RETAIL CHARTER REQUIRES URGENT REFORM: NCCI

Namibia Chamber of Commerce and Industry (NCCI) Chief Executive Officer (CEO) Tarah Shaanika has emphasised the need for the Retail Charter to compete and make deliberate efforts to increase the stocking of local products on the shelves.

Shaanika stresses that more efforts need to be taken to control the import of goods that Namibia is able to produce and stock in the retail market.

“I think the challenge is that retail sector is controlled from outside and Namibian buyers are not based in Namibia, therefore the retail charter need to compete and make deliberate efforts to increase the stocking of local products on the shelves,” he says.

Shaanika further argues that the Retail Charter needs to be regulated in order for the local producers to meet the requirements which leads to creating jobs in the country.

The NCCI president says that local producers have the potential to produce quality products however chance should be given for them to grow.

“Quality of products is not an issue, I believe the quality is there but many retailers do not even bother to look at the products for consideration, however there should be a strict control of retail requirements that they must comply and make sure retailers stock Namibian products first before importing,” he says.

Shaanika also explains that there should be programs introduced targeting local products as well to promote more local products in the market.

Shaanika also believes that although Namibian products are of good quality, there should be a strong supporting system from the Namibian people.

Aside from quality control issues, large retailers have argued that local SMEs simply do not have the capacity to meet the volumes of products required, or keep up with customers changing needs.

However, Shaanika believes that local SMEs could in fact meet customer’s needs, but he conceded that capacity was the major prohibiting factor, due to a lack of access to capital and lack of opportunity.

Though few Namibians complain about local products being expensive, he says that, “People must also understand that the Namibian products are expensive because reducing their price to a small market does not encourage growth, it is unfair to compare an upcoming producer to a producer who have been producing for years from South Africa.”

In the same light he says that, SME retailers find it hard to compete with larger retailers because they cannot afford to sell their stock at low prices.
“The fact that smaller retailers do not have the luxury of making favourable payment options compounded the problem because they often had to pay local producers in cash up front, Shaanika notes.

Therefore smaller Namibian retailers could not ask producers for discounts because they purchase products in smaller quantities.

However Shaanika reveals that that the unfair negotiations gives retailers an unfair advantage,

He further explains that, “larger retailers had their own distribution networks and suppliers in their countries of origin.”

“Often, Namibian producers send their products to South Africa, resulting in the stock being reimported and redistributed into the country on large retailers’ shelves,” he says.

He also emphasise that if the country wants to see growth in local production, people should be prepared to swallow that bitter pill and buy a Namibian product to enable local producers to compete to an international level.

The NCCI president also urge local people to not walk pass a Namibian product but rather use the extra N1.00 to purchase a local product because it’s not always that expensive.

According to a report the retail charter strategy was initiated in 2013 aimed to stimulate local manufacturing, facilitate meaningful job creation, reduce unemployment, and deliver enduring changes in consumption patterns and to establish a service charter for the retail sector that will force merchants to stock locally-produced products, however the issue continues to be  a challenge.

Although there is still limited space for Namibian products, the charter seemed to be promoting transparency and fairness in procurement procedures, in terms of credit and payment, and rebate provisions making sure that no discriminatory practices are implemented against local suppliers.

However, there is still a lot to be done to make sure that SME’s get a fair chance to stock their products in shops like Shoprite, checkers and Pick n Pay and other local shops.