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DBN short-changes manufacturing growth?


by Honorine Kaze
Business

 

Despite Government’s overdrive on improving the manufacturing industry in the country and buffer chances of creating employment, the sector remains one of the most underfunded, receiving a meager N$1.2m from the Development Bank of Namibia (DBN).
DBN has so far only been involved in the construction of Ohorongo Cement Factory where they own a 10%-stake as their contribution to the enhancement of the manufacturing sector.
This comes at a time when the Ministry of Trade and Industry just presented an Industrial Development Policy draft in a bid to improve the country’s industry.
However, the deputy minister of Trade and Industry, Tjekero Tweya does not feel defeated by the underfunding but insists on the fact that one can always do their best with what they have.
“I am realistic that the funds that have been availed in the manufacturing (sector) will not hinder the manufacturing industry from progressing; the sector will still do its best with what it has got,” he says.
The industrial policy crafted under the guidance of the Southern African Customs Union (Sacu) aims at getting the manufacturing and service sectors to account for approximately 80% of the GDP within the next 18 years, which will ensure the development of an established network of modern infrastructure including roads, railway and telecommunication and port facilities.    
“In order to keep the industrial development going ahead without delays, we call on the private sector to come on board and support the projects at hand,” Tweya points out.
The challenge that the deputy minister finds more on the ground rather is not the under-funding of the manufacturing sector but the headache that the local manufacturers go through in order to have their products recognised in the country compared to international manufacturers.
“Our fight is mostly channeled in getting the local manufacturers on higher level and known locally as well as internationally. It is in this aim that we organise local expositions meant to market the local products,” Tweya adds.
The unavailability of a well-crafted manufacturing sector has in the past been blamed for the ballooning unemployment as graduates from tertiary institutions cannot all be absorbed in the few serviced operational industries.
The recent DBN loan book also shows that the bulk of the bank’s money went to the construction sector, which received loan approvals of N$28.1m; a move DBN head of lending, Martin Inkumbi describes as a result of advanced funds on the SME contractors.
“Construction took the lead during the quarter as a result of the financing advanced to SME contractors through the bank’s bridging finance facility to enable skilled promoters to implement tenders and contracts,” Inkumbi emphasises.
Funding for Kunene and Ohangwena regions were the lowest scooping 0.2% and 0.5%, respectively, of the total value  of loans over the first quarter of this year compared to the bulk of projects funded in the same period in Khomas Region with 32.7% of the total loan value followed  by the Oshana regions, which represented 22.3%.
According to Inkumbi, DBN Q1 loan approvals are of N$103.7m with the SMEs still getting the biggest chunk of 63.2% of the total amount.
The SME sector has been recognised as one of the backbones of the Namibian economy.
Since the inception of DBN in 2004, the bank has approved loans valued at over N$2.4b.