Recently Announced Namibia’s Unemployment Rate at 27% is Flaw, the Real Unemployment Rate is 54%

I’m an Economist, specialized in Macroeconomics, Econometrics, Predictive Analysis, and Economic Development. I obtained my BSc in Economics from The Ohio State University in Columbus, Ohio USA, and I’m currently studying for my PhD in Economics.

The Namibian Statistics Agency recently announced that the unemployment rate in Namibia now stands at 27.4%, which is a whopping drop from the 2008′s estimate unemployment rate of 51%.

First of all, this is impractical for an unemployment rate of any economy anywhere in the world to drop by 23.6% within about 4 years without an economy experiencing a major rapid shock (boost or drop), especially since Namibia’s economic growth has been linear over the years with an average steady growth of about 4%.

In short, unless the Namibia Statistics Agency (NSA) has included those Namibian workers who earn less than N$800 a month, who cannot be and should never be counted as employed since their wages cannot meet their daily living cost, and unless the NSA has included those who have given up looking for work due to the fact that they may have perhaps setup their own shebeens, street-corner makeshift tents to sell candies, and Kapana, who cannot and should never be included as employed due to the fact that their earnings cannot even afford them to pay for their living costs.

Hence, the unemployment rate recently released by NSA is wrong, flaw, and very inaccurate. The real unemployment rate in Namibia is more than 54%.

While else remains constant, numbers cannot lie!

MIT Provosts Stealing Our Groot Industrial Ecosystems Idea?

MIT provost Martin Schmidt and a group of MIT faculty members may be got hold of our documents through our Scientist, Robbie Jena, Co-founder and Chief Strategist of Groot Group, and now they are using our documents at MIT stating how America can rebuild and re-industrialize its economy for better employment creation and sustainability, but they are not giving us credit for it.

It was around June 2009, right after I graduated from The Ohio State University, I was invited by Liberia’s former finance minister, Mr. Braim, at his house in Columbus, Ohio to brainstorm with him on how to help develop and grow Liberia’s economy after many years of civil unrest.

After listening to him and his son, Samuel Braima, my then classmate at The Ohio State University, I informed the ex-finance minister that the better way to help rapidly develop Liberia’s economy, was to setup and develop an economic ecosystem on a certain island, off of the coast of Liberia.

We discussed further how we could go about doing it, and his next step was to go meet with Liberia’s President in order to get her blessing and start with the project, a rapid industrial ecosystem.

In August 2009, I met up with Robert Grier in Columbus, Ohio over a cup of coffee, and we brainstormed on the idea. At that time after we discussed about the idea, Robert informed me about his partner Robbie Jena, a former NASA Scientist, who’s specialized in industrial ecosystems development based on his past China’s success. Then one day Robert and I went to the ex-finance minister’s house in Columbus, Ohio for our continued talk on the idea.

After a month of waiting for the appointment with the Liberian Government Officials for us to brief them on the idea and get started with its planning, development and implementation, there was a silence of waiting, and for us as entrepreneurs, we couldn’t wait, hence we proceeded with our idea’s planning and development, and it has since become, the Groot Rapid Industrial Ecosystem, which is composed of our industrial projects development in Namibia which some that are online now are; Tses Glass, Groot Steel (Otavi Steel), and Sitentu Power Plant.

You can see our Groot Corporate Brochure about our Industrial Ecosystems, look at the date when it was uploaded on SlideShare, March 2011.

It’s an honor to have MIT engineers, scientists, economists and policy specialists, including one Nobel Prize recipient, as well as Policy Makers at the White House looking and modeling on our Industrial Ecosystems development in Namibia, but it would have been better if they (MIT and the White House) had acknowledged us and given us some credit, instead of just using our idea for their own perhaps personification.

The only issue is this; there’s a difference between someone copying or stealing someone’s else idea, and the actual person who actually came up with idea, because in this case, it’s us at Groot Group (Simon Kapenda, Robbie Jena, and Robert Grier), and the one who copies or steals the idea is never capable and delivering the real realization of the idea successfully and efficiently, than the one who actually came up with it, especially us that are already doing it in Namibia.

MIT provost Martin Schmidt, please contact me at simon@grootgroup.com, to get the real practical knowledge on how to implement an industrial ecosystem. See our Groot site at http://www.grootgroup.com/leasing regarding our Groot Industrial Ecosystem

Read more about the White House blog at http://www.whitehouse.gov/blog/2013/02/13/plan-revitalize-american-manufacturing and the MIT statement at http://www.boston.com/businessupdates/2013/02/22/nation-must-rebuild-industrial-ecosystem-spur-manufacturing-says-mit/6sKvKhCsSNwPilbrg5GdqO/story.html

3000 Year-Old Large Underground Aquifer, Medicinal Herbs, Natural Gas, Oil, and Coal in Southern Namibia?

More than 3,000 years ago, where Mariental is now located, and all the way including Tses, all that veld area could once used to be a huge river with massive water, and possibly that water has now become a massive underground aquifer, possibly with more enough water for drinking, agricultural or commercial use to last hundreds of years.

