Read the fine print before cheering

The statement that the devil is in the details is spot on. As people slog through the criteria, rules, and exceptions attached to the announced COVID-19 financial support plans, all that glitters is not gold.

Before giving more applause to the headline-grabbing announcements of N$8.1 billion for this or N$400 million for that or N$700 million for these, people must step back, take a deep breath. Read the fine print.

Fact: Namibia was broke before COVID-19 hit and the coffers were dry. This remains the case.

The money that is being bandied about is coming from sleight of hand by financial officials. The bad news about our national debt percentage will be sorted in the months to come. But, for now, let us take the government at its word and say that these funds are available.

For the Social Security Commission (SSC) money, you have to be registered AND in good standing before you can access the programs. News reports have stated that the money offered only covers around 17 percent of the payroll. Is the program to assist businesses and workers or to arm-twist them into signing up for an SSC membership?

The bait dangled in front of the informal sector is that there is SSC bailout money if you register. The government has always pushed for leverage to get informal businesses registered. They want them to be taxed, regulated (i.e., charge fees) and counted for statistics.

That means informal business wanting SSC money must state its range of income, prove that they have these employees (i.e., present their ID numbers and contact information) and officially declare their income. Payments of the SSC monthly membership fee will be due on the spot. They may also demand the Ministry of Trade company numbers, tax ID numbers, and the names and contact information on all ‘owners’ of the businesses. They will need a business address. Certainly, this information will be made available to Inland Revenue.

Everything above is exactly what informal businesses do NOT have. That is why they have chosen to stay ‘informal.’ These are people who have been selling their ‘things’ on the street for years. They are scratching out a subsistence level of income (and sometimes not even that). They have no money to pay for social security for themselves or anyone working with them. Income is not guaranteed month-to-month for street vendors or home-based businesses. Some don’t have the skills to fill out the forms correctly. Many have no current accounts and do no internet or e-wallet banking. The list of logistical concerns is long.

In practice, little of that highly applauded SSC funding will go to informal sector businesses or workers. Why wet people’s appetites for something they will never receive?

Banks and their assistance is good for those that qualify. But, read the fine print. T’s and C’s apply.

These financial institutions do not intend to decrease their billion-dollar profits. Regardless of COVID, they deduct their bank charges, late fees, overdraft extension fees, withdrawal fees, interest payments, and other income streams. Loan deferrals are not loan reductions, so wipe that notion completely from your mind.

Their ‘deferrals’ are ONLY for those who are up-to-date with their payments. Those who were struggling to make full payments on time due to the economy before COVID-19 can forget it.

The tourism industry has 10 of 12 nails in its coffin. Even if Namibia did reopen its borders (which is it correctly not doing) – the world is on lockdown and the higher paying overseas clients cannot come even if they wanted to (which they don’t).

Domestic tourism is now possible. Arguably, a small, select few of the elite and affluent might want to ride quad bikes on the Dunes at the Coast. But, meetings, conferences, and summits are still banned.

Where is the promised N$400 million for that sector? In any event, the relatively little amount of money will not cater to the temporary salary needs of tourism businesses in Namibia. Only a select few will get a sniff of those funds.

And, most importantly what hoops does the tourism industry have to jump through to get these morsels of help? True to form, the government will likely link the assistance to payment of back taxes, late VAT returns, or bed levy payments. They might want to nail any business that does not meet Affirmative Action or black empowerment concerns.

Add to all the above the stark and painful reality for everyone that government institutions can be inefficient. They usually move at turtle speed.

The paperwork to move these kinds of programs is massive. It will take months to vet and sort the forms, let alone allocate grants.

That some businesses can reopen in Stage 2, is a good thing. Many people who now have no jobs, cut salaries or missed salaries for April, cannot spend in those open businesses in any event. Still, something is better than nothing.

Every little bit helps someone somewhere.

Before cheering any new announcements about government or financial institution programs to help people survive COVID-19 financial pressure, check the fine print. Your loud cheer for the presumed ‘bailout’ might be just a wistful smile.

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