requires flexibility on the part of regulators on proposed international conventions such as Know Your Customer (KYC), Basel 3 and Solvency 2. We need to make these fit for Namibia and not necessarily apply all the onerous requirements as received wisdom,” said !Gawaxab.
He opines that if Namibia’s financial sector is to become a catalyst for our competitiveness, the country has to inculcate a culture of innovation in the financial services sector.
“Key interventions in this regard could include requiring Telco’s to lead with some payment systems, simplifying the system for new market entrants, promoting the convergence of the savings and credit systems – which are currently disconnected – and liberalising some regulations to be fit for Namibia.”
Meanwhile, !Gawaxab said a deep-rooted and persistent infrastructure deficit is a major impediment to economic growth on the continent. He said even though the jury is still out on whether TIPEEG will eventually deliver on its promises, the focus that it puts on infrastructure development is spot on as poor infrastructure retards development.
He, however, called for innovative thinking in fighting inequality, unemployment and poverty, the biggest and most immediate threats facing Namibia.
“To create jobs, we are focusing on infrastructure development amongst other interventions. We have to think differently to solve these challenges. Towards this end, the question should be asked whether we should not use our army to help with accelerating the delivery of infrastructure – as the Romans used to do in the olden days – whilst retaining the command structures intact.”
!Gawaxab believes that Namibia should, through Private Public Partnerships, consider implementing strategies to reduce the time it takes to deliver infrastructure projects. He said he private sector can play a major role in the delivery and modernisation of infrastructure in affordable ways.
“We can accelerate infrastructure delivery by tapping into the private sector’s financial resources and skills. It is time to truly implement the concept of public-private partnerships for accelerated development of our country.”