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New Era Newspaper Wednesday March 7, 2018

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8 THOUGHT LEADERS

8 THOUGHT LEADERS Wednesday, March 7 2018 | NEW ERA Open letter to Ambassador Christian Schlaga I am a descendant of the victims of the extermination orders by Imperial Germany aimed at Ovaherero and Nama, which constitutes an act of genocide by virtue of international statutes. I start off my response to you in this way in order to deal upfront with your closing question: what drives me to have written such “outrageous and preposterous” statements in my column two weeks ago. In your remarks you attempt to distance yourself from the statement of the Namibian Sun nwspaper written by Jemima Beukes and published on 4th August 2017. Conventionally, when there is a misrepresentation in the media, which happens often, the aggrieved party complains with the medium in question and demands a public retraction. This you did not do and now that seven months later your remarks have become a matter for public interest, you vainly attempt to push them aside. I maintain that the statement that was published by the Namibian Sun on 4th August 2017 and attributed to you, which statement said that “Germany believes that the atrocities committed against the Nama and Ovaherero people during the 1904-1907 genocide reveals the extent to which you, Your Excellency, and the German government have no remorse, because to you and the government you represent, these outrageous and nothing preposterous about what I said in response to your very dangerous statements. The Nama and Ovaherero have over the years implored the German government to take center stage so that discussions can start, in conformity with and the Hague Conventions, to which Germany is signatory and which conventions guide the handling of genocide and reparations globally. Your government has side-stepped these provisions and continues to reduce the genocide and reparations drive to the level of longstanding bilateral relations and development assistance to Namibia, an attitude that reinforces charges that bilateral aid to Namibia regards the genocide and reparations agenda as void. When I in 2016 wrote you an open letter which you received, I referred to the said report and in humility requested you to express yourself and your silence to date has enhanced confusion and entrenched suspicions on the honorability of the motives for the German government’s reluctance to engage the leaders of the victim communities in negotiations for reparations. With your statement in the Namibian Sun as backdrop, it goes without saying that the German regime has no interest in genocide discussions and has no commitment to any negotiations with the victim communities and their government on genocide and reparations. The actual motives of the German regime are encapsulated in your reported statement that as far as the German regime is concerned, the extermination orders of the Nama and Ovaherero, believe they were in self-defense. So my write-up that Germany remains distant on reparations is closer to the truth than your denials, because already in your use of the word ‘genocide’. Namibia’s parliament had in September 2006 adopted a resolution that charged Germany with genocide, confirmed the plight of the Nama and Ovaherero for reparations and enjoined the government of Namibia to remain an interested party in the charges and demands in question. The envisaged role of the government of Namibia was further expressed by then Minister of Foreign Affairs Minister Utoni Nujoma, when he said that he saw the role of the Namibian government as mediator between the German government and the Namibian communities affected by the genocide. Yet your government has refused to talk to the leaders of the victim communities and as we speak they are elbowed out of the Windhoek accords, much to their consternation. This modus operandi must have left the Namibian legislature shell-shocked and the international community amazed into obscurity. But even more, whereas Namibia’s legislature has passed a resolution to guide their government on how to deal with the genocide and reparations matters, the German government has to date not legislated on these matters. Namibia and intimated an apology for the genocide, she was rebuked sharply by the German legislature and subsequently lost her position. When the president of the German parliament said in public that what had happened in South West Africa at the time has no other name than genocide, he was shunned. The motion by German opposition parties on genocide was rejected by the German parliament, because Germany has no commitment to redressing Namibia’s past pertaining to the extermination orders and the concomitant expropriations of properties and displacement of the Herero and Nama of South West Africa of the time. Now you understand why I take your statement seriously, because it is in tandem with your tactics. The truth is that, Germany is not interested in genocide but atrocities. Germany is not interested in reparations but in development aid. Evidently this let me assure you Your Excellency, that the future will not be what it had been all along. NEEEF: The implications of legislating the poor into prosperity With a possible exception of Zimbabwe, Africa has known fewer occasions where white Africans really got involved in how black governments run the affairs of the countries they live in. The only time they get involved is when a particular government is pursuing a policy that threatens their livelihood, especially if it is about wealth re-distribution or land expropriation. We are witnessing polarising and contentious moments in both Namibia and our immediate neighbour, South Africa. While Namibia is pursuing a policy that seeks to re-distribute wealth, which is undeniably and hugely concentrated into the hands of a few white citizens, South Africa is exploring the route of expropriating land without compensation. The Namibian government, with good intentions, is hell-bent on making the New Equitable Economic Empowerment Framework (NEEEF) see the light of day, to the chagrin of white citizens. What is irksome to them, as has been widely reported, is that NEEEF envisages to make it mandatory for white-owned businesses to sell at least 25% of their shares to black Namibians. While ignoring the tragic past that has haunted, for decades, Namibia’s economic turn-around in relation to wealth re-distribution while perpetuating white economic supremacy, a large part of the white community has labelled - and understandably so - this policy as vindictive and a punishment to success. What cannot be denied in modern economies is that there is no way one can make a certain quarter of the population better-off without making another quarter The apartheid regime pursued policies that the results of which are still visible in our skewed economy today. Perhaps I should confront the possible consequences which the government needs to be prepared for by implementing NEEEF. I will bring those consequences to the fore by narrating my encounter with a Zimbabwean on board a plane from Windhoek to Jo’burg. He made a statement that he had never failed a single student before, but had recently failed an entire class. This, he said, happened because his class had insisted that socialism works better than capitalism, and that no one would be poor and no one would be rich in a socialist state. Socialism is the greatest equaliser, they argued. This resonates with Namibia’s wealth re-distribution attempt. The Professor, apparently, said: “Okay, we will have an experiment in this class on socialism. All grades in your tests will be averaged, and everyone will receive the same grade so that no one will fail and no one will receive an A”. To prove their point, the whole class, apparently, agreed. were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy (free-riding). In the second test, the students who studied little had studied even less, and the ones who studied hard decided they wanted a free ride too so, they too studied little. The second test’s average was a D and no one was happy. When the 3rd test came, the average was an F. As the tests proceeded, the scores never improved as the bickering, blame games and name-calling resulted in hard feelings and no one would study for To their greatest surprise, all failed and the Professor told them that socialism would also, ultimately, fail because when the reward is great, the effort to succeed is great, but when government takes all the rewards away, no one will try or want to succeed. It is a pity that this class had to learn socialism the hard way. Hypothetical or real, I found the story not only interesting, but also sensible. A few Economic lessons can be deduced from this story in the context of NEEEF: (1) It is impossible to legislate the poor into prosperity without, to some degree, legislating the wealthy out of prosperity; (2) What one person receives without working for, another person must work for without receiving; (3) The government cannot give take from somebody else; (4) One cannot multiply wealth by dividing it (capitalist perspective); (5) When half the people get the idea that they do not have to work because the other half will take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work hard for, that is where hard work ends. It is just human nature. to these realities. Petrus Exile Ya Nuuyoma Now open in Outapi! Visit the new GIPF office in Outapi, where we are excited to give you quick and friendly assistance with: • Your biometric GIPF Smart Card • Your pension benefits • How and when to claim these benefits • How to prepare for retirement • Updates on your membership status • Printout your benefits statement • Progress of your claim Visit us at Shop No. 8, Oluzizi Complex, Outapi Main Road Monday to Friday: 08:00 – 13:00 14:00 – 16:30 *Closed during lunch, weekends and public holidays. Visit www.gipf.com.na

