The Ministry of Industrialisation and Trade (MIT) says it is focusing on streamlining public procurement and tender reservation policies to enhance the participation of micro, small and medium enterprises (MSMEs) in Namibia.
According to the Deputy Executive Director in the Ministry of Industrialisation and Trade, Michael Humavindu, the Ministry is working to create a more accessible and supportive environment for MSMEs within the public procurement system.
“The public procurement rules need to be streamlined and simplified to allow MSMEs easier access. This includes reviewing tender fees and related costs to ensure they do not create unnecessary burdens for smaller businesses, giving them a fair chance to participate,” he told a Standard Bank Namibia networking event on Tuesday.
Humavindu stressed the need to simplify the public procurement process for MSMEs, making it more efficient and less costly.
He said this would involve revising the rules governing public tenders to make them more accessible to smaller enterprises, reducing both administrative and financial burdens.
“All tenders where local capacity exists should be reserved for Namibian-owned businesses. This policy is vital, irrespective of the tender’s value. We want to make sure local businesses, especially MSMEs, can benefit and grow by having fair access to public contracts,” he said.
Humavindu emphasised that preserving local participation in public procurement would boost the competitiveness of domestic businesses and stimulate economic growth.
Meanwhile, Humavindu also emphasised the need to reduce barriers to finance for MSMEs, noting that the ministry is currently exploring ways to lower interest rates on loans for these enterprises.
He pointed out that a Cabinet directive from February 2024 mandates MIT to present solutions by next year. These solutions are expected to be submitted to the Ministry of Finance for inclusion in the next financial cycle.
“One of our key priorities is reducing the interest rates on loans available to MSMEs. This was mandated by the Cabinet directive in February 2024, and by next year, we plan to report back with solutions. We want to present these solutions to the Treasury for inclusion in the next financial budget cycle,” Humavindu explained.
Humavindu also highlighted the need for collaboration with commercial banks to finance MSMEs, emphasising that expanding finance options beyond the Development Bank of Namibia (DBN) is critical.
By involving commercial banks, he said MSMEs would have broader access to contract financing, improving their chances of participating in the public procurement process.
“We are working to expand MSME financing beyond DBN. The involvement of commercial banks is crucial in this regard, allowing for a broader financing scope. This is a collective effort, and we need commercial banks to collaborate with us to bring contract financing solutions beyond DBN,” Humavindu added.
Humavindu further highlighted the importance of addressing conditions attached to donor funding, which sometimes conflict with Namibia’s strategic objectives.
He reiterated the need to review these conditions to ensure that public procurement opportunities are aligned with national development goals, particularly in reserving tenders for Namibians.
“There are conditions tied to donor funding that do not align with our strategic objectives, particularly regarding reserving tenders for Namibians. We must revisit these agreements to ensure they support our local procurement policies and contribute positively to Namibia’s broader economic goals,” he said.
As the Ministry moves forward with these reforms, Humavindu called for continued collaboration between the government, financial institutions and the private sector.
He expressed optimism that these changes would support the MSME sector, fostering growth and improving access to public procurement opportunities.
“A lot of work lies ahead, but we are committed to collaborating with all stakeholders to ensure the success of these initiatives. Together, we can create an environment where MSMEs can thrive and meaningfully contribute to the economy,” Humavindu said.
