Bank of Namibia Raises the Interest Rate, Which is Bad for the Economy

This week the Bank of Namibia has raised the Interest Repo Rate; so what does that mean for you as a consumer?

When the Central Bank, Bank of Namibia, raises the interest rate, it means a few things; it wants to control the inflation, because there’s too much cash floating in the economy, it wants to reduce economic growth, it means more other things.

So when the Central Bank increases its interest rate, then commercial banks and lending institutions will also raise their interest rate in proportion with the Central Bank’s interest rate.

By doing so, it becomes a bit more expensive to borrow money; your house or car or personal loan may become a bit more expensive due to the fact that your interest rate for your loan also goes up, making it more expensive for you to apply for a loan.

When it is expensive to apply for a loan, then more and more people are likely to cut down on their loan applications, and as such less money flows in the economy as a result. When less money flows in the economy, people reduce on their consumer spending, which further reduces the demand for the consumer goods; meaning that less people are buying goods and services. When the demands for the consumer goods and services decreases, then prices of goods sharply fall in the economy; things become a bit more cheaper as more sellers try to seduce customers to demand more by buying more.

This is the general rule of the demand and supply; when less customers are buying, you reduce your selling price. Hence the inflation (price of goods) in the economy goes down. Inflation is the sharp raise of prices in the economy. When the demands in the economy decrease, then the suppliers further cut down on their supplying of goods (slowing down on their manufacturing or importing of goods). When suppliers cut down on their manufacturing of goods and further decrease on their imports, then more employers also cut down on the number of employees, then jobless increases in the economy. Then the economic growth goes in the slow down mode.

Now the question is; why would the Bank of Namibia raises the interest rate at this time especially when the value of the Namibian dollar currency is already down due to the weak South African Rand and the strong US dollar? What is the Bank of Namibia trying to achieve by slowing down the Namibian economic growth given the fact that the unemployment rate is already high? OK, the Bank of Namibia wants to cut down on the inflation, but can this really help the economy at this time?

Is this the right time to raise the interest rate?

(I’m a Neuroeconomist, with high interests in macroeconomics, econometrics, systems dynamic, business and financial analysis.)

An Open Letter to H.E. President Dr. Hage Geingob – Namibia: Road Map to Recovery, Poverty Eradication and Sustainable Economic Liberation

AN OPEN LETTER TO H.E. PRESIDENT DR. HAGE GEINGOB

December 21, 2015

His Excellency
Dr. Hage Geingob, President
Republic of Namibia

NAMIBIA: ROAD MAP TO RECOVERY, POVERTY ERADICATION AND SUSTAINABLE ECONOMIC LIBERATION:

Your Excellency,

Preamble – The travail: The travails of Africa and her people, their struggles against the burden of deprivation, shackles of poverty, the onslaught of sickness and diseases, the pangs of hunger, the continued systematic stripping and pitiless plundering of her human and natural resources dates back to the times before the dark days of slave trade. Foreign policies on Economic Cooperation and Sustainable Developments of the Governments of Advanced Nations have continued to deliberately (as it were), raise the bars beyond the reach of Africa, given her peculiar situation of poverty, lack of development, Economic instability etc, whereas the Advanced world has never ceased to depend on Africa’s natural and human resources responsible for the significant strides that these Nations have made in their overall Economic Developments.

Africa is thus caught in this irony of starvation in the midst of super abundance. Our situation as a people is comparable to a fish dying of thirst in its natural environment.

On a larger part, the world depends on Africa for proper development, but where is Africa in the place of the gains? Statistically, the figures are heart rending.

The wealth of Africa’s natural endowments includes such resources that are classified under Rare Earth Elements (REEs) category and Namibia is not left behind on this list of “these blessed few.” Further statistics reveal Africa holding large reserves of Oil and Gas and other resources in the following order:

Gold – Africa contributes 21% of world output
Diamonds – about 46% of global production comes from Africa Botswana alone staking 22%, DRC following with 20% and the remaining 4% scattered among other producing nations on the Continent.
Copper – Africa holds 6% of world output
Africa produces 75% of the world’s platinum led by South Africa and closely followed by Zimbabwe.
For Aluminum, 5% of the world’s total output comes out of Africa. South Africa takes the Regional lead followed by Zimbabwe and Egypt.
Buxite – Africa supplies 8% of world output and that comes from Guinea whose iron ore is also acclaimed as among the world’s finest.

