SMEs must become Namibia’s economic engine

John Steytler
  • 3 Hours Ago
Namibia is at the precipice. The numbers are stark, the trends alarming, and the urgency undeniable. According to Cirrus Capital’s Robert McGregor, the number of individuals identifying as employers decreased from approximately 45,000 in 2018 to 15,000 in 2023. In just five years, our country has lost approximately 30,000 businesses, the majority of which are small and medium-sized enterprises (SMEs). This collapse is not merely a statistic; it is a siren for the future of our economy, our youth, and our national stability.



SMEs are the backbone of any thriving economy. If this trajectory continues, Namibia risks hollowing out its entrepreneurial base, leaving behind an economy that cannot generate jobs, innovation, or sustainable growth.



The Namibian Statistics Agency reports youth unemployment at 44.4% in 2023. When discouraged job seekers are included, the broader rate rises to a staggering 61.4%. Urban youth face even higher unemployment than their rural counterparts. Aside from the economic challenge, it is also a social crisis. Young Namibians are being locked out of opportunity, fueling frustration, dependency, and disillusionment.



Equally troubling is the lack of entrepreneurial ambition among our youth. Only 19% of Namibians aged 18 to 35 say they would choose to start their own business if given the opportunity, according to Afrobarometer. It makes Namibia’s youth the least entrepreneurial in Africa, although they represent 2.1 million of our three million citizens. But who can blame them? The majority of our population is young, but they are not being empowered or inspired to build businesses that drive growth.



The collapse of SMEs is not accidental. It is the result of systemic barriers that suffocate innovation and discourage risk-taking. Rules, regulations, taxes, salaries, and outdated policies form a web of obstacles that make entrepreneurship in Namibia a high-risk, low-reward endeavor.



Regulatory burdens: Complex licensing requirements and bureaucratic red tape delay business formation and expansion.

Tax pressures: SMEs face disproportionate tax obligations compared to their limited capacity, eroding profitability. There’s a lot of risk, almost no reward.

Rigid labor policies: Salary structures and compliance costs weigh heavily on small employers, discouraging hiring and job creation.

The result is predictable: businesses close, jobs disappear, and potential entrepreneurs opt for safer paths rather than risk failure in an unforgiving system.



Despite these challenges, SMEs remain the most viable path to grassroots economic revival. Large corporations and foreign investment play important roles, but they cannot absorb the sheer scale of Namibia’s unemployed youth. SMEs, by contrast, are nimble, community-based, and capable of creating jobs quickly. They are the natural incubators of innovation and the engines of inclusive growth.



To unlock this potential, Namibia must urgently reposition SMEs at the center of its economic strategy. Unlocking this potential requires bold reforms, not incremental adjustments. We cannot afford to tinker in the margins while the entrepreneurial base collapses.



Although Ministerial task forces are sometimes created to give the perception of activity, in this case, a task force dedicated to SME revitalization is a must. Such a taskforce needs to cut across ministries, bringing together finance, trade, labor, and youth development under a unified mandate: to remove barriers, incentivize entrepreneurship, and restore confidence in Namibia’s business environment.



Key priorities should include:



Regulatory reform: Streamline licensing and compliance processes to make it easier to start and grow businesses.

Tax incentives: Provide targeted relief for SMEs, especially those creating jobs for youth. Let there be some real reward for their risk-taking and investment.

Access to finance: Expand credit facilities and reduce collateral requirements for small businesses.

Entrepreneurship education: Embed business skills into the curriculum to inspire and equip young Namibians.

Digital Transformation: Supporting SMEs in Adopting Technology to Compete in Regional and Global Markets.

This task force must operate with urgency, transparency, and accountability. Its success should be measured not in reports, but in the number of businesses created, jobs sustained, and youth empowered.



Namibia cannot afford another five years of decline. Losing 30,000 employers is not just a setback: it is a national emergency. Every closed SME represents lost jobs, lost innovation, and lost hope. If we fail to act, the consequences will reverberate for decades, leaving us with a stagnant economy and a disillusioned generation.



The urgency is evident. The risks are real. The rewards, if we succeed, will be transformative. Namibia must act now.