Oshikango turns into ghost town

BUSINESS activities at Oshikango in the Ohangwena region are experiencing a huge decline with many businesses lamenting the high tax rates imposed by the government as the main cause.

The Namibia Chamber of Commerce Industry (NCCI) northern branch’s chairperson, Thomas Koneka Iindji, told The Namibian that Oshikango is slowly turning into a ghost town and hundreds of businesses have closed down. The crime rate at Oshikango is also said to have increased due to the high unemployment rate.

“The NCCI has engaged businesspeople and other stakeholders to rescue the situation. In the meantime, we have also appointed industry skilled-based technical advisers for Ohangwena region, Steven Immanuel and Ben Hauwanga, who have been assigned to the Angola trade region to look into means and ways of reviving the situation,” said Iindji.

Oshikango was once a lucrative and attractive business centre, not only for the locals but also for Chinese, Indian, South African, Portuguese, Lebanese, Pakistani and the Iranian businesspeople who have set up businesses at the border town, targeting the Angolan market.

Many of the businesspeople at Oshikango told The Namibian that business has gone down over the years and that the cross-border trade has also declined because of restrictions imposed on the border traders. The business community also complained about the scrapping of incentives by the government.

“The Namibian government has increased taxes recently and the restrictions put in place at the border are tough. They are causing our business activities to slow down gradually,” said a disappointed businessperson who refused to be named.

Iindji said the decline in cross-border trade is mostly because of a number of constraints hampering the export of goods to Angola. Some of the constraints are the scrapping of the 80% export allowance incentive that has been in place since November 2011; the insecure business environment; and the difficulties in obtaining visas faced by foreign businesspeople.

“The border town is exporting goods to Angola. These goods have been and still remain the driving force behind the town’s economy. The development of the town and job security for at least 6 000 people are at risk,” said Iindji.

He further said that the decline in cross-border trade was caused by the de-dollarisation in Angola; trade tariffs; slow declaration and clearance processes; tightened business visa processes; the development of other trade points; and the evolving economic developments in Angola.

A study carried out by the Bank of Namibia in 2011 to examine the key limitations to trade between Namibia and Angola identified the main constraints as the regulation by Namibia that limits the amount of money Angolans may bring into the country; and a lack of banking facilities catering for Namibia and Angola.

Iindji said to tackle issues related to payment and currency, the Bank of Namibia has, in the meantime, met with the Angolan central bank to look into the possibility of using the Angola Kwanza at Helao Nafidi and Oshikango.

“However, so far the Angolan government does not allow its currency to be used outside the Angolan boundaries. If no favourable agreement is reached in this respect, as a second option, an agreement with Standard Bank in Angola might be envisaged to provide Angola citizens with Namibian dollars to make their visit and purchases in Namibia easier,” he said.

Angola’s economy is said to be growing fast with a strong fiscal position, single digit inflation, massive international reserves, and a stable exchange rate.

As a result, the country has diversified its sources of imports and relies less on Oshikango as a source.

“We must exploit other opportunities this region has to offer, including agriculture and agro-processing, aquaculture, manufacturing, tourism and service sectors,” Iindji urged.

When The Namibian visited Oshikango, some of the businesses had already permanently closed down. Amongst those closed are Chinese shops and car dealerships.

The Namibian also found that most of the Chinese businesspeople closing shops at Oshikango have opened new shops in Angolan villages, where business is said to be better than at Oshikango. In addition, some Namibian businesspeople have also moved into Angola. Among these are the BH Motor Spares, KDG Car Dealers and Jupitor Motors.

“Business is going down every day and more families are suffering because there is no money. The youth have lost a lot of opportunities through unemployment.

“Most of the businesses are moving to Angola because the business here is very bad and when business is bad, you cannot sell and you are forced to go and seek for greener pastures elsewhere. Oshikango is slowly dying,” said some businesspeople, who also declined to be named.

“If you come to Oshikango, you will find many trucks queuing at the border. Based on that, one would think Oshikango is very busy, but these trucks are in transit with goods not from Oshikango but from South Africa and elsewhere,” Iindji said.

The Oshikango business community is urging the government to hear their pleas and re-introduce the incentives like free land and low tax rates to boost cross-border trade.

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