COVID-19 UPDATE: NAMIBIA
The Government of the Republic of Namibia have acted swiftly to contain the COVID-19 pandemic in Namibia by introducing a number of measures. Namibia registered her first two confirmed cases of COVID-19 on the 13th of March 2020 and on the 17th of March 2020, the Government declared a State of Emergency, which was approved by the Namibian Parliament to remain in place for a period of six months. To date, Namibia has sixteen confirmed cases of COVID-19. In addition to closing the national borders and barring all incoming flights to Namibia, the Government initially imposed a 21 day lockdown for Khomas Region and Erongo Region, including the local authorities of Okahandja and Rehoboth, which commenced at 23:59 on Friday 27 March, 2020 until 23:59 on 16 April, 2020. To minimize the impacts of COVID-19 on the Namibian economy, the Government rolled out the Economic Stimulus to the tune of N$8.1 billion on the 7th of April 2020.
Economic Stimulus of N$8.1 Billion
The total stimulus and relief package of N$8.1 billion comprises 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. In summary the economic stimulus package is to be rolled out as follows:
- Emergency Income Grant
A once-off payment of N$750 will be provided to people who have lost their jobs, either in the informal or formal sector. Applications may be made by Namibian Citizens between 18 and 60 years of age who have lost their jobs and are not receiving any other social grants. Payments will be made by Government within 7 days upon application, utilising the Banking sector’s ATM infrastructure. The total amount for this measure is costed at a maximum of N$562 million.
- Tax-Back Loan Scheme
Tax registered and tax paying (PAYE) Employees and self-employed individual persons who have lost income due to the COVID-19 outbreak 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.
- Water Subsidy
Governments will ensure that water points are kept open without a need for water cards during lockdowns, through NAMWATER and Local Authorities that will subsidize this critical service. For the first lockdown this amount was estimated at about N$10 million.
- Non-Agricultural Small Business Loan Scheme
The Government will guarantee a N$500 million, concessional rate 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.
- Goods and Services provided to Government
The Government will immediately speed up payments of overdue and undisputed invoices for goods and services provided to Government to boost the cash-flow of enterprises that are suppliers to the Government. This amount stands at N$800 million.
- Policy Relief
Borrowers will be granted policy relief by the Development Bank of Namibia and the Agricultural Bank of Namibia 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, recapitalisation of interest, lengthening of the repayment periods and waiving of penalty provisions.
- Agricultural Business Loan Scheme
The Government will guarantee a N$200 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 cash flow-constrained farmers and small to medium-sized farming businesses that have experienced a significant loss of revenue.
- Tax-Back Loan Scheme for Non-mining sector
To provide breathing room for tax-paying cash flow-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 million. Applications will be made via the Commercial Banks in Namibia.
- Labour Regulations
Labour regulations will be relaxed 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 a 50% for the worst-hit industries. The negotiations will be undertaken through a consultative process with employees and labour unions.
Extension of Initial Lockdown and relaxation of certain restrictions
To further curb the spread of COVID-19, on the 14th of April 2020, the Government extended the lockdown from midnight on Friday 17th April 2020 to midnight on 4th May 2020. The lockdown has been extended to the entire country and no longer limited to Khomas Region and Erongo Region. During this period, movements within the whole country will be restricted.
The prohibitions imposed relating to certain operations and closure of certain business activities have been revisited to allow for the opening of informal trading and open markets, subject to strict hygiene, social distancing and limitation of gatherings.
With regard to reopening of schools, teachers and lectures will operate from home during the period of 20th April 2020 and will officially return to their work places on the 6th of May 2020. As for learners and students, they will not return to school until further notice.
Government employees and private sector employees who were working from home since the 27th of March 2020 will continue to work from home until the 5th of May 2020.
The fishing sector renders essential services on the basis that it operates in the food supply chain, as such the operation of this industry will be allowed.
Shakwa Nyambe & Co Inc has been certified as a critical service provider by the Ministry of Industrialisation and Trade and is allowed to operate during the lockdown period in Namibia. Contact us should you have any legal and business advisory matters to be attended too.