My first trip to Tses in May 2012 for the discovery and establishment of Tses Glass, as we were driving with our friends from Nissi Group, I was explaining to them how unique the landscape between Mariental and Tses looks. On the left side of B1 (south bound), has this unique but distinct feature of a cut-off water, and you can clearly see where the water once reached by looking at the edge of the current land, how the water waves had curled through the upper part of the outer land, to cause the current unique isotope level of water waves as they hit the land.

And when you look at the right side of B1 (south bound), you can clearly see the plain of water, how the water once congregated the whole area, which has now become a large veld, but whatever that water was or still is, it may contain some form of chemicals or simply caused the soil not to be suitable for growing bigger trees any more, and that perhaps for the past 3,000 years, no trees have been able to grow in that area, except some isolated shrubs and grass currently in the area.

Therefore, I won’t be surprised if there’s a load of coal, natural gas, or oil in that veld area between Mariental all the way passing Tses, especially on the banks of the Fish River.

But only a comprehensive and detailed scientific study could prove my stated hypothesis wrong. It will be good to have a team of international scientists to check this out.

Namibia is richly and infinitely endowed with diverse mineral resources for the well-being of the Namibian people, as well as some awesome herbs that could be used for medicinal purpose to possibly cure some of today’s most common diseases and illness around the world.

Could Namibia Experience a Shortage of Workers?

The news article in Yahoo News today about a job creation effect in Ohio by the US Auto Industries shows that they are using a factor of 15.0 to measure their direct and indirect job creation effects, while I use a more modest, which is 5.0, as an average for the Namibia market.

That means, if 54,200 direct jobs in Ohio were created as a result of the auto manufacturers in Ohio, then as the articles shows, the indirect jobs are 850,000; meaning that per each 1 job created, 15 indirect job opportunities are created.

For me, I use a factor or 5, meaning that per each 1 direct job created, then 5 more indirect jobs are created. This is more modest and conservative in lieu of the Namibian mentality (always questioning if this or that is possible), but I don’t deem my factor to be the preferred perfect one.

But if I use a factor of 15, then Tses Glass as it’s estimated to create 47,900 direct jobs in Tses alone, then 718,500 indirect job opportunities will be created throughout Namibia as a result of the Tses Glass factory in Tses, and Otavi Steel as it’s estimated to employ 25,000 direct jobs in Otavi, then the indirect job opportunities in Namibia to be created from the Otavi Steel mill is 375,000.

For a total of about 1.1 million new direct and indirect job opportunities throughout Namibia to be created as a result of just two industrial projects; Otavi Steel and Tses Glass.

However, the Namibia’s workforce is only about 729,000; and if 15 is the factor to be used for the direct and indirect jobs’ creation effects, then Namibia is expected to experience a huge shortage of workforce when these two projects are commissioned at full capacity.

This shortage of the workforce could have a possible “cause-and-effect” trigger;- an exponential high rise in salary and wages compensation throughout Namibia, but with a sudden high inflationary pressure in Namibia.

Yes, Rome was not built overnight, so don’t expect these two industrial projects to be realized overnight, good things take time to develop and implement; as there are several factors to be done; planning, technical issues, politics, etc., before bricks are laid down and the ignition button can be pressed for the production starting of the factories.

We’re working!

Developing Rural Namibia: How to Develop an Economic Depressed Rural Area Into a Thriving Economic Urban Center?

I realize that most city, town and village councils in Namibia may not really know how to actually attract and keep industrial businesses in their areas.

Rather, they tend to wait on the central government to direct them and basically mouth-feed them by attracting and getting investment on their behalf for their areas. And this is not how it works, hence most cities, towns and villages in urban and rural Namibia are facing high economic hardship and pressure for their municipalities and residents.

I have written about this before, on how a town or village can help attract an investment to its area; and in short, here is how it may happen;

Let’s say for example, Oikokola in Omusati Region wants to attract BMW in Germany to come and setup a manufacturing factory in Oikokola. Because the Oikokola village council knows exactly the massive socio-economic benefits rippling throughout the country just by having one BMW manufacturing plant in their area; that’s – one BMW Manufacturing Plant, let’s say employing more than 1500 people, can help effect a massive economic ecosystem in the same area; because out of that 1500 employees, there could be more than 7500 indirect employees.

