President Geingob’s Legacy

President Geingob’s Legacy

As the year ends and the election looms large on the horizon many people have asked me what is in store for the nation in the coming year. The government tells us that growth will return next year and things will start to get better. After three years of economic decline and the government continually predicting the same outcome ‘next year’ and opposite happening there are few who believe that growth will return. Two weeks ago I sat down to dinner with five economists who were discussing Namibia’s future and when one of the country’s leading economists boldly predicted that not only will there be no growth next year that 2020 will be the worst year of Namibia’s Great Depression… so far. And that of course is why no-one ever invites economists for dinner because they will be tasteless enough to talk about Economics and then tell you with a measure of insufferable arrogance about what an unknowable future will look like.

Nevertheless, no-one around the dinner table disagreed that 2020 will bring us another year of economic decline. The reason why we have had no turnaround is simple enough -we have done nothing but talk and make minor cuts in the budget. What is needed is radical surgery and everyone from the President to the cabinet and the Bank of Namibia know exactly what has to be done. The drastic surgery that is needed in Namibia is well known, and as much as I dislike the IMF, it is right- the enormous government wage bill, the hopeless loss making state owned enterprises (SOEs) and the absence of any real control over the absurd infrastructure projects are the fundamentals that underlie government’s problems.

Mr Geingob and the Finance Minister, Mr Schlettwein have as yet not addressed any of the fundamental issues that underlie our economic woes. In fact the recent statement by the minister for Public Enterprises, Mr Jooste that there are no publicly owned companies except MTC that can be floated on the stock exchange simply confirms that nothing is on the cards in terms of the SOE reforms the country so desperately needs.  Many SOEs need to be simply shut to stop the financial bleeding and allow the money saved to be used for real investments in development projects that will accelerate growth in the economy. To do that we have to assure that the money is invested wisely in infrastructure that brings real economic benefits, not just new buildings at NATIS or Police Headquarters or Immigration etc etc.  

Either of two things will get Namibia out of the current economic mess we are in- either the government takes action on the matters that are creating such deficits and then with the money saved starts real public investment or the private sector starts investing again. The latter is even less likely than the former because the private sector is increasingly looking at the Namibian government as though they simply do not want them here. One piece of legislation after another from NEEEF to the foreign exchange bill are seen as unfriendly to business. More importantly the way government talks about business is positively hostile.

It is fairly predictable that Mr Geingob will win the elections in two weeks, probably with a decreased majority but no-one, can tell you about the future with any certainty. The past is another matter and after 27^th November Mr Geingob has a legacy to think about  ie what the future will say of the past;  of what he did with ten years in power. On the basis of what has happened in Namibia over the last four years of his watch it is also pretty obvious that those who will write Namibia’s history books in future may be very unkind about his management of the economy. Nevertheless he still has a chance to revive the economy.

            The changes that are needed to mend the damaged Namibian economy will be very painful and so the likelihood of cabinet implementing them voluntarily is minimal. It would result in thousands of public servants and employees of state owned enterprises losing their jobs. At the end of his mid-term budget review that Mr Schlettwein brought down in the National Assembly last month he quoted Arthur Burt, a Canadian MP, who said: “Nothing happens until the pain of remaining the same, outweighs the pain of change.” This shows a complete misunderstanding of economic pain. Those who want change are the vast majority of Namibians - those who are ‘outside’ the tent- the destitute and the unemployed, those who gain little from the government’s programs and those who never win government tenders. But these are largely powerless people. For the minority who are employed by government or SOEs , who do win tenders and who are politically ‘connected’ there is no obvious benefit to change as it only brings the risk of losing what little they have. These are people who would certainly like to see improvements but would be perfectly happy to see things stay more or less the way they are now. The problem is that these are two quite different groups and while the vast majority of Namibians do want real change and thereby assure Mr Geingob’s positive place in history, those ‘inside the tent’ want things to remain as they are. The pain of the two groups cannot be added up like some primary school exercise in arithmetic because the pain of one group is the pain of the powerless and the other is powerful. Until cabinet and government starts to reflect the huge pain suffered by unemployed Namibians each day then the necessary reforms will not happen and we will continue to stumble until we are bankrupt and the IMF gives us no choice or we will walk the hard road to becoming another Zimbabwe.  

These are the views of Professor Roman Grynberg and not necessarily UNAM where he is employed.