Mid-term budget allocation hailedas a trailblazer for economic growth

Martin Endjala

The recent mid-term budget allocation of N$326.1 million to Small and Medium Enterprises (SMEs) is hailed as a trailblazer to economic growth in the country, with an emphasis that access to finance has been identified as a key element for SMEs to succeed in their drive to build productive capacity, to compete, to create jobs and contribute to poverty alleviation.

These were the sentiments shared by Economist and Independent Bank Researched Josef Sheehama on the SME injection, a move which he and other experts have been calling for.

“Without finance, SMEs cannot acquire or absorb new technologies nor can they expand to compete in global markets or even strike business linkages with larger companies. This is commendable by availing N$326.1 million to revive SME sectors as well as resuscitate economic recovery,” said Sheehama.

He maintains that financial help from the government ingrained a belief among SMEs that government support will remain available in the future. That is why SME owners think positively and reopen their operations after economic shock, with optimistic hope.

In terms of drought relief, which saw the Office of the Prime Minister getting a junk of N$643 million for drought relief, Sheehama underscored this move as pro-poor friendly and well done by the minister to allocate funds for drought relief to affected people.

Meanwhile, Finance Minister Iipumbu Shiimi, during the tabling of the 2023/24 mid-term budget this week in the National Assembly, said the SMEs Recovery Loan Scheme at the Bank of Namibia was successfully revised largely, addressing the identified shortcomings concerning the qualifying criteria, the lending rate and marketing.

Since the relaunch, loans worth N$326.1 million have been disbursed to a total of 310 SMEs, with 73 applications worth N$108.9 million still under consideration. Shiimi said progress is being made in establishing the Venture Capital Fund under the stewardship of the Development Bank of Namibia.

Adding that the process of appointing trustees for the Fund is advanced and once established the Venture Capital Fund will assist growth-oriented SMEs to scale up their activities with the view to help create much-needed jobs in the economy, given the budgetary support provided to the Ministry of Industrialisation and Trade, and the ministry invited entrepreneurs to apply for support through the relaunched Equipment Aid Scheme.

“This Scheme will go a long way in helping our SMEs, support job creation and reduce youth unemployment. Further, more commercial banks are in the process of signing up to participate in the Credit Guarantee Scheme (CGS) established by the Government in August 2020 while others are increasing their utilisation of the scheme.

This will make more resources available to SMEs with the view to strengthen their activities and consequently support the economic well-being of Namibians and the youth in particular, “said Shiimi.

According to a Simonis Storm Securities recent report, the inauguration of the Venture Capital Fund and the revamped SMEs Recovery Loan Scheme are clear indicators of the government keen on driving entrepreneurial activity and job growth.

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