How’s that? Based on my “Job Multiplier Effect Model”, which is based on my economic differentiation and derivative formulation, that’s per each “one” direct employee, “five” more indirect employment opportunities are created. So, just by having more than 9,000+ employees (1500+7500) in Oikokola; don’t forget that possibly per each employee could have 3 additional family members in his or her household, and that makes Oikokola to have more than 27,000 new residents, as a result of just one BMW Manufacturing Plant, that nearly makes Oikokola to become a major town with great and profitable socio-economic benefits that would ripple throughout the entire economy of the country.

Because the Oikokola town council has done its economic analysis on having such a Manufacturing Plant in its area, it serves best to have the Oikokola Village Council to select a team of delegates among its staff, and send them to BMW in Germany.

When they get there, they would have already prepared two first class-return flights for two BMW Executives, from Germany to Namibia, then they would also have prepared a first-class ground transportation to and from Windhoek to Oikokola, with first class hotel accommodation as well as lodging (food).

When they get to BMW in Germany, they would hold their meeting with the BMW executives; obviously they should have already made arrangement to meet with those executives responsible for international business development at BMW prior to going there. A the meeting, after their brief introductory summary, then they simply inform the BMW executives that, they have everything prepared; first class flight to and back from Namibia, ground transportation, food etc., so that they simply board the flight and come to Namibia.

Now, since everything is already prepared, and BMW or their executives don’t have to incur any expenses; they would be gladly interested in taking the trip; most executives would regard the trip as a vacation and would love it.

Obviously, it would not be on the same day; the village council would want to have an ample time before the BMW executives arrive in Namibia. So the village council should first go back to Oikokola and inform their local officials and residents that on that specific date, there would be special guests from BMW in Germany to come and visit the area for a possible investment project, that could help create jobs for the residents and improve economic condition of the area.

Then when that date comes; everyone should be ready to welcome the guests; with well-organized joyous celebrations, food, and orchestrated dances, and everything, so that the first thing that those BMW executives would see, would be happy faces of people excited to see them and welcome them. That by itself would likely make the BMW executives very excited just the fact that the locals are excited to see them.

Then the village council after they have officially welcomed them, then they take them to a meeting conference and make a presentation on what their area has to offer, in terms of available land, economic incentives, labor, and capital that would be of great benefit to BMW to have a manufacturing plant set up in the Oikokola area. In the presentation, it should include everything else; such as tax benefits that would entice BMW to come to Oikokola to setup a manufacturing plant.

After the presentation, then the village council should take the executives on a special tour for the area; show them around the area, and then take them to the land that the village council has allocated for the BMW Manufacturing Plant.

At that land site; the village council should entice the executives with eloquent talk and discussion and try to close the deal with them without being forceful, to have BMW setup a manufacturing plant there. Because of how everything are organized, BMW could possibly agree to set up a Manufacturing Plant there for the BMW automobiles, car parts, engines, or perhaps recommend their partners to do so. This is how town, village or city councils should do, to try to attract investment projects to their areas.

However, it only works best if the Council members actually know what to do; what investment is suitable for their area, as each area has its own comparative advantages; where to start, who to contact and how to actually do it to get the needed appointment with the company, anywhere in the world. And it doesn’t have to be BMW, it can be any company in the world, depends on what your area has to offer.

This is where we at Groot Group come in – we know how to do this; from conducting economic analysis for any area, and we are very connected globally to most of the world’s largest companies. Hence it has great benefits to work with us in order to help develop your village, town or city by bringing investment and industrial projects to your area that would forever help transform your area; for your residents, for the sake of the overall country’s economic growth. Because as an elected council member, you have responsibilities to your constituents; hence get up and do something real tangible to help grow your area – overall, you’re interested in getting re-elected or be appointed to a high post some day.

The above is just an example on how you may possibly attract investment projects to your area; however in reality – for the sake of Oikokola, a rural area in Omusati Region, we at Groot Group and SDS Group, have a team arriving from India for our Sitentu Food Processing Plant development in Oikokola and Nkurenkuru.

And given that Oikokola is currently just a rural area with basically nothing except the current residents and no nothing else; watch as we transform it from its current status to a major urban center within the next 5 years.

Our planned Sitentu Food Processing Plant in Oikokola (likewise Nkurenkuru) will employ 3,000+ workers at each location, with indirect employees of more than 7,500. Those workers will need proper housing for their stay, they will need retail stores for their everyday shopping need, Oshakati is too far for them, they will need clinics, barbershops, etc., basically they will need all the basic infrastructure as required for their well-being and better living, and obviously, we will depend on entrepreneurs to set up those businesses and services for the future workers of Oikokola and likewise, Nkurenkuru.

