Although the Bank of Namibia announced a 0.25% drop of interest rates – 0.25 points less than the South African Reserve Bank last week, most commercial banks in Namibia only drop their rates much later. Standard Bank announced that it would reduce its prime-lending rate by 0.25% from 25 August 2004. The new rate will be 12.25%. First National Bank will decrease its lending rates only from 1 September 2004. Both the Prime Rate and Home Loan Rate will decrease by 25 basis points from 12.5% to 12.25%.

Lazarus Ipangelwa, Chief Executive Officer of First National Bank of Namibia Limited said he welcomed the cut in lending rates, albeit small and un-expected. It was good news to the consumers and he hoped this would further expand consumer credit extension. If interest rates go up, commercial banks raise them immediately. House owners and clients who pay off cars and personal loans must now still pay the higher loan rate this month, except for Standard bank, which is giving a leeway for customers, by dropping its rates by 25 August.

The ministry of mines and energy issued a prospecting licence to the US company Hunt Oil to explore offshore in the Lüderitz Basin. The licence will last until September 2005. Depending on the outcome of activities, Hunt Oil intends to continue its exploration activities in Namibia over the same licence area. This was announced by Dr Nickey Iyambo, Minister of Mines and Energy this week. This was the third such licence issued by the ministry in the last 18 months. First African Oil Corporation received a licence to explore oil in the Etosha/Owambo Basin and INA Industrija also received one. The ministry will hold a fourth promotional round in London and Houston, Texas next month on 9 and 13 September.

Developed in cooperation with SMEs Compete, a USAID-funded project for SME development, Namibia’s Rotary clubs have expanded the Voluntary Executive Mentorship (VEM) program for small and medium enterprises (SMEs) in Namibia. The program facilitates access for owners of small businesses to experienced corporate leaders and entrepreneurs who possess a proven track record of successfully starting, operating and expanding an enterprise. Having launched a pilot VEM last year in Windhoek with 6 SMEs, Rotary has expanded the program to the Otjiwarongo, Walvis Bay and Swakopmund clubs, all of which recently established VEM in their areas. Currently, 11 (SMEs) are benefiting from VEM in Windhoek, as well as 6 SMEs in Otjiwarongo, 3 in Swakopmund and 5 in Walvis Bay.

In Namibia, VEM’s immediate objective is to assist small businesses to increase their sales and staff complement. Its ultimate objective is to expand Namibia’s economic base and to enhance the competitiveness of the private sector. Kevin Davidow, past president of Windhoek Rotary, urged other business leaders to become part of similar mentorship programs to encourage the country’s economic expansion and competitiveness.

Initiated in 2002, SMEs Compete provides business services to Namibian (SMEs) to improve their business performance. SMEs Compete, which is funded by USAID in partnership with the Ministry of Trade and Industry, maintains offices in Windhoek and Oshakati and works extensively in the Erongo Region.