On the whole, the following define Africa’s standing: Uranium, Coal, Iron Ore, Tin, Phosphates, Gold, Molybdenum, Gypsum, Salt, Petroleum Phosphates, Manganese, Lead, Zinc, Fish, Titanium, Natural Gas, Hydropower, Tantalum, Graphite Diamonds, Copper, Silver, Lead, Lithium, Cadmium, Tungsten, Zinc, Salt, Cassiterite (Tin Ore), Wolframite (Tungsten Ore), Methane, Arable Land, Bauxite, Chromite, Gypsum, Nickel, Rare Earth Elements, Gem Diamonds, Vanadium, Asbestos, Coal, Clay, Forests, Quarry Stone, And Talc, Emeralds and a large unexploited reserves of different resources.

Unfortunately, under Foreign Direct Investments (FDIs), the attention of Investors focuses more on these natural recourses while successive administrations of the host Nations channel all their energies more on the same repeated circle of exports driven economy with little or no attention given to or plans made towards large-scale, home grown manufacturing or Industrial development capable of abundant job creation for poverty alleviation and its final eradication.

The question is: with all that we have as a people, sincerely should we be economically in the present position that we have now found ourselves today? No, definitely not. That we are here only confirms that something is seriously wrong and to correct the imbalance, we must clearly define what we truly want to achieve and follow through on the plan of action beyond mere words as has always been the practice as recorded in our historical accounts of past governments.

Namibia: Namibia boasts of such natural resources as diamonds, copper, uranium, gold, silver, lead, tin, lithium, cadmium, tungsten, zinc, salt, hydropower, fish and according to “The World Fact Book” on Field listing of Natural resources, there are also “suspected deposits of oil, coal, and iron ore” in Namibia.

The icing on the cake is this –Namibia has the highest reserves of Uranium, making this country #1 in Africa and 4th largest producer in the world, followed only by Niger as 2nd in Africa and 5th in the world. This standing does not suggest Namibia as a poor country, but the practical translation of this wealth or its reflection on the citizenry does not hold the reality. We should be doing better.

Vision of the Fathers: Your Excellency, our dear Nation, Namibia has suffered. It is no longer keenly needful to recount the woes and re-paint now again graphically, the gruesome picture of our mutilated fallen heroes and heroines who, propelled by their quest for Namibia’s true identity and the freedom of her sons and daughters, braved the odds and made major sacrifices in the battle for her soul.

Of these, the living minority are today, permanently “decorated” in brutal scars as their priceless trophies in the battle for the soul of our beloved country. Your good self are not unaware of those dark days when Namibia groaned under the yoke of bondage, shackled in poverty and plundered while her children famished like orphans. The vision of our fathers and the strength and courage they found to fight for Namibia’s release and the freedom of her children was fueled by the faith they had in this Nation’s tomorrow – a country of liberated people, freed from poverty to flourish in prosperity and sprawling Economic Development, capable of confronting and withstanding the modern global challenges. The tomorrow they saw that fueled their passion to fight, to suffer and to die is today.

Your Excellency, can you in all honesty say that Namibia’s present National Development and Economic Prosperity has in any way in the least justified the sacrifices of these noble men and women who gave their all for her liberty and prosperity of her sons and daughters? Is their sacrifice truly justified today?

Sounding the Empty Song: For Namibia, these woes and travails of the past are still far from over. Her freedom is only in the status of her personal identity as an entity, a sovereign Nation. Beyond this, the manacles of deprivation and hallmark of bondage are still evident upon her like an escaped convict who breaths the air of freedom while still enrobed in the prison garments.

The reflection of poverty and bondage still strongly gleams on our people thus, the efforts of all successive administrations, having done their very best to dress Namibia befittingly and present her to the world as a prosperous Nation have all fallen short, making all the promises they made prior to ascending to power seem like mere exercise of routinely sounding the empty Executive song.

In spite of their genuine efforts and good intentions, they left more promises behind than fulfilling them. These were good people who meant well for Namibia, but they all made the same mistake of looking in the wrong direction and going all alone on glory seeking quest, just to make a name in their effort to lift this Nation out of the ashes.

This great opportunity is now upon you, Cde. President, and your Administration to satisfy the yearnings of the Namibian people. We are here to support you and partner with you if you will accept our hand of partnership. We have what it takes and through a healthy collaboration, we can achieve all desired goals.

Objective: Your Excellency, the purpose of this letter is first of all to publicly declare to you my unreserved support for your developmental goal of Poverty eradication as I have also practically demonstrated in my efforts since returning to Namibia from America where I have lived for the past 26 years.

Secondly, this is my public call to the good people of Namibia to wholeheartedly join us in this war against poverty that you have declared, which is the only guaranteed economic liberation for our dear Nation.

