Rent a Namibian Kills Jobs, Throws Money Out the Window

The Namibian government never learns.

It continues to kill jobs and send money out of the country, paradoxically deploying tools that most countries have successfully used to grow their economies.

Namibia’s public works projects like roads, the Neckartal Dam, fuel storage, government offices and ever-mushrooming parastatals consistently drain taxpayer money, with little to show in terms of job creation and overall improved quality of life.

Namibia remains the second-most unequal society in the world, with the plight of the poor majority getting worse and a few getting rich quickly without dropping a sweat.

Two stories reported by The Namibian news team this week remind us why there is no improvement, despite huge amounts of public money spent.

NamWater awarded a N$935 million purification contract to China’s Shaanxi Construction Engineering Group. The cheapest bidder would have charged the government less than half that amount – N$450 million.

On Wednesday, the High Court dismissed a case by China’s Zhong Mei Engineering Group challenging the Central Procurement Board of Namibia’s decision to award a N$237-million tender to China State Construction Engineering Corporation for the offices of the Namibia Financial Institutions Supervisory Authority (Namfisa).

In both cases, most, if not all the main bidders were non-Namibian and (not surprisingly) Chinese.

In the Namfisa case, it’s worth questioning why the institution must go out of its way to spend so much money on offices while the centre of Windhoek is full of empty buildings.

The customer will end up paying for this REO (return-on-ego) decision.

For decades now, the common explanation by Namibian government leaders on why foreign-owned companies scoop up large and medium public projects is that locals have “no capacity” to tackle such projects because of international criteria.

Namibian companies, especially in the construction industry, argue that criteria are often set in such a way that they will never be able to qualify as main bidders or subcontractors.

NamWater, for example, demands a financial guarantee of N$160 million in cash, annual construction turnover of N$740 million, experience of 15 years as a prime contractor and two contracts completed at cost of N$526 million.

Bear in mind that Namibia’s capital/development budget has been about N$5 billion to N$8 billion a year.

It’s easy to see why foreign entities often rent a Namibian for their bids – because of government rules that a company be ‘locally’ owned.

Some circumvent the Namibian ‘majority ownership’ in the most absurd and dubious ways, like the Zimbabwean father, Cosmas Mukaratirwa, who formed a company and made his five-year-old son the majority owner to be awarded a N$1,3 billion medicine supply contract.

Most governments use public infrastructure spending strategically to develop their citizens and even set long-term internal and foreign policy.

Chinese president Xi Jinping has set up the One Belt Initiative, apparently emulating the United States’ Marshall Plan as part of its plans to dominate world economic and military systems through rebuilding its allies in Europe.

Creating jobs, growing long-term skills so citizens participating in economic activity and improving quality of life through public amenities like sanitation, water and digital platforms should be the bare minimum of Namibia’s strategic focus.

Alas! The country’s hard-earned tax revenue is instead spent hiring companies that often import jobs, including manual labour like some North Koreans and Chinese seen planting grass or working on construction sites.

Namibian construction companies have complained about losing bids to the extent they cannot retain and develop skilled workers.

Reports abound of foreign companies renting Namibians to win contracts and thereafter kicking them out with payouts that the rented locals spend on imported luxury goods.

The authorities last year fined the Zhong Mei Engineering Group for not paying corporate taxes in Namibia between 2013 and 2018, despite them getting a government contract worth nearly N$1 billion.

It’s been 34 years since independence.

Unemployment has ballooned because of school dropouts.

Among the few who make tertiary education level, more and more graduates (some with postgraduate qualifications) are struggling to find employment.
Employers lament the dearth of skills and a culture of low productivity.

Unless government leaders deliberately change their strategy, the unemployment time bomb will destroy the relative peace and tranquility independent Namibia is viewed as having, especially by outsiders and the minority who live affluently.