• Market Watch

Nedbank encourages economic diversification

- 2022-09-27 00:00:00

Nedbank Namibia, together with OMDis and Uconomy Namibia have completed the Small Medium-sized Enterprises (SMEs) and Economic Development Pilot Project that is aimed at diversifying the economic activities of Oranjemund.
This project to support and uplift SME development, was agreed upon by Nedbank Namibia, OMDis, and Uconomy Namibia in November 2021. Since then, the project has delivered exciting designs that will undoubtedly diversify Oranjemund’s economy.
These designs include an online marketplace, business listings and profiles, blog functionality, a labour desk, a ticketing system, project- and task-tracking, and a member login access level.
At least 53 SMEs across 16 industries have gone through this process to effectively integrate, familiarise themselves and benefit from the products and services offered through this project.
Out of 53 SMEs, only two of the businesses have their own websites. The system implemented by Nedbank Namibia, OMDis and Uconomy Namibia is set to change this, as SMEs will have a website hosting and online marketplace that caters for their products and services.
The new project will also cater to automated governance and registration guidance as the pilot project found an overwhelming need for accounting and tax support.
Nedbank Namibia’s Manager for Communications & PR, Selma Kaulinge says, "As a source of innovation and an economic engine, the success of micro, small, and medium-sized enterprises (MSMEs) can fuel a greater economic recovery due to their innovative and opportunity-seeking nature. However, they need supplementary support. We recognise that this attempt at collaboration is still in its infancy, but evidence delivered by the pilot project thus far, may lead to its implementation in other regions of Namibia.”
The initiative further aims to bridge the expertise gap by providing SMEs with an opportunity to access a network of local suppliers and clients. They will also be linked to various membership platforms that provide access to development support. “It is equally important to make investments in long-term structural reforms such as digital and financial inclusion, as well as the development of entrepreneurial skill capacity," Kaulinge noted.
GDP
Small-to-Medium Enterprises (SMEs) play an important economic role in many developing and developed countries all over the world. In Namibia, for example, the SME sector contributed over 13 percent of the Gross Domestic Product in 2012 according to the National Statistics Agency (NSA) report.
A March 2022 NSA Census of Business Establishment report, based on a pilot study which looked at 61 502 establishments between October 2019 and April 2021, confirms that SMEs are playing an important role in the country. The main objective of the Business Establishment Census was to provide detailed information about the structural and demographic characteristics of business establishments. The results revealed that the majority of establishments—about 55 800 (90.7%)—are categorised as micro establishments, followed by about 3,900 small establishments (6.4%), and 1,400 medium-sized establishments (2.3%). Only 345, or 0.6% of the total studied, are considered to be large.
Despite a high presence of SMEs in Namibia, these small enterprises are still facing significant challenges brought upon by scarcity of capital, poor economic conditions, Covid-19, and lack of access to information. Local businesses are largely self-funded and show an appetite for growth funding.
According to the Southern African Business Review, SMEs in Namibia suffer from a high failure rate; the possibility of business discontinuation is four times higher than the rate of established business activity, as defined by the Global Entrepreneurship Monitor.
Therefore, projects such as the initiative undertaken in Oranjemund are vital to assist locally based businesses in escaping their restricted market niches. It will aid their preparation for the expansion required to satisfy the demands of servicing emerging markets, making it a catalyst for growth and success on much greater platforms across other regions within the country.