I, Simon Kapenda, have no interest in politics; however, my entrepreneurial skills and your political position can blend into a formidable force against Poverty in Namibia.

The pains, the gains: I come from the background of knowing what pain and suffering means. I started my academic journey at Omunkete Combined School near Oshikuku in Northern Namibia. It was at the time when our dear Nation Namibia still groaned under the weight and pain of the infamous and dehumanizing apartheid regime of South Africa.

I saw the suffering of our people, I also feared greatly as the bullets of the KOEVOET zipped by over our head many times that I came close to extinction. I and my family escaped death many times during the apartheid era, but we were left with the permanent memory in our hearts and minds that became a constant yearning for freedom and liberation.

For me, it was not only liberation from the evil Regime of apartheid but from everything that wore the resemblance of enslavement – including poverty, deprivation, backwardness and every ills of life.

The pains and burdens of my heart gave me an even greater determination to race harder towards success, to be free and to achieve. When I proceeded to the United States of America in pursuit of higher Academic Excellence, I held at the core of all my endeavours the drive to master the skills and tactics of successful warfare against deprivation.

I graduated from The Ohio State University in Columbus, Ohio USA in 2009 (BSc. Economics) with decent scores regardless of my personal hardship of working full-time as a small business owner while at the same I was studying full-time. I am currently pursuing my PhD program in Economics. My intern job at UBS Financial Services Inc in 2008 was a personal self-test run that I did as a field evaluation of my skills, training and personal development, which held out successfully when I made a mark as an Investment Analyst Intern at UBS Financial Services Inc in Columbus, Ohio the whole of twelve months of 2008. Impressed by my outstanding performance, UBS made me an offer of permanent employment as an Investment Analyst at its Wall Street offices with a mouthwatering salary plus bonuses of US$2.5 million per annum which I declined due to the idea I had to launch Groot Systems (formerly Groot Group) in the same year for the sole purpose of implementing Rapid Industrial and Economic Development of my beloved birth country Namibia, under our specially structured system which we call “Groot’s Advanced Industrial Ecosystem” (GAIE).

Our Industrial plan of action, GAEI, is based on careful research and conscious planning that takes into account the current global economic realities. On the ground here in Namibia and currently making appreciable progress are Groot’s six self-sustainable and interdependent mega projects with over 20 others in the pipeline awaiting their timely release to boost self-sustainability and complementary support to our running infrastructure.

Groot’s Advanced Industrial Ecosystem is a special infrastructural system of creating a holistic developmental framework that encourages multiple industrial units to grow as self-sustainable entities while at the same time fully interdependent, each serving as an integral part of the other and collectively unleashing a fast-paced massive economic ripple effect, resulting in a Large Scale job creation and Sustainable Economic Development.

Your Excellency, through God’s enablement and His Grace, my struggles to start and successfully develop and operate my small business in the USA since 1995 as well as pay my way through school paid off eventually and I had it all going for me in the United States where I still maintain my home in Beverly Hills, a suburb of Los Angeles, California.

Nevertheless, compelled by my love for the fatherland and the vision and the costly sacrifices of the fathers of Namibia for her greater tomorrow, it became my turn to give up my comfort so, I returned to contribute my quota to help take Namibia to her rightful place among the community of Nations. This is what I have continued to do since my arrival back into the country. Since 2010, Groot has worked tenaciously towards actualization of this dream. It is on this note that Your Excellency’s declaration of an all out War against Poverty and its eventual eradication by 2020 came as a long awaited welcome development.

At Groot, our support for your laudable program of War Against Poverty is only natural as this Developmental goal seamlessly aligns with our Groot vision.

Therefore, our support for this agenda is beyond moral as we have readily plunged into the mainstream and this we have done wholeheartedly. Over the years, we have holistically spent about N$25 million in planning, traveling, consultations, infrastructure, equipment and building of systems and always focusing on the vision of Industrial Development and Economic prosperity for Namibia. We have made tremendous sacrifices all in the effort that our pains may translate to the overall gains of the good people of Namibia, for our country, our people, our pride. We are doing all these at our cost.

Our Open Score Card: This is what our efforts have yielded so far since we started out.

Tses Glass: In 2012, we launched Tses Glass – a US$700 million mega Glass Infrastructure project development in Tses and the first of its kind in Africa. The immediate positive result as can be seen today in Tses is the instant transformation as Tses Village is poised to become a commercial nerve center in //Karas Region. According to Mr. Vries, then CEO of Tses Village Council, “Tses is now just full of people, it feels like an Industrial City.”

