Oshikango economy goes from bad to worse
29 April 2016 | Business
Export, wholesale and retail businesses are closing at an alarming rate following a drastic decline in customers from Namibia’s northern neighbour.
At least 50% of Chinese-owned shops have closed. Many of those that remain have retrenched their Namibian workers.
“Many Chinese-owned shops have closed their doors while others have reduced their Namibian workforce. In most shops around here only Chinese nationals remain,” said a security guard at one of the Chinese-owned shops, who was only prepared to identify himself as Erastus.
Another Chinese shop employee, Nikodemus Andreas, said he has been working for his current employer for 10 years.
“Things were going well until last year. What is happening now is shocking. The crisis started when the number of our Angolan customers started falling because of the state of affairs in Angola,” he said.
He further said that the Chinese businesspeople who closed their shops have not left the country. “Some moved either to Oshakati or to Outapi where business prospects are still good,” he said.
Export businesses in the Oshikango EPZ (Economic Processing Zone) are also badly affected.
Speaking to Ewi lyaNooli on condition of anonymity, a junior manager of Sigma Trading said the Oshikango business community did everything possible to avert the worst, but there appeared to be no solution to the crisis. “Only a lot of promises from government,” he said.
He said it was easy for the Chinese shop owners to just pack and go but the businesses in the EPZ could not just move out like that.
“We will wait until June but if things do not improve we will, unfortunately, also have no other alternative but to close,” he said.
This state of affairs at Oshikango is ascribed to the devaluation of the Angolan kwanza, apparently precipitated by a sharp drop in crude oil prices.
The Angolan kwanza has depreciated further against the Namibia dollar, currently standing at N$1/KZ29 compared to N$1/KZ25 a month ago.
This depreciation of the Angolan currency and the alleged failure by many Angolan employers to pay workers’ salaries have eroded Angolans’ buying power.
Diamond Bhanji of the Ezzy Import and Export CC said the crisis did not only affect Oshikango. “This is not about Namibia and Angola either. This is a global economic crisis. All exporting countries are in trouble,” he said.
He detailed how the current crisis directly and indirectly affected an entire chain of businesses in Namibia.
“We here at Oshikango are not doing business. We are therefore no longer importing goods. This in turn affects TransNamib and NamPort, and the government also loses out on import taxes,” he said.
He further said that at the local level, the crisis affected all kinds of businesses.
“Foreign buyers who used to book into local hotels are no more. They also used to buy their groceries from local supermarkets, had their hair done at local salons and filled up their cars at local service stations. All those businesses are losing out now,” he said.
Bhanji said neither the Namibian nor the Angolan government was to blame for the crisis.
He said the Namibian government, through the relevant ministries and the Offshore Development Company (ODC), was doing its best to help the businesses at Oshiakango EPZ.
The ODC board has accepted a request from the EPZ businesses and has reduced their rent for warehouses, office space and houses.
The reduction came into effect on 1 March 2016.
“We trust that the revised rental rates will bring some relief in your operations and wish you success in your business endeavour,” said Phillip Namundjebo, the acting chief executive officer of the ODC in a letter seen by Ewi lyaNooli.
Car dealer Tarek Sbeiti of Byblos Motor Trading said the situation was going from bad to worse.
He said the currency-conversion agreement between the Bank of Namibia and Banco Nacional de Angola was a good idea that would have benefited Oshikango in the long run, but its implementation was catastrophic and contributed to the current crisis.
“Unscrupulous people came from nowhere with bags and suitcases full of Angolan kwanzas, exploited the system and disappeared,” he said.
He said such people were not exchanging Namibian dollars to buy here but rather to take the money to a thriving black market across the border.
“This appears to have been a carefully planned sabotage and needs to be investigated,” he said.