WINDHOEK – The shortage of qualified accountants in the country is hindering the growth of small businesses, many of which fail or go dormant because of inadequate scrupulous audits of their financial information and general stringent supervision by accounting officers.
Currently the country has about 400 professional accountants servicing about 500 000 taxpayers, a number that the Minister of Trade and Industry, Carl ‘Calle’ Schlettwein, says “imposes a further burden on the accountants’ cohort”.
Schlettwein was speaking at the launch of the Namibia Institute of Professional Accountants (NIPA) this week, which reinvented itself from the former Institute of Commercial and Financial Accountants of Namibia.
He said the reinvented association, NIPA, has an absolutely crucial place in promoting accountability and transparency of Namibian business activities and ensuring that companies and close corporations comply with relevant financial obligations applicable to them under various legislation, amongst others, the Financial Intelligence Act and Close Corporation Act.
“As an illustration, I would like to draw your attention to the problem of high failure rate of small businesses registered as close corporations. A significant share of them also lies dormant, meaning they remain inactive. To avoid such inefficient deadweight loss situations in our economy it is, therefore, essential that companies and close corporations are subjected to scrupulous audits of their financial information and general stringent financial supervision by accounting officers,” said Schelttwein.
In 2008 Namibia had 280 accountants and auditors to service 300 000 taxpayers. Currently there are about 400 professional accountants, while the number of taxpayers has also grown over the years to about 500 000.
“It is estimated that one professional accountant is able to service around 1 000 taxpayers. This implies that Namibia has a shortage of at least 100 accountants,” said the minister, asking NIPA, which became autonomous from its South African counterpart nearly a decade ago, to prioritise strengthening of the profession.
The Bank of Namibia recently projected the Namibian economy to be on a positive accelerating growth path and it is expected the economy will grow by 5.6 percent this year.
The business and investment climate is also deemed positive, particularly in view of the extensive reforms undertaken to strengthen it.
The reforms by the trade ministry include a review of the existing, and development of the new, legislation such as the Business and Intellectual Property Authority (BIPA) and Namibia Industrial Development Agency (NIDA) bills, the Investment Act and the Export Processing Zone Act.
“All of them are aimed at improving the investment and business environment for both domestic and international companies in Namibia, to make the environment more attractive, transparent and efficient to operate in,” said the minister.
Schlettwein says an important factor in ensuring the sustainability of the positive growth trend and business and investment confidence is the expansion of tertiary industries to support and service the smooth development of the rest of the economy, particularly the manufacturing sector.
“Financial, accounting and auditing services constitute, no doubt, an essential part of a modern economy. Unfortunately, there is a significant persistent deficit of accounting skills,” he said.