Tses Glass is structured out in two mega factories. Our Container Glass factory is dedicated to the manufacture of glass bottles, exotic wine glasses, berets, conical flasks measuring cylinders, scientific equipment of glass nature and every form of glassware designed to hold or contain.

The second Factory, our Float Glass Factory will manufacture glass for industrial needs like windows for housing, vehicles, optical glass for medical and other uses, photovoltaic (PV) for solar panels, ultra-thin glass for special purposes including but not limited to displays, computer or TV screens, cell phones, tablets, various mobile communication and hi-tech devices.

Under our Mandatory Strategic Orientation (MSO), 670 general construction workers for Tses Glass Factories are billed to complete their training and commence work fully on the Construction of Tses Glass Factories starting in early 2016. Beside the construction workers, a 300 member executive management team will lead the workforce into successful implementation of the Groot dream of Tses Glass in Tses.

All our workers and employees are paid the minimum wage of N$35 per hour, fed one meal per day and are entitled to medical facilities and other generous fringe benefits. We do this to aptly define poverty eradication in this practical introduction to improved lifestyle. In addition, we plan to provide 800 units of Prefab Houses for accommodation of our construction workers in Tses at the cost of more than N$154 million. All of this is done at our cost as our active contribution to the Nation building efforts of Government.

Tses Glass aims at driving the local economy and for the export market. When fully operational, Tses Glass will create 7,000 direct, better paying jobs and about 47,000 indirect jobs in Tses and throughout Namibia as our contribution to ending the unnecessary suffering of our people for a better Namibia.

Tses Wi-Fi: Many developmental ideas complementary to Tses Glass and the Transformation of Tses Village include a 30 kilometer radius coverage of high speed broad band free Internet access via Wi-Fi platform which will give free internet connectivity to anyone within 30km of Tses Village, delivered right on their Internet enabled mobile devices of any description. Relevant agreements have already been signed for the provision of this service. The provision of the free Internet services in Tses and Construction of 400 housing units by Groot Construction, which shall be donated to Tses Village, is our way of practically changing lives and giving back to society.

Tses Solar: Designed to be implemented under the Power Division of Groot Systems (Groot Power), the deployment of our 60MW Solar (PV) Power Plant in Tses will give a new lease of life and stable assurance of business operations in Tses. Manned by Groot Systems and partners, the N$500million mega 60MW Solar (PV) Power Plant in Tses will supply clean, safe and renewable electricity to Tses Glass factories and the Tses municipality.

Groot Construction: We envision Groot Construction (Pty) Ltd, the construction arm of Groot Systems to become a leading Namibian Civil Engineering and Construction Contractor known for its professionalism and high quality work throughout Namibia and beyond. Groot Construction is teaming up with a Philippines-based civil engineering company, to work under the Ukrainian general contractors and civil engineering companies for the construction of the Tses Glass factories. All our recruited 670 construction workers in Tses fall under Groot Construction as the local based company and its Ukrainian and The Philippines engineering partners. Groot Construction provides critical engineering and construction for infrastructure projects on a turnkey basis.

Groot Steel – Omutwewonime: In our continued quest to create value opportunities which guarantee food for our people, a roof over their heads and general improved living conditions, we focus on what holds greater advantages for us and our economy. Groot Steel is poised to employ over 800 construction workers, to start construction work on our Groot Steel 750 thousand Metric Tons Per Annum (750kMTPA) Minimill. Groot steel will produce semi-finished products like metal bars and rods which have a variety of Industrial uses including construction, automobile manufacturing, and in the production of appliances and other consumer products. Finished steel products produced from Groot’s mini mill will include rebar, wire rod, structural shapes, steel plate and steel sheets. This project holds the capacity for creating more than 2,600 direct, better paying jobs upon its commissioning. Groot Steel Minimill is sited in Omutwewonime (to become known as Onime Village).

Groot Silica in Ongwediva area: Groot Silica Sand factory is being set up for the sole purpose of producing large commercial quantities of silica sand for use in the glass, oil and gas industry and a wide range of industrial applications. Groot Silica is poised to become one of the world’s largest suppliers of silica sand with an annual production capacity of 1.5 million tons for the exclusive purpose of supplying silica sand to the Tses Glass factories and for export of the surplus production output to the world’s markets.

Presently, 950 permanent workers are undergoing the Mandatory Strategic Orientation (MSO) as a part of the 1, 500 permanent employees at the commissioning. In line with our tradition, we provide excellent working conditions for all our workers at Groot Silica with attractive minimum wage of N$35.00 per hour, full medical aid and lucrative fringe benefits which include transport and housing allowance. For more than 15 years from inception, Groot Silica contracted to supply Tses Glass with High quality Silica Sand as raw material for the manufacturing of Glass, Ceramic tiles, etc. This singular order is worth well over N$2.6 billion. There is a huge growing market and demand for Silica sand which puts Groot Silica in the center of the Economic Highway for lucrative profits.

