Govt Does Not Often Buy Nam Products

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By Wezi Tjaronda WINDHOEK Namibia’s current situation, where it imports almost 80 percent of goods and services, is depriving itself of the chance to industrialize, create employment and increase its foreign reserves. By importing goods and services, the country is creating industrial and economic growth and employment for countries from which it imports the goods. Namibia is said to lack economies of scale because it does not have a domestic market big enough to absorb all the products that are locally produced, but a survey done by the Ministry of Trade and Industry (MTI) on seven government ministries has found that the high level of imports implies that Namibia has a possibility of high production capacity, which needs to be exploited. The survey is entitled “Government Procurement Survey – an analysis of products procured by government, expenditure patterns and opportunities for local manufacturing.” The seven Ministries of Defence, Education, Finance, Health and Social Services, Regional and Local Government, Housing and Rural Development, Safety and Security and Works, Transport and Communication were sampled on their buying patterns to determine government procurement trends during the 2003/4 and 2004/5 financial years. It was found that government spent over N$434ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million in 2003/4 and N$582ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million in 2004/5 financial years to purchase goods and services. The bulk of this money in 2003/4 went to material and supplies (N$296ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million) and construction and renovations (N$241ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million). During the two financial years, the seven ministries used 80 percent of the total amount spent to purchase both imported materials and supplies, and furniture and office equipment, while only 20 percent was used to buy locally-produced goods. Of the N$270ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million that was used to buy import materials and supplies, furniture and office equipments, N$216ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million was spent on imports while N$54ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million was used to purchase local goods. The same year, N$28ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million was used for office furniture and equipment, with N$22.5ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million being spent on imports and N$5.6ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million on locally-produced goods. The report indicates that, apart from a few cleaning materials, toilet papers and furniture, most of the goods procured by government departments are imported. Other goods and services bought by the sampled ministries include furniture and office equipment and maintenance expenses. The report will be submitted to Cabinet for it to know what is happening and then give direction on the way forward. This forms part of the report’s recommendations that Cabinet should issue a directive for public institutions to start procuring their supplies from local manufacturers in order to help them grow. “While it is conceived that most local entrepreneurs are still in their infancy stage, government departments, agencies and State-owned enterprises (SOEs) must be instructed by Cabinet directive to start procuring their supplies from local manufacturers in order to help build the industries and sustainable businesses as well as capacity-building within the industries,” said the report. Although the government purchases most of the goods locally from Namibian businesses, these products are made elsewhere. The survey found that the ministries spent N$164ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million to purchase rations and food, stationeries, clothing material for security forces, fuel and lubricants, manufactured clothes, shoes and leather boots, cleaning materials, buttons and cement. Other goods include roof coverings, tents, structural steelwork, blankets, cooking utensils, batteries, fertilizer, electrical materials, fingerprint supplies, razors, and tubes and tyres. “It is obvious from the above list that, without excluding other products, the top products provide opportunities for local manufacturing and industrial diversification,” said the survey report. Speaking to New Era yesterday, MTI Permanent Secretary, Andrew Ndishishi, said the ideal situation would have been to start supporting the domestic products for them to grow to a point of being exported. “We have the goods on the market, but we prefer imported ones,” he said, adding, “It is a difficult thing to understand.” The Namibia Manufacturer’s Association (NMA) has also voiced its concern about the lack of support for Namibian-made products. NMA Chief Executive Officer, Hennie Fourie, said the biggest problem facing local businesses, especially in Ondangwa, Ongwediva and Oshakati, is that the government and State-owned enterprises do not buy locally-manufactured goods. “It is disappointing to many manufacturers that government does not often buy when there are good products,” said Fourie. Namibia produces pharmaceuticals, road signs, wooden products, clothing, plastic products and others, all of which should be bought locally. Although there are sometimes quality and price problems, it is believed that people’s mindsets are that imported goods are better than locally-made goods. The survey also recommends that local entrepreneurs be assisted to access competitive technologies which are easy to operate, source production inputs, technology transfer and competitive prices, and to access affordable finance, industrial premises managerial and entrepreneurial skills development training.