Chinese retailers in townships raise eyebrows

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Alvine Kapitako

Windhoek-The Namibian Chamber of Commerce and Industry has spoken out against the illegal establishment of Chinese trading shops in informal settlements, contrary to the Foreign Investment Act of 2010 that forbids foreign nationals from engaging in trade reserved for Namibians.

Last year, President Hage Geingob signed into law a provision that would reserve specific sectors for Namibians. The Namibia Investment Promotion Act reserves business activities, such as food take-way businesses, street vending, hairdressing, beauty salons, catering and retail for Namibians.

Despite the existence of the law, a Chinese national recently managed to set up a retail makeshift shop in the informal settlement of Havana, in Windhoek.

The business operates from a corrugated iron shack painted blue and is called Havana China Shop. It sells pots, cellphones, textiles, rollers and other typical cheap imitation merchandise found at many China shops across the country.

Yesterday the chief executive officer of NCCI, Tarah Shaanika, was emphatic that any retail shop set up by a foreign national after 2010, without the consent of the trade minister, is illegal.

“We are not in support of foreign nationals investing in areas that can be done by locals,” Shaanika said. He further said retail shops have a low barrier to enter and must be exclusively reserved for locals.
Shaanika also said many foreign outlets are not issuing tax invoices, which suggests they are not paying tax. As a result, they are depriving government of much-needed revenue.

“Government might be losing revenue and the economy is losing out,” Shaanika said, adding: “We don’t support these type of businesses. They must be closed down or show permission for operating,” he said.
Local businesses often invest in local banks and pay better wages to their employees, compared to some foreign-owned businesses but are shutting down, because of tough competition, Shaanika charged.

Shaanika explained that foreign businesses have access to better funding and oftentimes sell cheap poor quality products. We don’t support these type of businesses,” Shaanika reiterated.

Speaking to New Era recently, an employee of Havana China Shop said she and her other female colleague get along quite well with their employer, who is a Chinese national. Her concern was the long working hours that employees were subjected to.

“We work from 7 am to 6 pm every day. We are even open on public holidays,” she said. “This area is not safe. It is well known for robberies, break-ins and other criminal activities,” the worker added.
She said customers do not necessarily complain about the presence of Chinese-owned shops in Havana. New Era understands that there are two Chinese-owned shops in Havana informal settlement.

“At least they don’t have to walk all the way to China Town or other Chinese retailers in town,” the woman added.
“The customers don’t have a problem with us, but they make negative comments from time to time and this includes questions like ‘is this item fake?’

Havana China Shop started operating in Havana towards the end of last year, said the woman. “The business is not registered. Sometimes the police come here. The last time the police came here they confiscated items from the shop because they are counterfeit,” said the woman.

She also explained that the remuneration package is not sufficient, but for now it’s not the biggest problem.
“But that is not the main problem. I just have a problem that he does not want to abide by the laws of this country and when we advise him to adhere to the rules he thinks that we want to tell him how to run his business,” she said.

The worker added: “We just want him to abide by the rules and to protect his business. He is an easy target of thieves. We don’t even have security guards here and he is the only man, even if we are attacked we won’t overpower the thieves, because we’re two females.”

Meanwhile, the spokesperson of the Ministry of Industrialisations and SME Development, Elijah Mukubond, said Chinese investments have been dominantly in the construction sector. But, with the slowdown in that sector there has been a drop in interest from China to invest in the construction sector.

“They have also been heavily participating in mineral exploration, mining and the retail sector,” said Mukubonda. Moreover, there has been little knowledge, skills and technological transfer to the locals, due to language barriers, poor remuneration and working conditions, as many local graduates opt not take up jobs at Chinese-owned companies or construction sites, Mukubonda observed.

Chinese businesses operating in Namibia have created employment for about 3,500 Namibians in various sectors, Mukubonda added.

“Labour issues, such as poor working conditions and poor compensation, are some of the common issues that Namibian employees indicate as challenges when working for a Chinese-owned company,” he added.

“Chinese businesses are willing to employ Namibians, but the salaries offered and some long working hours without overtime payment would not motivate the local employees to continue working for that company for a very long period of time and there is high employment turnover among locals working for Chinese-owned companies”. Mukubonda further noted.

The Embassy of the People’s Republic of China in Namibia did not respond to questions sent by New Era two weeks ago, despite assurances that they would.

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