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There is much potential economic damage hidden in uncontained civil unrest

There is much potential economic damage hidden in uncontained civil unrest

By Josef Kefas Sheehama.

Namibia is well known as a stable, democratic country, and is committed to stimulating economic growth and employment through foreign investment.

President Hage Geingob led a strong team to the 2022 World Economic Forum’s annual Davos meeting as Namibia seeks to ramp up international investment. Davos brings together business leaders, senior government officials and policymakers, and social change advocates to tackle the biggest issues of our times such as inequality, climate change, a sustainable economy, youth employment, underdevelopment and the global competitiveness of nations.

It brings minds together to respond to these challenges innovatively and creatively. Gatherings such as the World Economic Forum enable the formulation and implementation of such solutions. The NDPs and HPPs are part of our toolbox to fix the challenges of poverty, underdevelopment, inflation and unemployment. But Namibia is competing with other countries where there is a haven of investment opportunities for global investors. The Namibian team should understand that they are selling the country as a preferred investment destination in Africa and also an important gateway for markets and other business opportunities throughout the continent.

Foreign Direct Investment (FDI) tend to flock to regions and states where there is political stability. Further, businesses like to operate in an environment that is not marred by frequent strikes, social unrest, and chaos as their operations would be hit adversely due to these factors.

Namibia has been enjoying uninterrupted democratic governance which presupposes political stability yet the growth of the economy seems illusionary. It is this reality that requires democratic governance to usher in societal development, to promote inclusion and the participation of citizens in governance with accountability and transparency on the part of government officials. This, of course, will help attracts investment but it also presupposes a stable political environment.

The current situation calls on the Namibia Revenue Agency (NamRA) leadership to find amicable solutions to engage affected parties to avoid further economic disruption. Any form of civil unrest presents a critical threat to the domestic economy, over the short and medium term, in a country that is among the worst afflicted by the pandemic and International financial contagion. The traditional system of enforcing power from top to bottom is increasingly being challenged. There is a threatening social revolution with a growing demand for participatory democracy.

It is important to know that civil unrest can disrupt economic recovery. Civil unrest can increase risk perceptions of investors by increasing expectations about the potential for future outbreaks and instability. People engage in illegal and unethical activities when they are frustrated with legitimate options. Lack of opportunity makes them indulge in criminal acts, and their actions make the whole nation look bad. Instead of allowing persistent unemployment to continue, the government should increase security in the country and hire youth as security agents.

According to Economist Rodney Dan-Ao Hoaeb, Namibia has 27,000 hectares that are suitable for irrigation but only 11,000 hectares are used, thus 40% unused. He also believes a vast amount of land is in private hands and is not covered by this equation.

He further asserted that the grain need in the country is 200,000 tons of which we only produce a fraction ourselves. For this reason, investment should focus on maize, wheat, vegetables, animal feed, table grapes, dates and dairy. However there’s no mention of wheat in the presentation as ministry sees rain conditions as a challenge. Therefore, It is simple, we appoint an Israeli company, we raise this N$2 billion locally (same amount raised by MTC IPO) and locals run this project without government intervention, considering what they did to Agribusdev. Food goes to the local value chain and we become food self-sufficient, concluded Mr Hoab.

Furthermore, at a macro level, rising friction can act as a general drag on economic activity, at a time when positive impetus is sorely needed. The threat of business disruption is also higher, undermining the ability of international businesses to operate in Namibia or substantially changing the terms of business.

Activist-driven volatility can influence political decisions by any government, provide a frame of reference for workforce disputes, and intensify disagreements between companies and local communities. Popular frustration with leaders is widespread and levels of trust uncomfortably low.

The prevailing view is that the government is weak and too cozy with big business, elsewhere, trust has been eroded by the exposure of scandals and corruption. People expect more from government and business, and advances in information and communication technology are providing opportunities for them to express transnational tribal sympathies that can stimulate collective action for better or worse.

In this climate of growing unrest and more rapid communication, individual businesses can more easily get caught on the wrong side of a volatile social, political, or environmental issue and face the risk of product boycotts, cyber-attacks, employee departures and lasting brand damage. The reasons for FDI favouring political stability is that once they get the permits to operate, they invest a lot of money in setting up facilities.

The only way Namibia can solve its many problems is by giving its youth more opportunities to participate in the government, economy, and society. Young people are the prime beneficiaries of school improvement, and the percentage of youth in higher learning institutions is currently very high. Namibian government officials and other elites need to share power with the country’s youth and listen to young peoples’ ideas how to better the country. The young men and women of Namibia are tomorrow’s elders and, if included, could transform Namibia. Without the energy of youth, society will decay and perish.

To this end, it is indeed the case that capital is country shy and region shy and migrates and flows to wherever it is welcome and wherever the macro situation is conducive. This is the lesson that politicians of all kinds must understand if they are to develop Namibia.

Therefore, I believe that the situation will get better if these solutions are put into action by both the government and the citizens of Namibia. She is our country, and we can build the house with combined effort. Let there be peace, and may you be an agent of peace.


 

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