WINDHOEK – As the private sector makes the biggest contribution to Namibia’s Gross Domestic Product (GDP), this sector holds tremendous power to significantly influence the fight to tackle corruption. Namibia’s public sector contributes 26.5 per cent to GDP with the main contributors within the sector being services (65.6 per cent), industry (29 per cent), mining (11.5 per cent), and agriculture (5.5 per cent).
The private sector includes a wide range of businesses such as banks, retail and textile, multinationals, corporates and/or private companies, pharmaceuticals, lawyers, medical doctors and dentists, mining, construction, manufacturing, logistics, tourism, travel and hotel business, farming, Small and Medium Enterprises (SMEs), close corporations, one-person businesses, State-Owned Enterprises (SOEs) and Non-Governmental Organisations (NGOs).
In an Institute for Public Policy Research (IPPR) paper released last week, titled ‘The role of the private sector in tackling corruption’, local academic, Johan Coetzee, noted that because of the contraction of the local economy since the second quarter of 2016, it can be deduced that the private sector is feeling relatively insecure about future business prospects.
“There is insecurity about, for example, the level of government spending, its exposure to foreign debt, ability to repay its debt, its cash flow situation and the credit down gradings by Moody’s and Fitch Ratings. Other factors creating insecurity includes the implementation of the New Equitable Economic Empowerment Framework (NEEEF) and the Namibia Investment Promotion Act (NIPA), the delayed forthcoming land conference, limited transparency about public documents, limited accountability of political and public office bearers, and a long-term increase in the monetary value (magnitude) of corruption cases,” reads the paper.
Coetzee added that from the discussions so far, it could be deduced that the private sector is experiencing numerous challenges, including corruption and mismanagement of public funds, which in itself is a form of corruption.
The most common forms of corruption identified in the private sector include bribes, facilitation of payments, conflicts of interest, gifts, hospitality and paying of expenses. All manifestations of corruption where money is involved are also more specifically known as fraud. Facilitation of payments can include under-invoicing, double invoicing and multiple invoicing with the aim of misleading the revenue authority. Other forms of corruption, especially in tendering, include bid rigging, market division, colluding and kickbacks.
“Since the public sector neither has the political backing nor the capacity to tackle corruption in the public sector, such as in cleaning up public procurement, improving the struggling performance of SOEs (most of which are monopolies with very limited competition), it is recommended that the private sector initiates voluntary regulation of its various and diverse industries to comply with the NamCode to improve corporate social responsibility,” Coetzee recommended.
He noted that the private sector can get its own house in order in incentivising individuals to refrain from corruption through its associations, such as the Namibian Employers’ Federation (NEF) and the Construction Industries Federation of Namibia (CIF), it can put pressure on government to reform the public sector.