12 Friday, March 9 2018 | NEW ERA 2080318 Budget is about Namibia’s posterity and not the numbers The last two years have taught Namibians a crucial lesson, one that was always there but perhaps overlooked: the tabling of a budget in Parliament is neither a statement of how a government allocates money in the amounts of money allocated or billions, to strictly serve as an indication of assurance of dealing with whatever social evil is confronting Namibia. No, the Budget Statement by the Finance Minister in Parlia- stance backed up by a set of projections, with some arithmetic calculations of numbers and dollars, on how Namibia intends to survive, in 12 months and 36 months, as a sovereign in a globalised world. The N billion price tag, and its allocation, is meaningless if well articulated or lack foundation. And Finance Minister Calle Schlettwein made it clear this week that it would be a craven ab- moral obligation to simply keep throwing money at our problems. Schlettwein pointed at various lessons learnt from the previous going forward the focus is on addressing the long-term answer host of structural policy reforms. “Alongside expenditure-based measures, there are key structural policy reforms which are critical in their contribution to economic activity, reinforcing the impact of the successful implementation of emphasised the minister. Heaven knows there have been enough multibillion-dollar economic interventions that came short of And he went on to articulate a host of new structural policy reforms, many of which have been long overdue. The repeal of the Export Processing Zone Act, for instance, could not have come at a better time. And so is the implementation of public asset management. British statesman William E Gladstone and Roman politician and lawyer Cicero were correct in observing that a budget must be used not as demonstration of arithmetic numbers but to help bring about prosperity to citizens; that politicians should not be as arrogant so as to point at numbers to get votes but ensure that they work to keep a country well fed, and far from bankruptcy. Attend to the elephant problems in Omatjette No redline for fruits and vegetables exists The Ministry of Agriculture, Water and Forestry (MAWF) hereby responds to the newspaper article that appeared in the New Era of the 22 February 2018 with the caption “ Redline haunts small-scale farmers.” You are kindly informed that Namibia does not have a redline for fruits and vegetables to reach the other parts of the country. On the contrary, the ministry is mandated to increase food production at national and household level in order to ensure food security and food self- development. The restrictions on movement of certain fruits and vegetables, namely mango fruits, are simply meant to facilitate sustainable trade. veillance program since the invasion of The ministry through the Division of Plant Health has embarked on the national surveillance program throughout the country to monitor and control the fruits. Currently the ministry is monitoring the range and distribution which are hotspot areas through the setting-up of 600 traps. Farmers have been trained and advised In this regard so far, there is no fruit country notably from Rehoboth, Mariental up to Noordoewer. Therefore, due to the grape and date production, which is exported outside the country, restricted movement of commodities are put in place in those areas to ensure compliance to the import requirements of the receiving country. Export requirements for vegetables to South Africa are set by South Africa. As such the ministry issues the conditions required by the importing country. The ministry through the Directorate of Agricultural Production, Extension and Engineering Services (DAPEES) has established the Plant Health Division which is responsible for the plant health aspects including preventing, controlling pests as well as diseases in the country. The broad objectives of the Division are twofold: from agricultural pests and diseases and to provide for the registration of agricultural remedies, animal feeds, animal feed establishments; fertilisers, fertiliser establishments, pet foods, pet food establishments, and sterilising units in order to promote human, animal and plant safety; to promote animal production and performance; to enhance agricultural production and to provide for matters incidental thereto. Permanent Secretary, Ministry of Agriculture Percy W. Misika ternational Standard for Phytosanitary Measures prescribed by the International Plant Protection Convention for Export Despite being responsible for managing and combating any pests and diseases in the country, MAWF does not control the movement of local commodities within the country. Most of the plant and plant products produced in the northern part of the country are traded to other parts of the country without any restrictions attached to it. However, restriction measures are put in place and where a transboundary pest of economic importance has been ministry to put up measures to control and contain the pest, to avoid spreading of crop pests and diseases to other production areas, where they do not occur in order to facilitate sustainable trade. Dear Editor and wild animals such as lions, leopards and especially elephants, in the Omatjette communal area, has reached alarming proportions. The elephants destroy everything in their path, such as houses, borehole installations, fences and gardens. Unfortunately, there has so far been no compensation for the loss of lives and prop- the Parliamentary Standing Committee on Habitat held consultations with the community, and promised to escalate this matter to Cabinet, but nothing has happened to date. A director in the Ministry of Environment and Tourism, Dr Colgar Sikopo, was quoted in the media as saying that the N0,000 that was generated from the culling of one elephant will be used to build fences around some of the homesteads that are in the migratory paths of the elephants, as well as to construct a transformer to provide electricity so that the lights at night will keep the elephants away. However, the problem is that the elephants keep changing their migratory paths depending on the availability of water and the nature of the obstacles along the way. They will thus just move to another village that has no fences, assuming