Windhoek-The official opposition party – the DTA –says much of President Hage Geingob’s optimism in terms of Namibia’s economic outlook is based purely on hope.
The DTA was reacting to Geingob’s address on the Namibian economy, among other burning issues affecting the country, which he delivered on Monday at State House.
The underpinning fundamentals of the Namibian economy are stronger today than they were a year ago, Geingob had said, noting that the domestic economy has passed through the brunt of the economic downturn and is now on a recovery path.
To support his view, Geingob highlighted the significant rain received earlier this year, which is fueling a recovery of the agricultural sector; consumer price inflation, which has been on a downward trajectory during the past six months and hit a low of 6.1 percent in June 2017; demand indicators such as monthly credit extension by commercial banks and improved vehicle sales; as well as “remarkably” improved liquidity conditions.
However, DTA Member of Parliament Nico Smit said his reference to a recovery in the agriculture sector and Windhoek’s water stocks is based on good rainfall over the recently ended rainy season.
However, he noted, the president conveniently does not address the question of where the country will find itself should the country suffer poor rains in the coming rainy season.
Similarly, he said, he found little comfort in the president’s optimism towards economic recovery in South Africa and Angola, saying that in the former, forecasts for the economy remain subdued, while in the latter there are likewise no concrete signs of recovery.
“It would be quite some stretch of the imagination to believe that many … Namibians, including those who occupy the seats of power in our country, agree with the president’s assessment that the economy is doing better than what is being projected in the media and discussed in public.
“For starters, the presidential economic advisor, Dr John Steytler, was quoted in The Namibian newspaper approximately two weeks ago using a medical analogy to refer to the Namibian economy by stating that ‘a heart attack was avoided, but the patient is probably not out of hospital yet’,” Smit said.
He added that he truth of the matter is that the economy is overwhelmingly driven by government spending, and where the government is struck by a liquidity crisis, irrespective of the cause, it has a significant effect on the economy.
“It is a truth and cannot be hidden by any measure of grandstanding,” he maintained.
Smit said that while a loan from the African Development Bank (ADB) has eased the government’s liquidity crisis and has no doubt alleviated the dire situation Namibia faces, this action alone is not sustainable.
This, he says, is so because lending money to pay off debt can never be a viable long-term solution.
He said the president’s reference to motor vehicle sales data and building plan registration and construction data is somewhat misleading, and “highly ironic considering that he made reference to fake news in his statement”.
Smit cited IJG Securities reports that new vehicle sales in June 2017 were 24 percent lower than in the corresponding month a year earlier.
Smit said that with the government cutting its capital budget excessively, the construction sector has been the hardest hit, which the Construction Industries Federation (CIF) has made known publicly, and as such the Namibian economy will remain under pressure for a considerate time.
Regarding the SME Bank saga, the DTA mp opined it is quite shocking that President Geingob has suggested that the former chairmen of the liquidated bank, Frans Kapofi and George Simataa, should not be blamed for the calamitous exercise in mismanagement and misappropriation of a public institution’s public resources when each of them had a fiduciary duty respectively towards the SME Bank.
He added it is laughable that President Geingob would regard it as the responsibility of the Bank of Namibia to carry out the duties and responsibilities of the management and board of the SME Bank.
He further questioned whether Geingob is familiar with the contents of the Companies Act, adding that his actions are nothing short of an exercise to protect the politically connected.