Groot Chemicals in Odibo: At the end of January 2016, the recruitment of our 3,000 general construction workers for the construction of the Groot Chemicals factory to manufacture Urea, Ammonia, and NPK fertilizers in Odibo will commence. When completed, the Groot Chemicals factory would deliver high quality fertilizers to Namibia farmers and the SADC region. This is aimed at helping Namibia to boost agricultural production output and to enhance food security for the country. Groot Chemicals will create about 11,000 full-time manufacturing jobs to manufacture Urea, Ammonia, and NPK fertilizers in Odibo.

Groot Foods in Oikokola: Also tied to the of end of January 2016 timeline, at Oikokola, the Foods and Beverages division of Groot Systems – project owners of Groot Foods will recruit 1,500 general construction workers for the construction of the Groot Foods factory in Oikokola in Omusati Region. When commissioned, the Factory will develop, produce, package, and distribute different agricultural produce to the teeming consumers. The production and packaging of chilled and frozen food products will add value to the retail and wholesale market in Namibia, throughout Africa and beyond. The full operation of Groot Foods will generally ensure food security in Namibia and eradicate the negative trend of food insecurity and high cost of food stuff which is occasioned by continued importation of food supplies. When completed, Groot Foods factory will employ about 3,000 full-time production workers directly in Oikokola.

Groot Solar: The full deployment of Groot Silica and Tses Glass will usher in the needed time for the setting up of Groot Solar – a mega infrastructure designed to produce High Quality Solar Panels, solar Chargers, controllers, Solar Power systems for full deployment of clean, safe and renewable energy sources for local and export market. This will effectively and efficiently address the power challenges in Africa and boost small and medium scale power-driven businesses – from local hair dressers, barber shops, restaurants etc to medium size enterprises. Easy access to safe and renewable energy for domestic and industrial uses will definitely improve the quality of life. Groot solar will effectively create 3,000 direct, better paying jobs.

Grootrain: Grootrain makes its grand entry as Groot’s signature project – the flagship of all of Groot’s Industrial Developments and Grand premier deployment of the Transport Division of Groot Systems. Grootrain is a High Speed Passenger Rail Transport Service that is being developed to inter-connect Sub-Sahara and North East Africa and further link up South Africa through in-between connected Nations of South West, Central and Eastern Economic Blocs. Grootrain is coming as the long awaited realistic solution to the nagging question of efficient transportation in Africa.

While Grootrain poised to offer the convenience of easy access to fast, safe, efficient and affordable transport, Grootrain not only encourages freedom of movement for business, education and pleasure, but we also contribute a significant quota towards improved lifestyle, family stability, healthier living by drastically reducing unemployment through the creation of well over 50,000 direct and better paying jobs by 2020 in Namibia alone and more than 5 million direct jobs and not less than 20 million indirect fully functional jobs at full deployment all over Africa.

Groot Systems observes a zero discrimination policy in all our employment exercises.

Westerville: Our latest addition to Groot’s Strategic approach in Advanced Industrial Ecosystem and Rapid Economic development came by our latest acquisition of a private farm land near Windhoek for the creation of a modern upscale town designed for over 3,500 residential homes and light industries just 20km West of Windhoek.

Westerville Residential: Residential options at Westerville will cater for all life stages from young professionals to families and retirees:

• Approximately 2000 resort style apartments including 500 townhouses and 500 City Centre style apartments ranging from bachelor, one bedroom, two bedroom and penthouses.
• 1000 cluster homes
• 1000 freehold houses situated on 800m² to 1400m² stands and 120 retirement village units
• Upon full development, Westerville’s show village will comprise of 200 Resort-Style-Living apartments, 10 cluster homes and 10 freehold show houses.

Westerville City Center:
• Westerville’s City Business Center will include 5000m2 of retail space including convenience shops.
• A residential component consisting of approximately 500 apartments featuring eleven different configurations of one to three bedroom units and penthouses.
• A super basement housing more than 1 000 parking bays will be hidden beneath the city center.
• The City Center will center on a large park/piazza with other green areas located next to each apartment complex.

By lowest figures, the draft summary of our current realistic direct job creation/employment scale by 2020 shows:

Tses Glass – 7,000
Groot Steel – 2,500
Groot Silica – 1,600
Groot Solar – 3,000
Groot Foods – 1,500
Groot Chemicals – 11,000
Grootrain – above 50,000

A total of almost 80,000 direct better paying jobs and well over 200,000 indirect jobs created just for a start!