that the fences are effective. So, the question is whether the government will be able to afford to build fences around all the homesteads in the entire communal area. The most permanent solution will be for the government to relocate these elephants (currently estimated Instead of providing half a solution of fences around some homesteads, the government can instead use those funds to build a proper fence around Etosha in order to keep these beasts inside Etosha where they belong. Alternatively, the government can convert the entire Omatjette communal area into a habitat for elephants, but then they will have to resettle all the farmers to another suitable area where they can farm peacefully and sustainably away from the scourge of elephants. The current communal area is drought-stricken and is now forced to share the limited pastures with elephants, which is obviously not sustainable. If this situation is not resolved on an urgent basis, the Omatjette farmers shall be left with no option but to approach the head of state. Unfortunately, if all these efforts fail, then the farmers shall be forced to take the law into their own hands to deal with the scourge of elephants by any means necessary. Rikondononee Upendura Katjatenja, Spokesperson for No More Elephant Group
thought leaders Councillor must come out clean on selling state land Page 15 Credit rating agencies and climate change: The next headache for bond issuers in developing countries *Benedict Libanda A new report published by Moody’s on 1 D e c e m b e r 2 0 1 7 outlines how the credit rating agency will evaluate the impact of climate change in its ratings for bond issuers. Although the report focuses squarely on the United States of America, it is highly likely to be a yardstick for future global credit ratings. Standard and Poor’s Global climate change and efforts to prevent it have created additional risks that are S&P’s ratings. Already in 2016, S&P warned that countries risk credit downgrades because of climate change with reference to the Caribbean and Southeast Asian countries. default on loans or bonds. A lower rating indicates to lenders that there is a higher risk of default, so countries with unfavourable ratings often have to pay higher interest rates. What does this have to do with climate change, you may ask? Well, climate change has contributed to more frequent and severe natural disasters such as tropical storms, floods and droughts. These disasters disrupt global supply chains, reducing sovereign credit quality. Insurance companies for example are likely to be exposed to a greater degree of catastrophe risk, increasing payouts and reducing profits over the medium-to-long term. The frequency and intensity of extreme weather events – waves and droughts – is likely to increase with the rise in global average temperature. Recognising the importance of mitigation (reducing greenhouse gases) and adaptation (building resilience) strategies to avoid the worst impacts of climate change, Moody’s has listed six indicators that the agency uses to “assess the exposure and overall susceptibility to the physical effects of climate change”. They include the share of economic activity that comes from coastal areas, hurricane and extreme weather damage as a share of the economy, and the share drought-affected areas. The key rating metric is the probability of default, which is highly influenced by both fiscal (government Climate change-related shocks can both cause governments’ to spend more than they ideally should (i.e. more or less as much money as they collect in tax over the long term) but can also reduce growth. This is a double-whammy effect on creditworthiness, as debt levels increase and with lower growth, the ability to service that debt decreases. The report explains how the credit agency factors these impacts into its analysis of an and capital infrastructure, as well as management’s ability to marshal resources and implement strategies to drive recovery. For issuers, the availability of state resources is a key element that improves the response capabilities of governments and their ability to mitigate credit impacts. Moody’s analysis weighs the impact of climate risks on countries’ preparedness and planning for these changes while analysing credit ratings. Extreme weather events an issuer’s infrastructure, agriculture, economy and revenue base, and environment. One of the criticisms of the methodology is that credit rating agencies tend to consider a shorter time frame in their whilst the risks associated with climate change tend to be longer term, ten years or more. Hence, even if the appropriate risks were considered, rating agencies may not be assessing these within an appropriate time horizon. Although Moody makes a distinction between climate trends – long-term shifts in the climate over several decades – and climate shocks, defined as extreme weather events exacerbated by climate trends; there is still ambiguity combined with the challenges associated with the broader risks of climate change and their implications for bond issuers. As a result, where countries are exposed to climate change risks, the credit agency will be contributing to If the market is shocked into realising this suddenly then the value of sovereign bonds (particularly in the energy sector) could deteriorate dramatically, just as sub-prime assets became worthless during the credit crisis. To change any country’s credit rating based on its vulnerability to climate change, noting that the complexity of the phenomenon nation. Developing countries will, therefore, be highly disadvantaged with the ratings, as they have limited means and capacities to avert the impacts of climate change while developed countries stand to receive high ratings on their bond simply because they are less vulnerable and have the technology, institutions and means to rapidly recover from natural disaster eventualities. It is not surprising that the most vulnerable countries are poor, agricultural-intensive nations located in regions of the world already prone to hurricanes, persistent context of the agricultural sector in Southern African region including Namibia, four worst-case scenario, the region will lose between 27–32 percent for maize, sorghum, millet and groundnut for a warming of about 2°C above pre-industrial levels by