NEW ERA Standard Bank moving you forward with PayPulse Page 10 INSIDE USINESS This news is your business Taxing the informal economy: Challenges and possibilities Edgar Brandt Windhoek While some economic analysts have in the past called for government to formalise the informal sector in order to broaden the tax base, others have cautioned that this can only happen if the informal sector is regulated. However, the conundrum facing regulators is that by its very segment of the economy which is neither regulated nor protected by the state. It goes without saying having a more formal economy is preferred as businesses in that space pay taxes and taxes in turn pay for public services. It is estimated that formal jobs pay up to 20 times more than more likely to innovate, grow and export. Also, due to its very nature, informal businesses generally operate outside the rules, whether by dodging taxes or by avoiding regulations. Local economists agree that the informal sector’s contribution to Namibia’s economic growth and activity, it is clear that the sector is significant to the economy, Claudia Boamah, an economist at Capricorn Asset Management, noted that it is clear that this sector is important in Namibia. “The visible existence of the duality of the Namibian economy points to indeed exists,” she told Inside Business. “A significant number of households in Namibia depend on the informal sector for their livelihood and for education of their children, amongst other responsibilities.” Boamah thus feels the informal sector should not be taxed. “Tax implies regulation. The growth and operations of those businesses can be monitored, if they eventually meet the criteria of formal enterprises, the idea of taxing them can be visited.” “Considering that a third of those willing and able to work cannot the informal sector is of great importance. The Namibia Statistics Agency’s Labour Force Survey shows an informal employment rate of 66.5 percent. Aside from employment creation, the informal economy also contributes towards the attainment of poverty reduction,” Baomah added. Mally Likukela, the managing director of Twilight Capital Consulting, pointed out that the majority of people in rural areas are fully engaged in these socalled ‘informal activities’ which employment in the country. “I fully agree that government should tax the sector but on condition that government supports the sector as well. Government should formalise the sector and accord a similar protection it accords to the formal sector. The cost of doing business policies for the informal sector must be pursued to make sure that the sector thrives and is able to honour tax obligations,” said Likukela. His only concern, he added, was data on the sector, the cost of taxing the sector could be more than the before they start to tax this sector, or else it will cost government more and also hurt the sector more as the wrong application of the tax regime could hurt the sector more,” he warned. Veteran economist and former executive director of the Economic Association of Namibia, Klaus Schade, weighed in on the debate to say that while there are no concrete of the informal economy, estimates suggest that it is at least 10 percent. “Any efforts to tax the informal economy need to balance costs and benefits. Since these are unregistered, often micro and small businesses, it will be quite labour intensive to identify and visit them. Moreover, informal businesses often do not keep record of their income and expenditure and hence it will be challenging to estimate commented. A recent report by the African Development Bank, titled “Recognising Africa’s Informal Sector,” found that the informal sector contributes about 55 per cent of Sub-Saharan Africa’s GDP and 80 per cent of the labour force. While some are advocating for the taxation of the informal sector, arguing that it could result in growth for the local economy, employment and wealth creation and ultimately improved revenue for government, other economists have cautioned that a large number of those operating in the informal sector earn considerably less than the minimum thresholds for the various forms of tax, particularly income and value added tax. Peuyehafo Shapange, a hair stylist at Soweto Market, said informal traders do not reach the threshold for taxation and should not be taxed. Aloisius Lazarus from Exclusive Classic Computers in Katutura, said informal businesses should not pay tax due to the minimal income they make. Hezekiel Michael, who owns Divine Design Manufacturing and Upholstery, said informal businesses are paying VAT already which he feels is enough of a contribution to State coffers. Rosalia Ndove, an informal trader in Katutura, said it is not possible for her to pay tax as she only makes a meagre income. Photos: Emmency Nuukala

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