Your Excellency, the current global economic realities show a downward trend in industrial growth and full-scale sustainability worldwide with poor Nations taking the worst hit. Companies are fast downsizing with the resultant effect of more and more breadwinners of families being thrown back on the job market with a bleak future for a stable means of livelihood. However, in the middle of all of these, Groot Systems amazingly enjoys a level of Grace upon her efforts so that we are thriving impressively in spite of the present challenges.

Therefore, the earlier your administration takes this advantage and openly accepts our hand of partnership for the good of Namibia, the better and easier will it be for us to speedily implement our marshalled out plans towards our country’s development and faster actualization of Groot’s vision which resonates with your administration’s agenda of poverty eradication by 2020.

The easiest way forward: The doors of Economic Development and sustainable growth swing on the hinges of Public Private Partnership (PPP) where the government plays its role of ensuring open door policies and a friendly regulatory framework that encourages easy access to Government’s support and official Governmental backing for ease of Economic development and timely implementation of initiatives that help Government’s developmental Agenda.

Thus, such healthy collaborations not only lighten the burden of the Government in the cause of execution of its planned goals but also ensures the timely delivery on the promises tagged on it’s democratic mandate. An old African proverb says “to go fast, you go alone but to go far, we go together.”

Your Excellency, the band of African leaders from time has been the wrong choice of going all alone. Unfortunately, no one of them ever goes far in terms of accomplishments, delivery on their promises to the people and the democratic mandate of improved living conditions. Other than the length of years that they cling to the seat of power, there is hardly any outstanding deed that triggers a remembrance of their Administrations among their people.

Cde. President, every truly selfless, fore-sighted and visionary leader who takes a people-oriented posture and is both passionate for good governance and who decisively embraces the consciousness of the people’s collective mandate, would doubtless accept the hand of friendship and partnership of any notable personality or group in the private sector, who has proven his/it’s worth as a truly dependable ally in the pursuit of Democratic dividends with no further delays.

On the contrary, it proves an unhealthy situation and a resultant negative impact on Government’s laudable programs, obscuration of her good intentions/efforts and diminution of their tangible impact eventually on the citizenry, when the willing private sector is denied the needed support from government to deliver on these collective interests.

The challenges of attracting foreign participation in developmental concepts in Africa are numerous. These range from internal conflicts, security issues lack of transparency and accountability etc, but the biggest challenge is always that of distrust. However, some enterprising industrialists and visionary players are always ready to take on the investment opportunities in Africa where this distrust is removed. Where interest of Governments in such developmental efforts is evident, the confidence of investors and partners is restored and development and investments are encouraged.

Your Excellency, this is where you come in directly. We can cut back drastically on the timelines when you show proof that you are behind our developmental plans for Namibia.

Your Excellency, remember that we have done our best to keep you informed officially from our offices, of the progress made on the projects we are doing in the country. We submitted documents to your office in August 2015 as our foreign technical partners needed the assurance that the Government of Namibia is in support of our developmental plans. This, assurance is the only guarantee they can bank on that Government policies will not broker the loss of their investments in Namibia, but we are yet to hear from you His Excellency.

Cde. President, we have given a good account of our selves over these years. We have proven our good intentions for the development of Namibia and the future of generations ahead of us. We are not asking the Government of Namibia to give us money to do what we have planned to do; we will raise the money we need ourselves. We know what to do, but our partners who have the needed technology and know-how for the change we want to bring to Namibia – they need this assurance that their efforts will not be wasted or terminated half-way by Government policies.

His Excellency, all we need for you to do is simply give us your official blessing, so that we can cut back on the timelines, then all our foreign partners and others will gladly and readily come in without doubts or trembling hearts.

Our goals are not against your goals, rather they support 100% your desire to end poverty in Namibia so, why would it be difficult for you to publicly say “Yes, what Groot is doing is good for Namibia”? This is all we need, this is the only assurance that our partners want to have – no additional costs. Help us to help you realize your vision to eradicate poverty in Namibia by 2020.

The people of Namibia need good paying jobs that we know how to create and we have proven this by what we are doing so far. Take our hand of partnership and together, we can birth the Namibia that our visionary fathers saw years ago.

