Govt owes NCCI members N$500 million

21 April 2017

The Namibia Chamber of Commerce and Industry (NCCI) has claimed that its members are owed in excess of N$500 million by Government in unpaid invoices for services rendered or goods supplied.

NCCI Chief Executive Officer, Tarah Shaanika, this week appealed to the Government to prioritise the payment of all outstanding debt owed to businesses or risk company closures and further job losses. Shaanika claimed that 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.

He highlighted that some businesses closed down literally and some had to lay off workers and there was need for Government to move quickly to spend more and stimulate business activities.

The NCCI CEO warned that the decision by the Government to put already budgeted projects on hold while the newly established Central Procurement Board find its feet, would further aggravate the situation, especially if there were no measures in place to mitigate such situations.

“We have learned that most Government institutions including State-owned enterprises and local authorities are now required to procure through the Central Procurement Board which replaced the Government Tender Board and various procurement authorities within State institutions as of 1 April 2017.

“This has resulted in most, if not all, major projects earmarked to be executed by various State institutions including SOE’s to be put on hold to allow the new procurement law and its regulations to kick in.

“The Central Procurement Board is now operational, but it is a new institution and it still has to put in place a number of systems and operational procedures. This will delay its operations and it will affect the work it is supposed to do and delay projects,” Shaanika said, adding that the Chamber had previously objected to the arrangement in the current Public Procurement Act, which empowers the Central Procurement Board to make procurement decisions on behalf of all State-owned enterprises.

“Mind you, this institution is so huge that unlike the previous Tender Board, this one will now make procurement decisions on behalf of State-owned enterprises. We objected to this arrangement during the consultations on this legislation because it disempowers the boards of directors of SOEs and gives a heavy burden to the Central Procurement Board.

“We may actually end up having similar problems which we had with the Tender Board. But now that the law is enacted and implemented, we would like to see how it will resolve the issues we had in the previous dispensation. I am sure we can change some provisions if they aren’t effective,” Shaanika said.

“Unfortunately, this process is taking place at a time when Government’s fiscal consolidation efforts resulted in the cancellation and suspension of some projects as well as delayed payment to service providers by the State.

“This means that business activities have already been scaling down and any further delay in procuring more goods and services from businesses by the State and its companies will have serious negative consequences for business.”

Shaanika also called on all Namibians to become more innovative in coming up with programs which stimulate more business activities to ensure increased growth in the economy in order to avoid business closures and further job losses.

His comments come as the Ministry of Works and Transport has announced that it might not be able to pay some of its outstanding invoices this financial year after Treasury only released N$581 million of the N$702 million the ministry owes service providers.

The cash crunch experienced by the Government last year saw the ministry failing to pay invoices worth an initial N$702 million, but the finance ministry has since allocated N$581 million in the 2017/18 budget, leaving an outstanding amount of N$120 million.


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