Joblessness could breed instability…..Can manufacturing and tourism rescue us from the jaws of social instability?

Joblessness could breed instability…..Can manufacturing and tourism rescue us from the jaws of social instability?

Namibia needs to create thousands of jobs to ensure economic, social and political stability. This is because the risks generated by a high level of unemployment are real and have the potential to derail, or even reverse gains the country has made since Independence in 1990.

This stern warning was issued by Minister of Economic Planning and Director General of the National Planning Commission Tom Awleendo to the Bank of Namibia’s annual symposium in Windhoek this week.
“Unemployment creates social exclusion, crime, erosion of social welfare, wearing down of human capital, death, misery and social instability. Prosperity depends on how many people are in employment and how productive they are.

“Equally, productivity rests on skills people possess and how effectively those skills are utilised,” said Alweendo in a statement read on his behalf by Deputy Minister of Economic Planning Lucia Iipumbu.

This year’s symposium had the theme ‘Reducing Unemployment in Namibia: Creating more jobs in the manufacturing and tourism sectors.’

The symposium saw presentations by two of Namibia’s leaders in manufacturing and tourism, Dr Dianna van Schalkwyk, the vice chairperson of the Namibia Manufacturers’ Association, and Manfred Goldbeck, founder and director of The Gondwana Collection, a local hospitality group.

Their presentations looked at how developing the manufacturing and tourism sectors would help in creating employment. While their papers provided the much-needed analytical outlook, they clearly indicated that much work is needed for the two sectors to create employment.

“What is clear, however, is that enhancing our tourism sector’s performance is not a simple task. While our country possesses phenomenal tourism attractions, there are a number of significant challenges that need to be addressed to reach our full potential,” says Goldbeck.

His recommendation is that “greater incentives may encourage the private sector to engage in greater partnership with local communities to unlock the potential of tourism in these areas.”

He also advocated for capacity building – quality hospitality education and training, airport and accommodation infrastructure – as necessary to support growth.

“Capacity building will be needed to support further tourism development. Infrastructure is a critical backbone of the tourism industry. It cannot grow without it,” he said.

Crucially though, for the Namibian tourism sector, says Goldbeck, is that Namibia’s product offering needs to be elevated to stand out in today’s more professional, sophisticated and competitive tourism environment.

“Given that specifically for international travellers the cost of coming to Namibia can be significant, the level of the experience they have, must be considered to be worth it and should compare favourably with similarly-priced destinations,” he says.

“Tourism is furthermore, one of the most sustainable means of income generation at our disposal. Its effect on our land is minimal (compared to mining for example) and in fact encourages the conservation of our country’s natural and cultural heritage.

“Above the value it has added to our economy to date, Namibian tourism holds incredibly more potential to be unlocked. This will however require a more motivating and supportive environment to blossom further,” said Goldbeck.

Alweendo said tourism is not only important to the economy, but has significant potential to contribute to poverty alleviation.

“The tourism sector has demonstrated substantial impact on local people and local economies and Namibia’s tourism sector has potential to expand this impact.

“The impact of the tourism sector on the local economy and on poverty in particularly important as it accommodates the unskilled and semi-skilled in the communities, due to its labour-intensive character. Likewise, the tourism sector’s employment impact can be highly significant in both urban and rural areas,” he said.

Van Schalkwyk said for the country to encourage employment creation in manufacturing sector it needs to have a dialogue between government and the private sector pertaining to uncertainties regarding the availability and costing of utilities, such as water, electricity, and infrastructure.

Van Schalkwyk also called for an avoidance of unwanted policy signals to investors so as to maintain investor confidence and further encouraged the promotion of local manufacturing and the procurement of local products, especially through government tenders.

Her other recommendations include the increased focus on the development of cross-border value chains to stimulate local manufacturing. “The Southern African Customs Union (SACU) agreement is currently being re-negotiated to deepen regional integration. A single country of origin certificate would assist in establishing cross-border value chains,” she said.

Between 1990 and 2015 manufacturing’s contribution to Gross Domestic Product averaged 11.2 percent and during this time the sector recorded a growth rate of only 3.4 percent.

Over the NDP4 period (2012 to 2015) manufacturing contributed 9.9 percent to GDP and the growth rate recorded an average contraction of -2.9 percent.

“NDP 4’s intention was to grow the manufacturing sector to increase its share of GDP in 2010 by 50 percent, which will translate into 18.7 percent share of GDP at the end of NDP4.

“The NDP4, however, coincided with a very challenging global economic environment and with one of the severest droughts to befall Namibia. Nonetheless, it also tells that our strategies on manufacturing ought to have been more effective or implemented better,” said Alweendo.

Growth in the tourism sector recorded better figures than manufacturing. The tourism sector recorded an average growth rate of 6 percent from 1990 to 2015 and 6.9 percent during NDP4. The sector, however, only contributed an average of 1.5 percent and 1.9 percent to GDP over the same periods, respectively.

Alweendo noted that these figures indicate that tourism and manufacturing need to grow more and need to grow faster to make a meaningful impact on unemployment and poverty.

“What it also shows is that challenges preventing growth in the manufacturing and tourism sectors to impact employment and poverty remain. NDP4 has identified key basic enablers, particularly education and skills development and infrastructure development, as key issues that will enable Namibia’s industrialisation,” he said.

“With investor confidence in our country and in the tourism sector, supported by tailor-made incentives, I believe the future for tourism and the Namibian economy is bright. Yet, as we prepare ourselves for the future we need to be ever mindful that this next chapter in our tourism’s evolution is a marathon, and not a sprint. Efficient and effective preparation followed by steady progress is what is needed to finish ahead in this race,” Goldbeck stated.

“Create a national Namibian culture with a need to manufacture what is desired,” van Schalkwyk advised.


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