Why Oikokola and Nkurenkuru? We are targeting both the rural Namibian and rural Angolan informal farmers to benefit from their hard farm labor. This is the economic transformation vision of our Company; creating powerful economic linkages between rural and urban centers.

Smart working and planning, with the support of the local, regional and central government can have great positive economic impacts for an improved living condition of the people in the economy (country).

I want and hope to make Namibia as a spring platform for economic transformation for the whole of Africa. It’s time for Africa to improve her economy to benefit her people. Political economy is long dead, the future is rapid industrialization based on the Groot Group Economic Ecosystem Model.

Email me at simon@grootgroup.com with questions on how we can help you get the most investment project for your area.

I’m a Neuroeconomist and Entrepreneur; CEO and Co-Founder of Groot Group at www.grootgroup.com; as well as Managing-Director and Co-Founder of Tses Glass (Pty) Ltd, as well as Co-Founder and Project Director of Otavi Steel (Pty) Ltd, and Sitentu Power Plant (Pty) Ltd. I’m a Nominee of the Prestigious 2012 Africa Awards for Entrepreneurship.

Bank of Namibia’s Lowering the Repo Rate – What Does It Mean for You?

The Bank of Namibia, the central bank of Namibia, last week announced that it has reduced the repo rate to 5.5%, which is now at the lowest level since independence in 1990 while the prime lending rate is now at its lowest level since May 1974 when interest rates stood at 9%. (Economist.com.na).

But will this help you? The repo rate is the rate of interest that commercial banks such as Standard Bank, FNB, Nedbank, and Bank Windhoek charge each other; for example; if Standard Bank is possibly temporarily short of cash, it may apply for a loan from FNB or perhaps from BoN at that repo rate which it must pay it back at most within 24 hours.

Now, since the repo rate is lower, that means these commercial banks should charge lower interest rates on your new loan application. This is done basically that BoN is trying to encourage loan lending in the economy; to help increase cash flow and hence spending in the economy, and this could help increase or boost economic activities, hence economic growth on the macro level.

But does this work in Namibia? Perhaps not; with the unemployment rate in Namibia I’ve estimated it to currently be at 54%, that means more than half of the Namibian people are unable to apply and be qualified for personal loans. And those who are currently employed still may not be able to apply and get qualified for personal bank loans as desired due to; either that their salary and wages are lower or simply that most Namibians’ personal credit history reports have accumulated to an high adverse ratings that for most to apply and get qualified for personal loans at the four mentioned commercial banks in Namibia may not be possible.

So how does the lowering of the repo rate help the economy? Well, may be not much, but it’s better than nothing.

And just because the repo rate is lower, this may not mean that these four commercial banks will actually lower their interest rates on your personal loan need; as their ultimate goal is profit making and not charity, and due to a possible lower demand (persons applying and get qualified for personal loans) vs the limited supply of commercial banks available in Namibia, these banks may not even succumb to lowering the current interest rate on your next personal loan application.

In short; the current lowering of the BoN’s repo rate may simply mean peanuts to most of the Namibian people.

What are the Socio-and-Macroeconomic Impact by Otavi Steel and Tses Glass?

The development of the Tses Glass Manufacturing Plant in Tses, Southern Namibia and the Otavi Steel Mill in Otavi, Northcentral Namibia, are estimated to have an exponential positive impact on the Namibian macro economy, as they will each cause to affect nearly every sector; from energy, water, roads, railway, shipping, mining, human capital, medical clinics, agriculture, education, and more.

These two industrial projects alone, are economic ecosystems by themselves, as more downstream developers and investors are expected to flock to the Tses and Otavi area to setup new interlinked businesses in order to offer diverse products and services for the Tses Glass and Otavi Steel workers.

Tses Glass and Otavi Steel have an estimated combined development and construction budget of US$9 billion (N$73.8 billion). The total estimated employment creation to be effected by their implementation is 58,000 direct jobs and 290,000 indirect sustainable job opportunities throughout Namibia.

Namibia currently has a population of about 2.2 million with an estimated workforce of about 33% or 729,000 of the population. The total current unemployment rate in Namibia is estimated at about 54%, which is about 393,700 of the Namibian workforce. With the development and upon the implementation of Otavi Steel and Tses Glass, these two industrial projects alone are projected to overall reduce Namibia’s unemployment from nearly 393,700 to 103,700, which is about 14% of the estimated 54% unemployment rate.

Now take the total value of the final products by these two projects alone per their planned annual gross production capacity, which the value is easy to determine as these products; the steel and glass, are traded openly on the market, hence the market price for each industry (glass and steel) is readily available, then they will add about US$37 billion (N$300 billion) value to Namibia’s GDP.

And this is a very good thing for Namibia.

The soonest we can all work together in our different capacity, the sooner we can help make this happen for Namibia and the Namibian people.