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Informal sector needs support

Mon, 9 June 2014 02:22
by
Columns

Since independence Namibia has done tremendously well to come up with mechanisms that allow the local previously disadvantaged folk to make it into the mainstream economy.
Part of the initiatives that Government has implemented includes the creation of Developmental Finance Institutions (DFIs). These include the Development Bank of Namibia (DBN) and the Small to Medium Scale (SME Bank). These have been mandated with the challenge of improving financing for the small businesses.
Perhaps looking at the loan book of DBN which is now well within the N$1.7 billion mark while the SME Bank revealed that they have issued out loans of N$40m since inception, one would say we are doing okay in that respect.
However there are short comings when it comes to catering for the informal sector. This is the sector where the painter, welder, carpenter and plumber who cannot be absorbed into the economy is trying to make ends meet through his own initiatives.
The informal sector by any standard is a massive employer on its own and whether they are paying tax to the Government is another story for another day.
This week the informal sector association tells The Villager that the Government does not seem to include them in policy formulation and implementation although they are consulted.
Are we not on a self-defeating process? We are a country that has about 750 000 people who can be employed and we have a challenge of 29% unemployment and we forget to cater for the informal sector.
Bearing in mind that informal sector should not be translated in the true sense of the word. This sector is equally vital and last year President of the Namibian Chamber of Commerce and Industry (NCCI) revealed that the sector has potential to contribute close to 14% to the Gross Domestic Product.
With such potential can we really afford to ignore them? It is obvious that that their voice needs to be heard and taken into consideration. They also need to have a slice of the DBN and SME bank loans.
If that is done then we will be doing ourselves a favour because we will eventually meet the targets of our economic blueprint Vision 2030. We call upon on Government today to not cast a deaf ear to the calls of the informal sector but also help them find their way into the mainstream economy.
In fact it has been proven that the bulk of the developing world that struggles from failure to create formal jobs survives on the informal sector.