Wishful thinking or educated guesses?

02 June 2017
We applaud the National Planning Commission for the work that obviously went into preparing and presenting fifth National Development Plan (NDP5). 
But, we are not sure whether the projections noted are over-ambitious and based on a political requirement to present a rosy picture of Namibia, or if they are the informed projections of growth levels over the next five years.
Given the fact that the ‘precarious’ economic landscape that Namibia is currently navigating is based on estimations of GDP growth for 2016 that ended up being way off the mark for varying reasons, we would have thought that new assessments of economic growth, employment possibilities, and SME job creation, among other issues, would have been more modest and tight.  Is it not better to under-promise and over-deliver than the opposite? 
While admittedly, we are not economic experts and will await the more lengthy analyses that are certainly on the way from those who are, our preliminary reading of the NDP5 document has set our alarm bells ringing.   Where are the massive amounts of funds to drive NDP5 plans going to come from?
Ministry budgets have been slashed everywhere for 2017/18, and yet in 2018/19 NDP5 projects that our GDP will grow and employment will increase.  At this point, we have grave concerns over such projections.
We look at a programme that seems to say that Namibia will create over 200,000 jobs in the next five years, and we are mindful of the administration’s promise to the AR movement in 2015 that 200,000 serviced plots will be made available in that year.  Just as that was totally unrealistic and retracted after a year, we wonder about the future for this pronouncement as well.
Is the administration presenting huge figures to appease a particular constituency or are they actually making the policy/regulatory changes, budgetary allocations, incentives and technical staff recruitments that will assist the private sector to create that many jobs? We are uncertain.
The fact that nearly a quarter of those jobs that are projected to be created over five years are supposed to come from the construction industry where people are now being laid off in the tens of thousands at the half-way point in 2017, reinforces our scepticism about these kinds of rosy TIPEEG-style job creation projections.
We doubt that SME job creation will increase from 132,000 jobs in 2017/18 to 177,000 in 2021/22, when indications show shrinkage in actual financial support from GRN for SMEs. 
The rhetoric about supporting SMEs is as heavy as ever, but the tangible programmes that address barriers to SME growth have had their budgets cut.  The Ministry of Trade, Industrialization and SME Development has all but abandoned its SME equipment support programme due to its own budget cuts. 

Banks are as reticent as ever to lend to SMEs without commercial levels of collateral and tonnes of paperwork.  As the Government moratorium on tenders continues, SMEs that have thrived by winning those contracts over the years are fading.  And yet, there is a year-on-year increase in SME job creation throughout NDP5. 
Of most concern is our layman’s observation that NDP5 projects growth rates in 2017/18 at 2,3 percent, makes a huge jump to 4,3 percent in 2018/19, then it is projected to be 5 percent the next year, 5,3 percent for 2020/2021 and finally a colossal 6,2 percent in 2021/22.  Is it not such aspirational assumptions of growth in the GDP that got us into the over-expenditure, over-borrowing, economic contraction that we are suffering through now? 
We wonder whether there is a connection between the optimism in NDP5 to the administration’s need to project an upbeat view of Namibia’s future under their aegis.   We wonder if the pressing political need to show a bright light at the end of a dark economic tunnel has over-ridden the need to be more sober with projections.
We hasten to say that we hope the economy does recover over the next five years as per NDP5.  But, just as we are correctly reminded by President Geingob that people cannot eat a Constitution, we also know they cannot eat rosy financial projections either.
The masses of the people in Namibia will likely be confused by NDP5.  People are losing jobs now; the freeze on civil servants’ jobs is in effect now, and citizens are falling behind on their house bonds, car notes and municipal bills.  School fees are going unpaid.  PSEMAS members are being forced to pay cash upfront for medical services. SMEs are going bankrupt today because Government cannot pay what is owed to them on finished contracts. 
With these and other financial realities facing ordinary Namibians in this moment, we are concerned that overly-encouraging economic news will not be interpreted by worried citizens as a ‘long term best guess’ but as a promise for today.  They will then expect that promise to be filled now, not over five years.  Raising expectations with an overly optimistic plan may just backfire.

 tortise consultancy


The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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