Welcome to PLUS online

Business Indicators very negative

After the sharp jump in October of nine points IJG Business Climate Index plunged by four and a half points in November but recovered to 105.9 points in December 2003, according to the latest research of the Institute for Public Policy Research (IPPR). The end of the year was generally marked by clear seasonal characteristics such as falls in vehicle sales, building plans and company registrations and 2003 was no exception. The November and December results indicated that almost two-thirds of responding businesses perceived prevailing business conditions as "negative or very negative." This was the most negative outlook since the IJG Business Climate Survey began, the IPPR noted this week. These latest survey results suggested a uniformly negative view in terms of revenues, employment and investment and general perceptions of prevailing business conditions – surprising perhaps given the present environment of declining inflation and interest rates. The only convincing explanation was that the continuing strength of the Rand was hitting Namibia’s exporters. Although the present exchange rate of R7-R7.50 to the US dollar made the local currency undervalued in purchasing power parity terms, it looked as if an even more undervalued currency was necessary in order to boost domestic business perceptions on prevailing business conditions.

The IJG Business Climate Survey asks 50 top businesses in Namibia across all major sectors of the economy to reply to 4 questions on revenues, employment, investment and prevailing business conditions. In addition to this sample, members of the Namibian Manufacturers Association (NMA) are also surveyed. Since September 2002, members of the Namibia Chamber of Commerce and Industry (NCCI) have taken part in the survey. For this survey, IPPR received a total of 41 responses but none from the NCCI.

Special courts for VAT and ASL

Cabinet approved the establishment of 3 special courts to hear appeals on income tax, value added tax (VAT) and additional sales levy (ASL). The Judge President will soon appoint a judge of the High Court to serve as President of the Special Courts. Persons to serve on the Special Courts for 5 years are Ms Christina Swart-Opperman, Ms Nelago Kasuto, Ms Rauha Uaandja and Messrs Cameron Kotze, Gifford Swart, and Libolly Haufiku. It is not yet known when the first appeal hearings can be filed.

Caprivi Sugar Project to cost N$ 1,43 billion

The Namibian government intends to start a sugar cane project close to the Lake Liambezi area in the Caprivi Zipfel. After a US company did a preliminary assessment in 1998, a South African company started in 2001 with an environmental assessment. Findings were presented on Tuesday in Windhoek and to the public of Katima Mulilo on Wednesday. According to Robin Clanahan, a consultant, the project will encompass 10 000 ha west of the Lake, a sugar mill close to Katima and a water pipeline from the Zambezi River. About 7000 jobs will be created. If however, mixed crop production like sorghum, maize, tobacco and mahangu will be planted instead of sugar, around 3 500 jobs will be created. The Namibian government intends to spend N$ 515 million, while a company, which still needs to be established, has to invest N$ 422 million and a milling company N$ 492 million. The amount of N$ 24 million is to be used for electric fencing to prevent elephants and other animals to enter the plantations. The sugar project has been on the cards shortly after independence, but was heavily disputed by tribal chiefs in the Caprivi, because President Nujoma and the government did not consult them. They further claimed that the tribal land to be used was their land. The exiled Mafwe Chief Mamili in particular complained bitterly about the authoritative way, in which President Nujoma allegedly informed him that the project would go ahead. According to Clanahan, sugar cane farming required intensive training of three years. Providing the irrigation systems, canals and constructing the mill would need 3 to 4 years.