Africa-Press – Namibia. THE tendency in life, and in business too, is to treat a symptom and not the cause of a problem, yet the symptom is a sign that manifests or reveals a problem. It is not the cause thereof.
When businesses run into trouble, are unable to service debt, cover overheads and operate profitably, those called upon to save a firm from collapse will delve deeper.
Is it financial indiscipline, excessive debt, pilferage by staff, poor quality and high returns of faulty products, or is it sloppy service? The business rescuer needs time to identify where problems lie before instituting rescue and recovery action.
With a limping economy, many firms are finding it difficult to continue operating. And for them the only recourse is staff retrenchment, scaling down or even closure, especially highly geared firms where dwindling income is making it a challenge to service loans and supplier debt, pay rental, remunerate staff, and cover other overheads.
In June, president Hage Geingob set up a task force comprised of business people and corporate leaders to review laws, rules, and regulations that impede the rescue of businesses in financial distress, with the aim to preserve jobs and, thereby, livelihoods.
Tuesday’s edition of The Namibian quotes the Ministry of Labour, Industrial Relations and Employment Creation reporting more than 14 500 lost jobs over the 21-month period January 2020 to September 2021, due to employee retrenchment and business closure.
In the newspaper’s article, labour expert Herbert Jauch points out that the ministry’s figure excludes job losses in the informal sector, where most Namibians in paid employment derive their income from.
Jauch says job losses exceed 40 000 and could even be as high as 60 000. Scary, isn’t it? As the academic year-end nears, thousands of tertiary educational institution graduates and school leavers will be looking for jobs.
The problem is that nowadays, with the nation reeling from the devastating aftermath of the coronavirus pandemic, jobs are scarcer than hen’s teeth, to use that age-old idiom.
Consultation was widespread and reportedly the president’s business rescue task force will release a preliminary report this week, which is awaited with bated breath, especially the recommendations on legal reforms and the modification or scrapping of regulations. But will this get the economy back on a growth trajectory?
Empirical evidence shows that many who followed their business start-up dream give up and throw in the towel far too soon after embarking on their entrepreneurial journey. They just cannot cope with the stresses and strains of running their own business and seek refuge in the comfort of paid employment.
Entrepreneurs in business find it challenging to navigate bureaucracy, deal with officialdom, government’s red-tape and to cope in a business-unfriendly environment.
One hopes that the task force will pull no punches when it comes to highlighting the root cause of problems that lead to businesses needing rescue, such as slow decision-making and action-taking by public officials.
Reforms are not only required on the business rescue front, but when it comes to compliance too. There are laws and regulations, including municipal by-laws that seemingly do little more than impose costly compliance demands. The panacea for growing Namibia’s economy is a business- and investment-friendly environment. Period.
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