Programme description

Title: Partnership for economic growth
Commissioned by: Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ)
Country: Namibia
Lead executing agency: Ministry of Trade and Industry, Ministry of Finance, Ministry of Regional and Local Government, Housing and Rural Development, National Planning Commission
Overall term: June 2005 to March 2014

Context

Almost 15 years after Namibia gained independence, its economy is still divided into a small, modern sector and a growing, informal survival economy.

The country’s economy still consists of individual sectors that are barely linked – such as agriculture, mining, and fishing – and is heavily dependent on the international market, above all on the South African market. There is very little evidence of diversification, strengthening of added value chains and greater sectoral differentiation through small and medium-sized enterprises (SMEs). In particular, there is an absence of conducive legal and administrative conditions, and capacities to promote SMEs are inadequate. Scarcely any coordinating mechanisms between private business and government have been developed.
The provision of business services in the non-financial area is not sufficiently geared to demand. SMEs, particularly in the rural regions, only have limited access to financial services.

Thus, the basic prerequisites for sustainable economic growth on a broad basis are lacking. Unemployment and poverty are the consequences of a lack of productive integration and competitiveness in the private sector.

Objective

The conditions for private-sector growth and employment have particularly improved in the northern region of Namibia.

Access to financial and non-financial services, the implementation of local business support strategies and supportive conditions for business are leading to intensified economic activities by SMEs and to more employment.

Approach

The programme is divided into the following components: (1) microfinancing, (2) business services and (3) supportive conditions (“enabling environment”) for small and medium enterprises.

It is acting on the micro, meso and macro levels and is working together with a strongly diversified executing and implementation structure. Thanks to the programme's structure-enhancing and capacity-building interventions, service companies, private-sector self-help organisations, local governments and the participating ministries are creating an enabling environment for economic growth supported by the private sector.
By establishing learning platforms for topics such as local economic promotion, microfinance systems or entrepreneurial services, the cooperation and efficient division of labour between public and private decision-making bodies is supported.

Ancillary advisory and training services for SMEs are supporting commercial banks in the launching of products for SME financing. Finally, the programme supports the Namibian Government in the devising and implementation of a policy for the development of the private sector.

Results achieved so far

The programme has prompted the setting up of a long-term microfinance bank acting nationwide, and has contributed to its development.

With the founding of a public-private dialogue forum, the programme’s advisory recommendations were implemented and now contribute to an effective dialogue on reform.