Cde. President, give posterity the chance to remember that it was during the vibrant Administrative leadership of His Excellency President Dr. Hage Geingob that Namibia came out of the economic woods. Let the future generations read from recorded accounts that Namibia also joined the class of the First World when President Geingob was in Power. Give the children of the next generations the surprise of reading and knowing that a President Hage Geingob caused the Nation of Namibia the loss of memory of her pains and blinded Namibia from seeing the scars inflicted by the oppressive regime of poverty she endured.

Your official blessing – this, Your Excellency, is all we ask of you. This is for our people, this is for our future. This is for Namibia.

This is what will happen with your official blessing – an open endorsement of what we are doing – POSITIVE: It will build confidence in our partners and many interested Foreign Investors to come in to Namibia to boost her Economic Development.

Industrial Boom – Several industries will run at the same time, create multiple jobs, shorten your goal of eradicating poverty by 2020 timeline. It will be easy for us to bring in developers and investors in Namibia’s untapped resources.

Here is what will happen when you refuse our hand of partnership – the disadvantages – NEGATIVE: At Groot, we will do what we are doing to help develop Namibia and we will succeed, but it will take longer. The Namibian people will wait longer without jobs, under yoke of unemployment, burden of poverty and more children failing out of school.

Foreign Investors will continue to shy away from coming in from lack of confidence due to fear of uncertainties. Vision 2030 and your goal of 2020 may not happen timely. Namibians will wait longer for needed basics/social amenities, quality education, health care services etc, etc.

His Excellency, this is sincerely thanking you in advance for your kind consideration and prompt action on these ultimate necessities.

Accept my kindest Regards,

Simon Kapenda, Founder and CEO
Groot Management Systems (Pty) Ltd
Windhoek, Namibia

Mobile: +264-81-250-9027
Email: simon@grootgroup.com
Web: grootgroup.com
Facebook: facebook.com/grootsystems
Twitter: twitter.com/grootsystems
Instagram: instagram.com/grootsystems

Groot Systems is a global leading infrastructure company focusing on developing self-sustained advanced industrial ecosystems for the slow growing economies.

A Rare Lucrative Investment Opportunity in Clean Energy for Tses Glass

We are preparing our Solar Power Purchase Agreement (SPPA) to be signed for a 25-year period between Tses Glass (Pty) Ltd, Tses Village Council, and Tses Solar (Pty) Ltd.

Tses Solar is an off-grid 60MWac Solar (PV) Power Plant being developed to supply clean and sufficient electricity to Tses Glass and the Municipality of Tses. Namibia-based HopSol Africa (Pty) Ltd, part of the Switzerland-based HopSol AG is our appointed turnkey technical engineer for the development, engineering and commissioning of the Tses Solar (PV) Power Plant in Tses.

For your info; a Solar Power Purchase Agreement (SPPA) is a financial arrangement in which a third-party developer (Tses Solar) owns, operates, and maintains the photovoltaic (PV) system, and a host customer (Tses Glass and Tses Village Council) agrees to site the system on its roof or elsewhere on its property and purchases the system’s electric output from the solar services provider for a predetermined period.

This financial arrangement allows the host customer to receive stable, and sometimes lower cost electricity, while the solar services provider or another party acquires valuable financial benefits such as tax credits and income generated from the sale of electricity to the host customer.

Tses Solar (Pty) Ltd is a joint-venture between a Namibian-based and owned Omoni Investment CC and Groot Management Systems (Pty) Ltd each with 40% percent. The other 10% is owned by a group of minority Namibians, while 10% is reserved for future investment.

It will cost about US$150 million (N$1.6 billion) for the development and construction of the 60MWac Tses Solar (PV) Power Plant in Tses starting around early 2016.

So our 60MWac Tses solar power plant project, 40MW of this is for the Tses Glass factories and 20MW is for the Tses Municipality. This will become the biggest off-grid connected solar power plant in Namibia and this 20MWac will produce about 54 million kWh per day and thus it will supply about 10,000 residential houses in Tses with clean, stable and environmentally-friendly electricity.

Our SPPA is fixed at N$1.96 per 1kWh for 25 years adjusted on inflation.

20MW per day equals to 54 million per day. Hence Tses Solar will be profitable for self-sustained. If we sell 1 kWh for N$1.96 (US$0.20), then 20MWac will generate about N$105.8 million (US$10.6 million) per day. This is what we will generate by selling that 20MWac to Tses Municipality. And 40MW per day equals to 108 million kWh per day for the Tses Glass factories. And at N$1.96 (US$0.20) to Tses Glass for 108 million kWh per day equals to N$211.7 million (US$21.2 million) per day; for a total of about N$317.5 million (US$31.8 million) per day or about N$1.2 billion (US$120 million) per year for a fixed guaranteed period of 25 years as per the SPPA.

