Promoting business advisory and economic transformation services in Namibia

Context

Despite being classified by the World Bank as a "higher-middle-income country" in 2017, Namibia is in an economically difficult situation. Since 2017, the Namibian economy has been recording negative growth rates of the gross domestic product (GDP), from 1.0 per cent and 1.1 per cent in 2018 to approximately 8.2 per cent in 2020. As Namibia exports its raw materials unprocessed, only low added value is generated locally. Weak demand for domestic consumer goods and processed products results in high imports. Unemployment among 15 to 34-year olds in 2018 was 46.1 per cent. Namibia also suffers from an extremely unequal distribution of income and wealth, with 13.4 per cent of the Namibian population living on less than 1.90 US dollars a day.

The country is in direct competition, within the Southern African Customs Union (SACU), particularly with South Africa's industrialised economy, which is also its most important trading partner. Access to financing is difficult for Namibian businesses due to the comparatively low number of financing providers for micro, small and medium-sized enterprises (MSMEs). 

Against this background and in line with Vision 2030 the Promotion of Business Advisory and Economic Transformational Services (ProBATS) programme supports the industrial policy (2012-2030), the implementation strategy "Growth at Home" (2015-2020), the financial sector strategy (2011-2021), the financing strategy for small and medium-sized enterprises (SME) (2018-2021), the policy to promote micro small and medium-sized enterprises (MSMEs) (2016-2021) and the current National Develop-ment Plan NDP5 (2017-2022) in Namibia. NDP5 places special emphasis on industrialisation in the sense of structural change and diversification of the economy. This includes increasing the added value of existing products and sectors and developing human capital through education and training.

Objective

Namibia’s economy is growing through advisory and economic transformational services for domestic businesses.

Approach

ProBATS is a joint Namibian-German project promoting sustainable economic development in partnership with the Ministry of Industrialisation and Trade (MIT) and the Ministry of Finance (MoF). It follows on the Promotion of Competitiveness of the Namibian Economy (ProCOM) project. While ProCOM supported the Namibian government in developing various policy and strategy papers, ProBATS focuses on implementing these strategies in the field of private sector development. It also aims to develop Namibia’s financial systems to promote business growth and thus increase employment and income.

Results

The following results were achieved through dialogue between the private sector and public institutions:

•  A “Pitching for Business Recovery” grant scheme mitigated the negative impacts of COVID-19 for 192 SMEs in 14 regions. In addition, 77 companies most affected by COVID-19 benefited from a liquidity relief scheme. 
• By officially formalising the Namibian Network of the Cosmetics industry (NANCi), it can now collect membership fees and act as a legal body for the cosmetics industry.
• Phase one of pilot training for 100 SMEs in the production of charcoal and biochar was completed with 51 participants. 
• A "Mine Stone" initiative was developed with a series of gemstone products whose added value lies entirely in Namibia. It also addresses transparency and sustainability. The Mine Stone brand won a platinum award at the Namibia Tourism Expo 2020.
• ProBATS set up an electronic system to map, manage and track implementation of the “Growth at Home” strategy. It enables the Ministry of Industrialization and Trade (MIT) to receive and provide up-to-date information on its business-support activities.
• Company registration processes have been digitised and accelerated by introducing an online registration process with the Business and Intellectual Property Authority (BIPA).
• The Namibian development bank DBN, supported by ProBATS, now runs the SME financing strategy with a loan guarantee programme, mentoring and coaching.
• “Pitching for Business Funding” trained more than 160 MSMEs in financial management, of which 40 received 256,000 Namibian dollars in total to launch or develop the best business ideas.

Last update: May 2021