The Namibian Employers’ Federation (NEF) has expressed concern over the Ministry of Labour’s rejection of its proposal for a phased implementation of the National Minimum Wage (NMW), which took effect on 1 January 2025.
According to the NEF, the immediate rollout risks significant job losses and economic instability in an already strained labour market, particularly as Namibia grapples with high unemployment rates.
Youth unemployment remains a pressing issue, and the NEF warns that businesses struggling to absorb the costs of the NMW may resort to retrenchments or replacing labour with automation, further exacerbating the crisis.
“The NEF’s request for a phased-in approach was not about opposing fair wages for workers but about ensuring a smooth transition that protects livelihoods and economic stability. Decisions of this magnitude must balance worker welfare with economic realities, especially in a country with such a high unemployment rate,” said NEF President Elias Shikongo.
He further explained that the Ministry’s announcement of the NMW in August 2024 did not align with the recommendations of the Wage Commission, which advocated for businesses to prepare for at least 12 months.
Employers had requested an 18-month period. Despite these recommendations, the Ministry provided no explanation for its deviation, leaving businesses with limited time to adapt.
Additionally, the NEF pointed to the security sector’s phased approach as a practical precedent that could be extended to other industries.
This method allows businesses to transition gradually without drastic measures such as retrenchments.
“Our goal remains a balanced and well-planned implementation that supports both workers and businesses. We call on all parties to work together to ensure the NMW achieves its intended goals without unintended harm to livelihoods or economic stability,” Shikongo said.
Shikongo also said compounding these challenges is the lack of current labour market data, with the most recent statistics dating back to 2018.
He said the gap makes it impossible to fully assess the potential impacts of the NMW, further emphasising the need for a cautious and phased approach.
“Without reliable and up-to-date employment data, we risk making decisions in the dark. Rushed implementation could harm the very workers the policy aims to protect, creating economic instability that affects us all,” he said.
