…Drought, volatile economic climate blamed
By Confidente Reporter
THOUSANDS of workers have been retrenched while thousands others face the same fate as dozens of local companies are being forced by the harsh economic climate and drought among others to either down-size or completely close shop, Confidente has learnt.
Confidente is informed that the slashing of the 2016/17 national budget in August worsened a situation that was already on the brink of disaster due to the persistent drought which has triggered the massive retrenchments. Government’s move to cut the national budget in a bid to reign in on its huge budget deficit and putting on hold all its multi-billion dollar projects has meant that businesses that usually survived on government jobs have been left high and dry.
Although the office of the Labour Commissioner said it was still compiling figures for the last quarter of the year, it revealed that there is now a crisis in the job market as thousands of workers continue to be retrenched due to the harsh economic climate.
According to the latest figures supplied, in the third quarter of the year over 350 cases of retrenchments where reported to the Office of the Labour Commissioner and the figure could be double as many other workers are retrenched but never report to their office.
According to the figures, Khomas region had the highest number of cases of retrenchments followed by Erongo and Otjozondjupa region closely following.
The biggest reason for the retrenchment was the bad economic or financial environment that saw 144 people retrenched, while 81 were left jobless as a result of company closures. The drought is also contributing to the retrenchments as well as the sale or transfer of companies.
The service industry, retail, construction and manufacturing industries are the hardest industries which are retrenching a large number of workers.
So bad has the turmoil become that the Namibia Chamber of Commerce and Industry (NCCI)’s Chief Executive Officer, Tarah Shaanika, Tuesday acknowledged that the economy was in “shock and there is blood on the floor” as more retrenchments and companies folding are expected.
“The economy is in shock and there is blood on the floor. There are lots of retrenchments, more employees will be retrenched while some companies will close down. The situation will take two to three years to recover and by then lots of businesses would have closed down… We have been receiving lots of complaints from our members about how they are now forced to retrench and are receiving summons due to litigation after they fail to service their debts,” Shaanika said.
Shaanika also added that government had failed to manage properly the whole economic crisis when it abruptly announced the cutting of the 2015/16 national budget.
“The whole process has not been managed properly. It should have been done gradually. You can’t just wake up one day and cut the budget. It was too abrupt. Businesses have been affected greatly,” he said.
Shaanika also took a swipe at government for not engaging with the business sector in order to find ways to weather the economic crisis together.
“There is need to engage us more. There is no consultation that is done with us.”
On the matter of NCCI members who are failing to remit tax returns to the Receiver of Revenue, Shaanika said it was not the organisation’s duty to police its members.
“Government needs to widen the tax net so that all people pay tax. As for business people who are not paying, we have no mandate to police our members,” Shaanika said.
The acting Permanent Secretary in the Ministry of Labour, Vilbard Uusiku commenting on the massive retrenchments said times were hard.
“Times are hard and if you remember a few weeks ago the Finance Minister announced that tenders awarded have been frozen and so if there is no work from the state traditionally, sectors like the construction industry will be forced to retrench. The general economic situation is bad. South Africa’s unemployment rate has increased by 0.5 percent to 27 percent and ours is not far behind. Times are tough even if I don’t have figures at hand, we have noticed this.”
Asked on what government was doing to address the massive retrenchments, Uusiku said there wasn’t much government can do for now except to ensure that employers who retrench follow proper procedures.
“The government can only step in once employers fail to follow proper procedures when retrenching,” he said.
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