mid-century. In light of credit rating agencies and this scenario suggests additional risks on credit rating in the region because the developmental agenda is likely to be affected through the deviation of financial resources towards addressing humanitarian relief measures. To mitigate the possibilities of being downgraded based on level of exposure to climate change risks, countries should seize the opportunity of capitalising on the workstreams and negotiation programmes under the United Nations Convention on Climate Change. The Loss and Damage workstream for instance considers approaches to address loss and damage associated with climate change impacts in developing countries that are particularly vulnerable to the adverse effects of climate change. Some of the Multilateral Climate Funds formed under the convention have the capacity to design hedging instruments for developing countries to mitigate climate risks on their bond issuance in that regards. At national level, it is highly important that responsive climate change policies are designed and appropriately implemented to demonstrate preparedness, pliability, and resilience. The National Adaptation Plans and Programmes of Action under the convention enable least developed country parties to formulate and implement interventions as a mean of identifying medium- and longterm adaptation needs and developing and implementation strategies and programmes to address those needs. Moreover, national institutions that trade in primary production economies should be adequately resourced to climate-proof tangible and intangible assets within those sectors. Countries should also have disaster risk management facilities or funds that are well capitalized and managed sustainably as they aid their efforts to enhance preparedness. Finally, mainstreaming and incorporating climate change risk into planning and budgeting process as well as national development programmes is key towards resilience and attaining a sound credit rating. This is in view that countries will be required to disclose such information and demonstrate preparedness in order to avoid credit downgrades. *Benedict Libanda is the NEEEF is pro-rich blacks The New Equitable Economic Empowerment Framework (NEEEF) is pro-black but not pro-poor. It favours the previously disadvantaged instead of the presently disadvantaged. We need to understand that we cannot be limited to seeing our national problems through the spectrum of race. Rather, our reality is of an economic order that is divided between the haves and have-nots. It is the upliftment of the have-nots – in terms of access to opportunities, decent housing, and quality education, access to capital and land – that should receive prominence in the drafting of our laws. The colour line is but a deviation from the reality and seeks to promote capricious arbitrary constructs of race. Truth be told, in Namibia, the racial Vitalio Angula divide is not as prominent as the socioeconomic divide and this should be the focus of any changes that will still be made to the NEEEF draft bill. The proposed ownership restrictions for private sector enterprises as per PART 6 of NEEEF draft bill seeks to impose 25 percent ownership by racially disadvantaged persons. However, it should be noted that it is only ‘currently advantaged previously disadvantaged persons, who will be in a position to acquire stakes in these companies defeating one of the objectives of the bill, which is addressing inequality across all spheres of society. The danger lies in cultivating a culture of window requirement. The law also tacitly suggests that because of the historical injustice of apartheid, even if we were to give black people education, skills training and capital, due to their inherent blackness, it is still impossible for them to partake on an equal footing with whites in business. This is a lie that has been proven time and again, seeing that a lot of black people have actually done well for themselves in an independent Namibia. In instances where government tenders and the exploitation of natural resources are concerned, 25 percent ownership or even more should be a necessary requirement. However, it should accrue to the communities where the exploitation of these natural resources is taking place and to the employees of these companies through employee shareholding where government tenders are concerned. That is the only way that monetary wealth will trickle down to the members of society, who are truly in need of empowerment. Another bone of contention arises in the establishment of an Empowerment Advisory Council, which will be made up of Cabinet ministers responsible for economic sectors such as economic planning, etc. When one studies the envisaged functions of this council juxtaposed with the functions of the envisaged Economic Empowerment Commission you will notice duplication and overlapping of responsibilities. Seeing that ministers are merely political appointees and not necessarily experts in the sciences, it would be advisable to scrap the council and have the commission report directly to the appointing authority. This would lighten the bureaucracy and further empower the commission to carry out its mandate unhindered. NEEEF is a necessary tool to tackle inequalities in the distribution of wealth in Namibia, however, in its current format, it is riddled addressed. The bill should not be passed unless it can articulate and expound on how those who are truly in need of empowerment such as the poorly paid employees on the lowest strata of the economic food chain and the communities from which natural resources are extracted will be empowered. It should also make on a continuous basis of its successful implementation or failure. The head of an Economic Empowerment Commission should be equipped with the necessary skills and know-how to monitor and report through tracking on a daily basis whether the objective of the bill is being realised from the moment it is enacted and suggest amendments to the bill to rectify anything that may have been overlooked in its drafting. Black Economic Empowerment policies and laws as a way of addressing inequalities that have come about because of historical injustices. However, the draft NEEEF Bill I cannot support because it does not address the plight of those who are most in need of empowerment.