Finance minister Iipumbu Shiimi’s statement on COVID-19 economic stimulus

1. The Government of the Republic of Namibia is acutely conscious of the significant negative economic and social impacts of the COVID-19 outbreak on economy, businesses and households.
2. The longer the outbreak and the health containment measures, the deeper and longer the economic contraction and social hardships.
3. During the lockdown and suppression period of the outbreak of the COVID-19, all-out efforts will be made to ensure that health benefits of the lockdown are achieved, while core economic activities, formal and informal, are supported and essential financial services continue uninterrupted to the extent possible.
4. In response to these unprecedented economic hardships the Government, in collaboration with all stakeholders; private, development partners and other non-state actors, has adopted the First Phase of the Economic Stimulus and Relief Package geared at addressing the negative effects arising from the first 21-day lockdown period. This First Phase is being rolled out here and now.
5. The total Stimulus and Relief Package amounts to N$8.1 billion, comprising of N$5.9 billion as direct support to businesses, households and cash flow acceleration payments for services rendered to Government and N$2.3 billion of additional support, guaranteed by Government, but off-balance-sheet Government liabilities to further support loan uptake on preferential terms by business and individuals.
6. The Package is directed at:-
 formal and informal businesses in sectors which are directly or indirectly affected by the lockdown measures and other external and internal demand and supply-side shocks, and labour and households, both to ensure households and the related labour market aspects such as job retention and to mitigate the negative impact on income and to provide for the basic amenities for households such as potable water. This would promote health and hygiene as well as enable Namibians to cope with the constrained conditions arising from the lockdowns as we stave off the potential spread of the COVID19.
Specific provisions of the Economic Stimulus and Relief Package Relief Measures for the business sector.
7. To support job retention, continued productive economic activities and the cash flow of businesses, the following measures are to be introduced:-
(a) Wage subsidy for hardest-hit sectors. To avoid further retrenchment in the hardest-hit sectors, the Government will provide a wage subsidy to aid businesses in retaining jobs in tourism, hospitality, travel and aviation and construction sectors. Details will vary across sectors. Government is setting aside about N$400 million for this subsidy.
(b) Accelerated repayment of overdue and undisputed VAT refunds.
The government will immediately speed up such repayments to enhance the cash flow of enterprises paying VAT. The total amount of the refunds to be settled within one week of the implementation of these measures stands about N$3.0 billion.
(c) Accelerated payment of overdue and undisputed invoices for goods and services provided to Government. The government will immediately speed up such payments to boost the cash flow of enterprises that are suppliers to the Government. This amount stands at about N$800.00 million.
(d) Non-agricultural small business loan scheme. The government will guarantee a N$500.0 million, concessional rate, a loan scheme for non-agricultural small businesses, with funds provided through the Development Bank of Namibia. The loans will be extended to
businesses experiencing or expected to experience cash-flow pressure as a result of a loss in revenue due to COVID-19.
(e) Agricultural business loan scheme. The government will further guarantee a N$200.0 million loan scheme for farmers and agricultural businesses by extending a guarantee for such loans to the Agricultural Bank of Namibia.
The loans will be extended to cashflow-constrained farmers and small to medium-sized farming businesses that have experienced a significant loss of revenue.
(f) Granting of the policy relief to borrowers by DBN and AgriBank in the form of a capital repayment moratorium where a holiday is allowed on the principal amount for a period ranging between six (6) months, but not exceeding two years (24 months) based on assessment, recapitalization of interest, lengthening of the repayment periods and waiving of penalty provisions.
(g) Tax-back loan scheme for non-mining corporates. To provide breathing room for tax-paying cashflow-constrained businesses in the non-mining sectors, such businesses can borrow an amount equal to 1/12th of their tax payment in the previous tax year, to be repaid after one year. The interest rate will be concessional, below prime, on the back of the Government guarantee, capped at N$470.00 million. Applications will be made via commercial banks.
(h) Relaxation of labour regulations to protect jobs. To avoid major retrenchments and business closures, employers including Government and business owners will be allowed to negotiate a temporary 20% reduction of salaries and wages during the crisis period, and 50% for the worst-hit industries. The negotiations will be undertaken through a consultative process with employees and labour unions.
Support to households
8. To support households to cope with reduced income, increased health-related spending and other hardships due to the virus outbreak, the following measures are to be introduced:-
(a) An Emergency Income Grant, to support those employees who have lost their jobs due to the pandemic and its fallout. This is a once-off payment of N$750 to people who have lost their jobs, either in the informal or formal sector, essentially to stave off the vulnerabilities which arise. Applications may be made by Namibians citizens between 18 and 60 years of age who have lost their jobs and not receiving any other social grants. Payment will be made by Government in collaboration with the Social Security Commission and other financial sector and information communication technology partners within 7 days, utilising the banking sector’s ATM infrastructure. The total amount for this measure is costed at a maximum of N$562.00 million, based on the national poverty line of about N$250.00 per person per week.
(b) Tax-back loan scheme for tax registered and tax-paying (PAYE) employees and self-employed individual persons who have lost income or part thereof or experiencing difficulties due to COVID-19 outbreak. To provide breathing room for cashflow-constrained individuals who are taxpayers, they can borrow an amount equal to 1/12th of their tax payment in the previous tax year, to be repaid after one year. The interest rate will be concessional, below prime, on the back of a Government guarantee.
The total guarantee is capped at the maximum of N$1.1 billion, based on the PAYE tax register and the potential loan size. The Government, in collaboration with the banking institutions, may institute statutory and administrative measures to enhance compliance with loan conditions.
(c) Water subsidy during lockdowns. The government will ensure that water points are kept open without a need for water cards during the lockdown, through NamWater and Local Authorities that will subsidize this critical service. For the First lockdown, this amount is estimated at about $10.0 million.
9. These measures take into consideration monetary policy and banking sector measures announced by the Bank of Namibia and the replication of such related measures in the non-banking financial sector. They take effect immediately and their implementation will be accelerated in the coming days and weeks.
10. I wish to reassure the business community, large corporates and the micro, small and medium-sized enterprises in all sectors of our economy that the Government will continue to support economic activities as well as households during the current challenging circumstances and in the recovery phase of our economy. Equally, the Government calls on effective partnerships, solidarity and dialogue with all stakeholders during this time of coordinated actions.
11. I also wish to call on the domestic and external financiers, Development Partners and all stakeholder institutions with the financial wherewithal to work in partnership and to avoid duplication and silos for an integrated approach and optimum impact.
12. With this package of measures now being rolled out, I call on the business community and employers to avoid laying off workers at this point in time. This is an exceptional, crisis-related and temporary period for which stern efforts from all stakeholders are required.
13. I am confident that through effective partnerships and coordinated planning and action, we should be able to do what must be done to mitigate the economic and social impact of the COVID-19 on the economy, businesses and households.

14. Through the unity of purpose and action, Namibians, with the support of our multistakeholder development partners, have demonstrated resilience through which we have surmounted challenging circumstances which came our way.
15. It is with the same zeal that we must, as a united people, rally together to overcome the challenges posed by this outbreak, which is temporary in nature.