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The role of BoN as a fiscal and economic advisory

The government decisions lately have been unpromising, given the advantage of fiscal bodies to assist them. Bank of Namibia is a fiscal advisor to government to encourage social optimal investments that will benefit and channel the economic growth and  to achieve full employment rate.

Bank of Namibia held its two-day media briefing course on central banking operations and representing the role of BoN as an advisor was Mr. Erwin  Naimhwaka, Deputy Director for Policy research at the Bank of Namibia, where he made his remark that “ it is a sad matter when good advice is not taken up”.

Following the fishing auction catastrophe, good advice would have been highly recommended before the auction took place, nonetheless there were red flags that the government chose to ignore and paid the price of gaining a 1.3% ( 8.4million), this total partly consist of N$ 76 000 of the application fees, of the  628 million expectations. Bad crisis management.

Red flags. Time frame of invitation ran for a month and looking at the impact of Covid-19 on business revenues, most bidders would not pull through. In the first-time frame there were 111 applicants and only 33 got the chance, in which  only five made payment. Now that was supposed to be a warning for the government not to expect much in the coming round. Involvement of new players made matters worse.

According to the Minister of Finance Mr. Ipimbu Shiimi, most new players in the industry had no ownership of registered vessels, which is mandatory requirement and those that owned, stayed away from the auction. If that was not enough, the Confederation of Namibian Fishing  Association did not support the auction, and still the government went on with it.  Shiimi said that the government can learn from Bank of Namibia’s bond auction, whereby if bidders commit to paying, they should, if not the bidders would be  banned from participating in such auctions.

“lessons were learned”

Given the Covid-19 wake up call , one needs to question if the bank performed its task in the fishing auction as an advisor.  

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Katrina Andreas December 17, 2020 at 7:09 am

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