Businessman Leake Hangala says about 70% of small and medium enterprises (SMEs) in Namibia fail to succeed due to a lack of entrepreneurship culture and inaccessibility to capital, infrastructure and skills.
“In Namibia, we lack the business culture as many do not want to take risks, this is worsened by the fact that it’s not something that is instilled in our people in schools and universities. Thus, for us to change the 70%, there is a need to increase business and entrepreneurship up-skilling,” he highlighted.
Hangala made these remarks at the Economic Association of Namibia event organised in conjunction with GIZ, focusing on: “Exploring the challenges in the market access and bankability for SMEs in Namibia.”
“Other countries have a business environment with a third to fourth generation, meaning these are generation businesses that are passed on, while some have a base-load capital from where they can begin as opposed to us in Namibia,” he said.
“In general, our SME sector is slowed by the lack of capital, as some of the conditions given by banking institutions are not favourable. Further compounding this, is the lack of infrastructure to conduct business, while those available are unaffordable, thus making it difficult to run a business.”
SMEs in Namibia, he said, heavily rely on the government and corporate sector if these two bodies fail, so will the whole economy, as they are not independent and, thus, are vulnerable to shocks.
“When the government and corporate sector are doing well economically, everything is blossoming, and the worst comes if they fall. And this is a trend that is happening in the rest of Africa. Thus, this situation needs to change, if we are to see our country growing economically,” Hangala said.
As a push, he implored the government to implement policy enablers especially with green hydrogen, oil and gas on the horizon, and by extension agriculture, should create policies that make local procurement of services and goods mandatory.
Hangala said other countries have developed in this manner, “because when you empower local SMEs, you are not enriching individuals, but it goes a long way in benefitting many generations”.
“In addition, for the economy to flourish, we need to have our own retailers as a first point of entry to capture our local products or use the services, thereby extending to others. However, this can only be done with support from all sectors, the government is trying but it is not enough, including banks.”
