Treasury has released N$600 million towards settling unpaid Public Service Medical Aid Scheme (PSEMAS) service providers and other contractors’ bills that had been outstanding since the last financial year, Finance Minister, Calle Schlettwein, has said.
Schlettwein admitted in a recent interview with the Windhoek Observer that Treasury had not been able to fully settle all invoices from service providers and contractors because of liquidity constraints.
He, however, said the recently approved N$3 billion loan facility by the African Development Bank (AfDB) will go a long way in settling these outstanding payments.
The Namibia Chamber of Commerce and Industry (NCCI) Chief Executive Officer, Tarah Shaanika also confirmed that there were some businesses that had received payments since the beginning of the current financial year.
However, Shaanika said he could not quantify how many businesses had been paid or the total amounts so far, but said there were remained several companies that were still waiting for their overdue payments.
“It is possible that these payments have been made so far but I cannot vouch and say it is true or false, but what I can say is that there have been some payments that have been made to some contractors including PSEMAS service providers. I cannot, however, say how many or how much has been paid out but there are still several outstanding payments,” Shaanika said.
The Windhoek Observer reported last month that the NCCI claimed that Government owed its members in excess of N$500 million in unpaid invoices for services rendered or goods supplied.
Shaanika at the time said that Government should prioritise payment of all outstanding monies owed to businesses or risk company closures and further job losses.
He said some of their members were either being liquidated or were at risk of being liquidated because of Government’s delay in payment, while some members were finding it difficult to continue operating at the same level as before because of Government’s budget cuts.
Speaking to the Windhoek Observer last week Thursday, Schlettwein said Government was committed to paying all outstanding invoices to suppliers and contractors.
“What we have indicated in the budget is that we have set aside N$1,8 billion for unpaid tenders and that commitment stands. We have started to pay since April when the financial year started and we have already paid to date about N$600 million of all various unpaid PSEMAS service providers and contractors that had outstanding payments.
“The full payments have not yet been done and were dependent on the liquidity and availability of funds, but with this facility (AfDB) our ability has even increased now and we will see to it that we do it as soon as possible.”
The minister used the interview to take a swipe at critics that have labelled the recent upgrade of Namibia’s national ratings by Fitch, to AAA from AA, as just a technical point, which does not have much significance to the country as Schlettwein had made the country to believe.
“People can argue whatever they want, but if our credit rating is changed from AA to AAA that is an upgrade and those that say I am wrong in my interpretation are in fact wrong,” the minister said.
“An upgrade is an upgrade, but it is only vis-à-vis that of South Africa and that country’s market, because 70 percent of our imports come from them and by far the biggest chunk of our debt is either in our local currency or the rand.
“It is a significant point that our ability to pay back the local currency and rand debt has improved vis-à-vis South Africa and an upgrade therefore remains an upgrade.
“If the rating agency, in that case Fitch, considers that our position vis-à-vis South Africa has improved, that implicitly tells me that the overall sovereign rating is secure (for now) and there is no additional risk that would entice them to downgrade us immediately. They recognise that our ability is better and I am confident that we are managing ok.”
The minister argued that the upgrade brought back confidence in the Namibian economy and it was appreciated by AfDB as a shot in the arm for the country to access the recent funding.
“For the man on the street, it means that the credit they take up is much cheaper, and that is one benefit. Our ability to develop and raise funds for our development agenda is also not in jeopardy,” the minister further said.