Tourism industry dying while waiting for bailout

…30,000 jobs can be lost if government money does not arrive on time

Staff Writer

The government is yet to avail the N$400 million promised to the country’s tourism sector as a subsidy. It has been three weeks since the Finance minister Iipumbu Shiimi, made an announcement pledging the multi-million dollar bailout for the hospitality, travel and tourism sector.

The funds, according to Shiimi were aimed at providing a subsidy to players in the hard-hit tourism sector. This financial support would allow them to retain jobs with the industry. Tourism has been brought to a grinding halt as a result of the Covid-19 state of emergency that has essentially closed the borders. Inbound tourists are not allowed in. The regional lockdown within Namibia has eliminated domestic tourism opportunities as well.

Representatives of the tourism sector have stated that their financial position has worsened due to insufficient communication from the government about the bailout package. Currently, distribution criteria for the subsidies have yet to be announced. No funds have been disbursed since the announcement by the Finance minister.

“After the announcement by the government, we wrote to the Ministry of Finance with a proposal on how the funds could be distributed. To this date, we have not received an answer. The Minister of Finance has not submitted criteria on how he plans to distribute the funds. No payout has been made,” said Bernd Schneider, Chairman of the Federation of Namibian Tourism Associations (FENATA).

“Initially, we were happy about the announcement by the government. But now, not a single cent has been paid, leaving many businesses forced to close their doors because nothing has been paid.”

According to Schneider, delays in the release of the bailout funds coupled with the extension of the lockdown may cause the loss of 30,000 direct jobs (projected).

“The tourism sector is faced with zero income and things are getting exponentially worse. Over 120,000 survive on income from the sector but the government has failed to show any support to save the industry. Companies are making decisions to close their doors. For some, there is no money left to work with as no income has been generated due to the lockdown,” he said.

“During the lockdown period, the government should have at least allowed us to service local tourism. This would have allowed us to generate some income. Unfortunately, it was a blanket ban. The government could have used the model that is being applied to supermarkets because the current measures are prohibiting tourism companies from surviving. There are other ways to control the spread of the coronavirus,” complained Schneider.

The FENATA Chairman warned that after the end of the lockdown on the 4th of May, the sector will struggle to recover.

“Even if they lift the lockdown, the tourism sector faces the possibility of zero income for the remainder of the year. The sector has also been hit by the travel ban from our source markets. Leisure and business travel will re-open very late,” he said.

Delays in the distribution of the tourism sector subsidy come after the government failed to meet the date set to start distributing the N$750 Emergency Income Grant (EIG). This individual grant is meant to assist people to buy food and other necessities during the State of Emergency. The Ministry of Finance noted that technical difficulties blocked a faster roll-out of the EIG.

To aid the domestic economy, the government announced a total stimulus and relief package amounting to N$8.1 billion. This grant comprises of N$5.9 billion as direct support to businesses, households. It also includes cash flow acceleration payments for services rendered to the government. An additional N$2.3 billion in support of various sectors has been guaranteed by the government.

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