‘Historical Inhibitions Scuttle Black Business In Namibia’

‘Historical Inhibitions Scuttle Black Business In Namibia'
Windhoek, Namibia

AFRICANGLOBE – He says that “we should not make the mistake of generalising and expecting that every Black business will fail as there are a few players who have made it, although the relative majority are less influential in the economic sector at the moment.

“Blacks are not seen as successful (business people); there are few who make it in the SMEs (small and medium-sized enterprises), but you will really count them on your fingers, especially when it comes to expanding regionally and internationally,” he reckons.

However Haikali, a former trade unionist, who is also a full time farmer, says that there seems to be a lack of culture in responsible business ethics, repayment of loans and reinvestment among Black people.

“People enter into business deals instead of reinvesting; they buy luxury items that are not sustainable. There is a tendency to borrow to sustain lifestyles where income generated is spent on luxury items and the culture of saving is not sustained,” he said, adding that many business people lack the knowledge of sustainable growth strategies.

He says that there are basics in sustaining good business, such as the need to have a letter of good standing from the Social Security Commission (SSC) and paying corporate taxes.

“I must also blame government for doing little to generate taxes from smaller business entities where majority of our people are employed in SMEs,” he maintains.

Haikali shares the sentiments of the Governor of the Bank of Nambia (BoN), Ipumbu Shiimi who warned Namibians in April this year, to desist from borrowing large amounts of money to finance unproductive and not so useful imported luxury goods that are putting pressure on the country’s international reserves and the financial sector.

In particular, Iipumbu said that people were taking loans to buy luxury imported motor vehicles, but had difficulty paying back the loans, which was swelling the import bill.

Recently, the IJG, one of Namibia’s leading financial services companies, revealed that over 800 000 Namibians were consumed in debt ranging from borrowing large amounts for mortgage, vehicles and other expensive luxury items such as electronics.

“Government put in policies to assist Namibian companies to enter into business, but policies are not sustainable. Contracts are tender-based. There is not much investment or reinvestment going forward,” said Haikali.

He said the trend or lifestyle of Black business people using business profits to finance their lifestyles is not only found in urban areas.

According to Haikali, the agricultural sector should also not be underestimated, especially the upcoming commercial farmers and people building SMEs in rural areas, who also use profits they make to finance expensive lifestyles.

He says that banks are still very strict and discriminatory when granting loans, however the principles on which some owners of SMEs run their businesses, where multiple bank accounts are opened and income of the company is diverted into lifestyle expenditure or business depends on tenders are also questionable.

“Competition for prices are exaggerated while there is no quality for work. Kick-backs for tenders are demanded; there is no focus or specialisation in a particular business, but businesses tender for whatever they can lay their hands on,” he pointed out.

Haikali maintains that in Black businesses there is a lack of capacity and a tendency of copying where, “if you see your neighbour has a Shebeen with jukebox and jackpot, then you also want the same”.

He says that Katutura (the Black suburb in Windhoek) is a lively place where from early morning you see many vehicles being driven around, but you wonder where so many vehicles are coming from in a place where the poorest of the poor live.

“That is a sign of a vibrant society that does not engage in constructive business,” he adds.

But he is opposed to the notion that successful Black business people have made it because of corruption, saying that it is an insult.

“The irony is that it is coming from fellow Black people. Perceptions are also created by what people read in the media and political leadership. When you see white successful business people, it is assumed that they are hardworking, but Black business personalities are automatically presumed to have some type of linkage (connections) or having become successful through illicit means.”

But in retrospect, he says that business is about networking – it is not who you are, but who your friends are.

He adds that smart partnerships and networking is the way to go and it does not matter whether it is a white-owned business with potential, he will go into partnership if he can make things happen.

“Namibia is such a small society. It does not mean that even if I left trade unionism and I got into business that I will lose my trade union roots.

“My linkage does not abandon me. I am still a Swapo member. If I am doing business with government, it does not mean that it is because I am a Swapo that I will automatically get a tender – it is the same for children of ministers.”

He lashed out people who bribe their way to success saying that it should not be allowed in business.

On Black Empowerment Enterprise (BEE) in Namibia, he says that the initiative took off well in terms of Black-owned companies springing up, but the concept is misinterpreted and labelled.

He adds that because of the labelling and all negativities associated with it, such as entitlement, poor quality products and corruption, he shies away from getting involved.

Nevertheless, he does not agree with the notion that BEEs have created Black elites, saying that the concept has made inroads to build a broader and dynamic middle income that happens to be the majority Black.

“The reality is that there are (economical) classes already in Namibia, but the only way to balance that is to build a middle income class. What is wrong with people advancing from being poor to middle income?

“Isn’t it what we want in order to eradicate poverty? No one wants to die poor, but there are also those who do not want to see others move up from middle income to being rich. If I go into business, how much is enough?” he asks.

According to Haikali, there are three classes in Namibia: the poorest of the poor who are majority Black; the upcoming middle class and the extremely wealthy and the only way for poverty eradication is education, good health and sustainable growth of the middle income group.

He adds that the economic sectors that can make Namibian businesses are agriculture, tourism, mining and engineering services, because there is saturation in the construction industry where everybody wants to build homes. Businesses where Black Namibian businesses can make inroads are in IT and renewable (solar) energy, he says.