CAN THE HARAMBEE PROSPERITY PLAN STAND THE TEST OF TIME?

By Penda Jonas Hashoongo
May 2016
Prime Business

The Harambee Prosperity Plan (HPP), which was recently unveiled by President Hage Geingob, is one that offers Namibia a chance at prosperity, but it’s also one that can fall on the wayside given the multifaceted approach of its implementation.

The fourth chapter of the Harambee Prosperity Plan, which focuses on the economic transformation of the country going forward, gives an astute observation about the fact that a significant portion of the country’s population is unable to play an active role in the advancement of the economy as financial inclusion has not yet been attained.

In consideration of the country’s need for macroeconomic stability, the plan has set forth three goals that it aims to achieve by end of the implementation period. These are, in no particular order, the retention of the international BBB- credit ratings, keeping the public debt to GDP ratio at 30% as well as keeping import cover of at least three months over this period.

These measures, although aimed at safeguarding the country’s macro-economic position seem very conservative and appear to be more concerned with the retention of the current macro-economic stance rather than building on it.

The most laudable aspect of the economic advancement section of the HPP appears to be the tightening of controls on expenditure so as to ensure that money, which could be used more optimally in creating employment and safeguarding the livelihoods of underprivileged Namibians is not wasted on the needless procurement of goods and services.

This aspect pays specific consideration to the fact that in the past suppliers of goods and services would often inflate their prices with the aim of profiteering through state resources.

This cost-cutting measure is one that could, if efficiently implemented, enable the government to reapportion these saving towards projects that will create employment opportunities and inadvertently help curb poverty.

The famed ‘Solidarity Wealth Tax’ is a measure aimed at addressing the disparity between the rich and the poor in the country. While the idea behind it is sound, the modalities pertaining to who should be taxed still need to be properly drawn out and they need to reflect the notion that only those who can afford the ‘Solidarity Wealth Tax’ are taxed.

The appropriate definition of affluence will be pivotal in the success of this initiative as setting the threshold too low could easily pull the very people it advocates for into economic turmoil.

Conversely, setting the bar too high may result in the government not collecting enough money to help the plight of the poor since the number of people and corporates being taxed will diminish considerably. In essence, where ‘Solidarity Wealth Tax’ is concerned, the only challenge could be the counter-productive by products that may result from its implementation.

The Plan further suggests the establishment of an independent Revenue Authority. Given the amount of money the government loses each year through ineffectual collection means, this may seem like a prudent idea, however, when one considers the nature in which public enterprises and agencies have toiled to effectively get off the ground after their establishment, it seems ambitious that this Revenue Authority can be expected to be more than just another liability to state coffers in the early stages of the Harambee period.

Economic transformation in the Harambee plan will be measured by its ability to create 9000 jobs from 10 investment projects as well as the manufacturing industry. While a great emphasis has been placed on the need to create employment opportunities as a redress for poverty, the creation of 9000 jobs over the Harambee period appears menial when juxtaposed to the current unemployment figures. The augmentation of SMEs through the Ministry of Industrialization, Trade and SME Development will undoubtedly yield positive results with reference to employment creation however whether these efforts will create enough employment opportunities to make a difference towards the alleviation of poverty remains to be seen.

With the aim of creating a more competitive economy, the Plan aims to address issues including an inadequately educated workforce, access to financing, restrictive labour regulations, poor work ethic, corruption and inefficient government bureaucracy, which have been identified by global rankings systems as the main detractors to the country’s economic competitiveness.

Presumably with the aim of making it easier for local businesses to enhance their production capacities, the Plan also aims to avail serviced land for industry in urban areas with a strong private sector presence.

Implementation
The success of the Harambee Prosperity Plan will undoubtedly fall on the effectiveness on its implementation. The fact that the plan endorses accountability as a key pillar should place it in good stead for success since the reason for the failure of previous plans akin to it in nature were closely aligned to a lack of monitoring.

The Targeted Intervention Plan for Employment and Economic Growth (TIPEEG), which was considered by most as a resounding failure after only managing to create about 100 000 jobs in total, some of which were temporary, is one those tasked with the implementation of the HPP can look at and learn from.

While the overall plan appears ambitious given the type of effectiveness of governance that Namibians have become accustomed to, implementation may prove more difficult than projected since the plan will still rely on the same people and agencies who failed to deliver one the previous economic plans to execute the Harambee Prosperity Plan effortlessly. The first year of the Harambee period may serve as an accurate indicator of how the Plan will fare, particularly when one takes into consideration the fact that it is the year when most of the strategies are expected to be put in place.

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