The drive is 40 minutes from Hosea Kutako International Airport. Or maybe 25 minutes depending on the speed of your taxi driver. The entire drive is a series of cars passing other cars at excessive speeds on winding roads. The landscape is green and unoccupied. Then suddenly Windhoek emerges.
Construction sites scattered amongst a bustling downtown that resembles Johannesburg right before it became the financial power of Africa. Windhoek is not Africa’s next financial powerhouse. Or, at least, there is no sign of it at the moment. Namibia has all the good and bad remnants from South Africa’s 75 year rule over it. Namibia and South Africa share similar literacy rates and businesses. Good infrastructure supports the country’s small population.
On the contrary, the Namibia also inherited an unequal society that continues to grow a greater divide. The Gini coefficient places Namibia’s inequality in the top one percent. About one in three Namibians live on less than $1.25 a day. Unemployment still hovers around 50 percent and the HIV/AIDS rate, while dropping, is still above 13 percent. Namibia has an underwhelming welfare system and is struggling to meet the demands of trade unions.
The potential of natural resources continues to bring hope especially for a population of 2.2 million, one-twenty-fifth the size of South Africa. The discovery of large oil reserves almost two years ago still creates a buzz on the streets. Namibia is the hidden gem or unspoken country in the emerging African oil & gas conversation, says one government insider, but we like it that way.
Namibia also is the world’s fourth-largest producer of uranium. It produces a large quantity of zinc and a moderate amount of gold among other minerals. Foreign investors are coming to the country with an interest in commodities trading, says Kela, owner of Cutting Edge Enterprises. A growing amount of consulting companies are coming online to help facilitate the interest of foreign investors into the system. Foreign investment and trading will definitely help to create more employment opportunities for Namibians. But how much is unknown. Botswana’s approach to the diamond industry is definitely a model to consider, says a group of local business, as long as the government provides the rewards to the people.
The new consulting businesses also represent the changing small and medium enterprise (SME) landscape in the Namibian economy. More than 70 percent of businesses are very small and employ less than three persons. The new SMEs in Namibia will have to create more than three jobs. Consulting companies are a start. Manufacturing and mining have the greatest potential to create jobs in the SME space. But entrepreneurs still need more capital and government support.
The Development Bank of Namibia (DBN) is making its best efforts to provide loans to SMEs. Experts estimate that the DBN will not be able to provide more than $15 to 20 million to SMEs per year in the near future while the sector requires more than double that amount of capital. Private equity and venture capital firms will have to provide the remaining capital demand. The Deputy Minister of Trade and Industry Tjekero Tweya is strongly promoting this need for private capital investment and declaring the government’s readiness to work with newcomers to the country. Such talk signifies Namibia is ready to come from under the radar.
