Namibia’s Economic Growth Engine

THE MAJORITY OF businesses in Namibia operate in the informal sector.

Their business premises are usually a corner at the residence of the property’s owner, a stall at an open market, or a rickety table on the pavement outside a shopping centre or at the roadside.

The genesis of most Namibians’ entrepreneurial journies is the informal sector, which is also the country’s business incubator where an enterprise culture is spawned, nurtured and developed.

Like them or not, but there is no doubt that informal enterprises are important providers of goods and services in rural areas, settlements, villages and towns across Namibia – and significant contributors to the nation’s gross domestic product too.

It appears that the informal sector is not popular in some quarters and is considered nothing more than a disturbance and a nuisance.

As emerging entrepreneurs and their informal enterprises source products from established businesses, the formal sector generally does not view micro informal enterprises as competitors or a threat.

However, the situation vastly differs in local authorities.

This becomes abundantly clear when attending workshops, meetings and consultative sessions.

Officials and at times even elected leaders openly display hostility and view street vendors as mere violators of municipality by-laws.

One only hears of informal operators posing a potential health or fire hazard or obstructing traffic.

This becomes the justification for creating yet another open market far away from a target market and customers.

Rather than using available funds to construct another open market, why not buy and convert a high-rise building or an underutilised parking lot in the central business district and convert it into a centrally located marketplace?
This seemingly never crosses their minds.

Why not boggles the mind, as this is a local economic development strategy that has been adopted and successfully applied by the local councils of towns and cities in many African countries.

Measured by wealth and job creation, Namibia’s informal sector is a significant contributor, and, as previously highlighted, it is the starting point of most Namibians’ entrepreneurial journies.

Many large businesses began as informal home or cottage industries, and later migrated to the formal sector.

Not only in Namibia, but in countries across the globe.

There is a well-documented case study of two youngsters, both called Steve, who started their entrepreneurial journey as a side hustle.

In 1976 those two Steves, Steve Jobs and Steve Wozniak, launched their enterprise, Apple Computers.

The premises of this corporate giant, today one of the world’s largest businesses, was Jobs’ parents’ garage.

Many successful Namibian enterprises started in a similar manner and as informal enterprises, especially the ones owned by iconic black entrepreneurs.

Nothing has changed. It still happens to this day.

It really is high time the informal sector receives attention. It deserves greater support as Namibia grapples with finding ways to grow its economy.

Ways must also be found to make government and local authority rules and regulations more business-friendly, and programmes should be crafted to accelerate the migration of informal enterprises to mainstream business.

Going forward in the new year, policymakers and implementers should place the informal sector high on the country’s economic development agenda.

• Danny Meyer is reachable at danny@smecompete.com