Factors such as lack of access to finance for business start up, lack of skilled workers, mismatch of skills are amongst the deficiencies found to hinder improvement in competitiveness in Namibia.
The Bank of Namibia ‘s recent research paper ‘Improving Namibia’s competitiveness states that Namibia’s competitiveness was found below average and appropriate steps need to be taken into account to address the situation.
The study was conducted by BoN research officer Mirjam Ebenezer Nelago Iyambo.
The objectives of the study was to review the competitiveness of Namibia as done by World Economic Forum to determine whether the competitiveness of Namibia is reflective on the ground.
Most small and medium enterprises surveyed during the study noted that they are left out on getting loans from commercial bank.
“The respondents on the BoN questionnaires indicated that the application for loans took a long time to process, and collateral is still locking them to expand their business in order to d employ more people.
Thus, their only source of expansion is accumulated profit and contributions from friends and families,” as stated in the BoN research study.
The report also expressed that lack of innovation and technology advancement, lack of an industrialisation policy, inefficient labour as well as long procedures in starting up a business might discourage the potential investors from investing in the Namibian economy.
Innovation and technology was rated very low because Namibia being a net importer has most goods imported for resale.
Furthermore, manufacturers who wanted to come out with innovative ideas indicated that they often lacked financial support to carry out those projects.
They further indicated that their ideas and products were not protected from being copied from others.
The BoN study also states that most business owners contacted confirmed that the domestic market was small and that Namibian preferred buying foreign made goods while some of the locally produced goods are of higher quality than the imported ones.
However like GCI survey, the BoN survey covered mostly Windhoek and not all major towns of the country which could have painted another picture.
According to the Global Competitiveness index 2012-2013, Sub Saharan countries still face the biggest challenges of all regions.
Out of the regions included in the Sub Saharan GCI report are Botswana, Rwanda, Mauritius and South Africa were highlighted as competitive.
Although Namibia is also ranked in the competitive countries in Sub Saharan, it was pointed out that its health and education were rated worrisome. Namibia’s health was ranked a low 120th on the health sub pillar with high infant mortality and low life expectancy as a result of high rates of communicable diseases.
The educational system was ranked 127th with enrolment rates remaining low with the educational system remaining poor.
In order to improve its competitiveness, the BoN survey suggested that Namibia should take in lessons that countries such as Sweden, Mauritius and South Korea did to improve its competitiveness.
“Some of the lessons learned include the streamlining of the processes required to start a business, access to finance for businesses made easier, reviewed tax and labour legislation and encouraging the consumption of the products made in the country. Generally, any improvement in the overall competitiveness will benefit businesses in Namibia in terms of economic growth and employment creation as well as through increases in the growth of per capita income,” as reported in the BoN survey.
Some of other recommendations forwarded in the BoN report include improving access to finance and business support for SMEs as it has a potential of generating jobs and income. On the other side, Ministry of Trade and industry should create one stop to help local and international entrepreneurs who want to start businesses.
When it comes to education, it will also preferable to improve the level of education and skills in line with the Education and Training sector improvement program focusing on skills that can support industries.
More over, they have advised that the Ministry of Trade and Industry should promote technology diffusion and innovation through a national partnership involving complimentary action by the government and public sector