15 000 employees retrenched in two years
Labour productivity threatened
Most retrenchments occurred in the accommodation, wholesale and retail and mining sectors.
PHILLEPUS UUSIKU
The outbreak of the Covid-19 pandemic had devastating social and economic effects, leading to job loses, increased expenditure and high debt levels.
Throughout the pandemic, March 2020 to date, about 15 000 retrenchments (0.6% of the population) took place, while about 4 016 Namibians died (0.2% of the population), according Simonis Storm (SS).
“These are job losses that we know about, we suspect that a lot more jobs were lost that are unrecorded. “
Most retrenchments occurred in the accommodation, wholesale and retail and mining sectors. This means that for every one Covid death-19, there were almost four individuals who lost their jobs.
In addition, numerous employees across different sectors were offered early retirement packages and the liquidation of Air Namibia also led to job losses.
This could have led to numerous one-third tax free benefits being withdrawn from pension funds and potentially individuals withdrawing monthly salaries from their pension funds if they converted their pension funds into living annuities to replace lost incomes, SS said.
Simonis notes that national lockdowns have led to secondary mental health effects as a result of keeping individuals isolated in confined spaces. Different countries across the globe have seen a rise in alcohol and drug abuse, suicides and mental disorders such as depression.
“While mental health statistics are very hard to come by in Namibia, we know that these factors have increased in Namibia following the lockdown, based on discussions with both private and public psychiatric healthcare workers.”
In addition to mental health effects, long-term aftereffects of Covid-19 such as lung and brain damage, breathing problems and heart complications also pose as long run economic and social costs.
A rise in these social issues and mental health disorders can have long-term impacts on labour productivity, educational outcomes of young people and misallocations in household budgets away from basic care spend to alcohol and drugs for example. These risks do not receive sufficient attention in the policy environment and could lead to socioeconomic costs incurred by the economy in future, Simonis Storm said.
Interventions
Government’s fiscal stimulus package of N$9.1 billion – about 5% of gross domestic product (GDP) – was allocated as follows:
• N$3.7 billion for VAT refunds.
• N$1.3 billion for unpaid invoices from service providers.
• N$1 billion for government backed loans for paid up taxpayers who can apply for a loan worth one month’s tax payments.
• N$727.7 million for expanding the health system’s capacity by the procurement of medical equipment and supplies, Intensive Care Unit (ICU) beds, Personal Protective Equipment (PPE), isolation facilities and related supplies.
• N$624 million in government backed loans were given to Development Bank of Namibia (N$450 million) and Agribank (N$174 million).
• N$576 million for the Emergency Income Grant which was paid out to 769 000 Namibians.
• N$500 million was made available to commercial banks as government backed loans to the private sector.
• N$468 million to renovate 97 ablution facilities (and construction of 121 new units), renovation of 36 school hostels (and construction of 35 new hostels) and connection of 113 schools to piped or borehole water.
• N$78.8 million for employee salary protection paid to 21 359 employees.
• N$72 million for water supply in urban and rural areas.
• N$27.9 million for wage subsidies paid to 230 employers.
• N$22 million Covid-19 related medical supplies for the security sector.
The above stimulus package was about 12.6% of total government expenditure in the financial year (FY) 2020/21 and widened the budget deficit as a percentage of GDP from -3.0% to -8.1%. At the same time, total government debt increased from N$101.2 billion in first quarter of (1Q2020) to N$106.6 billion in 2Q2020, N$106.8 in 3Q2020 and N$110.3 billion in 4Q2020.
Whether these policies were effective at protecting jobs, preventing gains in poverty alleviation being lost and stimulating economic growth is largely debatable, Simonis said.
[email protected]
The outbreak of the Covid-19 pandemic had devastating social and economic effects, leading to job loses, increased expenditure and high debt levels.
Throughout the pandemic, March 2020 to date, about 15 000 retrenchments (0.6% of the population) took place, while about 4 016 Namibians died (0.2% of the population), according Simonis Storm (SS).
“These are job losses that we know about, we suspect that a lot more jobs were lost that are unrecorded. “
Most retrenchments occurred in the accommodation, wholesale and retail and mining sectors. This means that for every one Covid death-19, there were almost four individuals who lost their jobs.
In addition, numerous employees across different sectors were offered early retirement packages and the liquidation of Air Namibia also led to job losses.
This could have led to numerous one-third tax free benefits being withdrawn from pension funds and potentially individuals withdrawing monthly salaries from their pension funds if they converted their pension funds into living annuities to replace lost incomes, SS said.
Simonis notes that national lockdowns have led to secondary mental health effects as a result of keeping individuals isolated in confined spaces. Different countries across the globe have seen a rise in alcohol and drug abuse, suicides and mental disorders such as depression.
“While mental health statistics are very hard to come by in Namibia, we know that these factors have increased in Namibia following the lockdown, based on discussions with both private and public psychiatric healthcare workers.”
In addition to mental health effects, long-term aftereffects of Covid-19 such as lung and brain damage, breathing problems and heart complications also pose as long run economic and social costs.
A rise in these social issues and mental health disorders can have long-term impacts on labour productivity, educational outcomes of young people and misallocations in household budgets away from basic care spend to alcohol and drugs for example. These risks do not receive sufficient attention in the policy environment and could lead to socioeconomic costs incurred by the economy in future, Simonis Storm said.
Interventions
Government’s fiscal stimulus package of N$9.1 billion – about 5% of gross domestic product (GDP) – was allocated as follows:
• N$3.7 billion for VAT refunds.
• N$1.3 billion for unpaid invoices from service providers.
• N$1 billion for government backed loans for paid up taxpayers who can apply for a loan worth one month’s tax payments.
• N$727.7 million for expanding the health system’s capacity by the procurement of medical equipment and supplies, Intensive Care Unit (ICU) beds, Personal Protective Equipment (PPE), isolation facilities and related supplies.
• N$624 million in government backed loans were given to Development Bank of Namibia (N$450 million) and Agribank (N$174 million).
• N$576 million for the Emergency Income Grant which was paid out to 769 000 Namibians.
• N$500 million was made available to commercial banks as government backed loans to the private sector.
• N$468 million to renovate 97 ablution facilities (and construction of 121 new units), renovation of 36 school hostels (and construction of 35 new hostels) and connection of 113 schools to piped or borehole water.
• N$78.8 million for employee salary protection paid to 21 359 employees.
• N$72 million for water supply in urban and rural areas.
• N$27.9 million for wage subsidies paid to 230 employers.
• N$22 million Covid-19 related medical supplies for the security sector.
The above stimulus package was about 12.6% of total government expenditure in the financial year (FY) 2020/21 and widened the budget deficit as a percentage of GDP from -3.0% to -8.1%. At the same time, total government debt increased from N$101.2 billion in first quarter of (1Q2020) to N$106.6 billion in 2Q2020, N$106.8 in 3Q2020 and N$110.3 billion in 4Q2020.
Whether these policies were effective at protecting jobs, preventing gains in poverty alleviation being lost and stimulating economic growth is largely debatable, Simonis said.
[email protected]
Comments
Namibian Sun
No comments have been left on this article