Economic watchdog in a financial pinch

NAMIBIA’s main economic watchdog, Nepru, is in a financial crisis that threatens the future of the organisation.

Director of the Namibian Economic Policy Research Unit, Dirk Hansohm, and Finance Manager, Patrick Quinn, confirmed to The Namibian that the organisation had not paid Pay As You Earn (PAYE) taxes deducted from employees for two years until last year, and that it had also not submitted tax returns during the same period. The financial pinch also meant the organisation had not paid out 13th cheques in December to employees in accordance with their conditions of employment.The financial quagmire has been brought to the attention of President Hifikepunye Pohamba and Prime Minister Nahas Angula.Hansohm said Nepru’s income from donors had been reduced from N$10 million to N$8,46 million in 2004 while expenses had increased over the same period.This apparently resulted in Nepru’s former accountant moving funds from one programme area to another and not paying the Receiver of Revenue.”When the new Finance Manager arrived, he detected the irregularities and immediately brought it them to the attention of myself, the board of trustees and the Government,” Hansohm said.Nepru has met with the Receiver’s office to arrange paying off the debt and penalties.Staff had also been promised payment of the 13th cheques due to them as soon as there was money to do so, the Nepru chief said.Hansohm added that a new system had been introduced to prevent similar incidents in the future.Quinn confirmed that Nepru had overdrawn the money it received from Sida by N$800 000 but the research project was continuing until completion later this year.All the money was accounted for, he said.He said when he joined the organisation in April 2005, he played open cards with everyone, including employees, whom he told about the state of Nepru’s finances.They cut the salary bill by N$3,2 million from N$5 million a year and started paying off the Receiver of Revenue.This week Hansohm will travel to Canada to meet donors while a round table will be held in the second week of March to raise funds for the economic watchdog.Although Government is represented on the Nepru board and the organisation provides crucial research information for future decisions, Nepru gets no funding from the State.”The general problem of institutes like Nepru is that multilateral and bilateral donors continuously reduce their commitments for core funding.Yet a research institute such as Nepru that provides public information and capacity building cannot survive without core funding,” Hansohm said.Nepru was set up in 1990 with assistance from the governments of Sweden and Norway.Since 1994, funding has been provided by the African Capacity Building Foundation (ACBF).While grants covered 80 per cent of the organisation’s total budget in 2000, the second grant for the period 2000 to 2005 shrank by 40 per cent and the new grant, which covers 2006 to 2009, will only cover 20 per cent of Nepru’s budget.The Chairperson of the Nepru Board, Dr Zed Ngavirue, is expected to issue a statement on the matter soon.The financial pinch also meant the organisation had not paid out 13th cheques in December to employees in accordance with their conditions of employment.The financial quagmire has been brought to the attention of President Hifikepunye Pohamba and Prime Minister Nahas Angula.Hansohm said Nepru’s income from donors had been reduced from N$10 million to N$8,46 million in 2004 while expenses had increased over the same period.This apparently resulted in Nepru’s former accountant moving funds from one programme area to another and not paying the Receiver of Revenue.”When the new Finance Manager arrived, he detected the irregularities and immediately brought it them to the attention of myself, the board of trustees and the Government,” Hansohm said.Nepru has met with the Receiver’s office to arrange paying off the debt and penalties.Staff had also been promised payment of the 13th cheques due to them as soon as there was money to do so, the Nepru chief said.Hansohm added that a new system had been introduced to prevent similar incidents in the future.Quinn confirmed that Nepru had overdrawn the money it received from Sida by N$800 000 but the research project was continuing until completion later this year.All the money was accounted for, he said.He said when he joined the organisation in April 2005, he played open cards with everyone, including employees, whom he told about the state of Nepru’s finances.They cut the salary bill by N$3,2 million from N$5 million a year and started paying off the Receiver of Revenue.This week Hansohm will travel to Canada to meet donors while a round table will be held in the second week of March to raise funds for the economic watchdog.Although Government is represented on the Nepru board and the organisation provides crucial research information for future decisions, Nepru gets no funding from the State.”The general problem of institutes like Nepru is that multilateral and bilateral donors continuously reduce their commitments for core funding.Yet a research institute such as Nepru that provides public information and capacity building cannot survive without core funding,” Hansohm said.Nepru was set up in 1990 with assistance from the governments of Sweden and Norway.Since 1994, funding has been provided by the African Capacity Building Foundation (ACBF).While grants covered 80 per cent of the organisation’s total budget in 2000, the second grant for the period 2000 to 2005 shrank by 40 per cent and the new grant, which covers 2006 to 2009, will only cover 20 per cent of Nepru’s budget.The Chairperson of the Nepru Board, Dr Zed Ngavirue, is expected to issue a statement on the matter soon.