This is good and less risky for an investment to take up the remaining 10% stake in Tses Solar (Pty) Ltd.

Email: simon@grootgroup.com

Connecting to Move Africa Fastest, Creating Over 25 Million Permanent Jobs, Serving Over One Billion Paying Customers Each Month

We’re happy to appoint a Canadian engineering company to conduct a bankable feasibility study for our next massive infrastructure project, Grootrain, a high speed passanger rail system to connect Sub-Sahara Africa, from South Africa to South Nigeria via in-between countries such as Botswana, Namibia, Angola, Zambia, DRC, to Kenya, and back to South Africa via Tanzania, Malawi, Zimbabwe, Mozambique, Swaziland, Lesotho. Grootrain is poised to make travel between cities and countries in Sub-Sahara Africa fastest, safe, and affordable.

According to a quick preliminary feasibility study by a US based independent accounting firm, Grootrain will create a total of more than 25 million permanent jobs in Sub-Sahara Africa and serve more than 1 billion paying customers each month.

Estimated to cost over US$100 billion, this is the largest infrastructure project in Africa.

Grootrain is a project by Groot Railways (Pty) Ltd, part of Groot Management Systems (Pty) Ltd.

Namibia, Why Buy Local, When Local is Overpriced?

So Namibia is experiencing a downtown economic activities in the dairy industry? I seriously believe that Namibian producers and marketers don’t know how to properly price their locally produce. I don’t even know if the local producers know how to calculate their gross margins per unit basis. Because, with everything locally produced, it’s always overpriced.

Let’s look at an example, the US auto markets which face extreme stiff competition from foreign automakers, Germany, Japan, etc., but the US auto market is able to effectively compete against these foreign automakers. They do so by being innovative, efficient and most importantly, they use better accounting methods, LIFO mostly, in their production, pricing and chain-supply management. Hence this excuse of encouraging the local Namibian consumers to buy local even though the local products are most of the time overpriced just to save the locally produced, is not a good excuse.

Let the market’s invisible hand regulate and dictate the market price and production outputs based on the demand and supply capacity. The local producers need to become more lean, more efficient and most importantly, focus on good accounting methods and the law of diminishing returns. I’m honestly glad that the international market is giving the local Namibian producers this much needed competition.

Overall, it’s the well organized, managed and innovativeness who will survive during this downturn economy for the dairy produce. And in the end, the local consumers also benefit in terms of the market price versus their income level. Because now in Namibia, the market or prices of consumer goods exceed the average pay rate for the majority of Namibians.

Africa has been politically ruled since the beginning of time, it has never been market-driven. But where is Africa still stands in today’s global economy? Firstly I’m not a politician and until when I was in Nanso during my school days, I’m not interested in politics. But I studied politics, the history of Africa and the world’s economy as part of my economic degree’s education, so my interest is in economics as I am an economist. Secondly, I’ve been an entrepreneur since 1995, so I know a thing or two about these areas. And as long as Africa is not market driven but by politics, Africa will never develop economically to its fullest to benefit all of its people but a few.

Even this land issue in Namibia, it’s not for everyone, no matter the 200,000 plots being serviced, they will never solve the real issue but make Namibia worse, because still only the haves will afford to buy the plots and the have nots won’t get none, and also in the end, it will cause to dilapidate the housing market in Namibia and Namibia’s housing market in terms of shape and value will become like Zimbabwe, Zambia etc., and no bank will issue housing bonds. So let the market system drive the market price, but this too is not good enough if Namibia doesn’t focus on creating better paying jobs.

If we focus on better paying job creation, then local commercial banks would be happy to issue more loans or housing bonds. Also depends on the Bank of Namibia, banks may even lower their interest rates on their housing bonds. This is because the market would have more customers looking to buy houses, cars and other tangible things, so banks would be forced to go with the market; customers would look for better rates and services. And if banks won’t compete to improve their offerings, then under Namfisa, there would be rooms for more financial institutions to come in the market to compete for these customers.

This is true since the market demand for houses and tangible assets would be ripe and profit will be larger, so this would call for more market entry by other financial institutions to be established and offer better rates and best customer services. In the end, you, the consumer will benefit more, as your demands will surpass the market supply. So it’s a smart thing for the government to do to pump money in job creation projects in order to help improve the market, and hence increase or improve the better living condition for nearly every Namibian.

Remember that when more people are employed and getting decent salaries, the more the government will recoup more income from tax income in order to increase social programs such as the pension schemes for the senior citizens, medical welfare and more. So let’s create better paying jobs, let’s focus on increasing vocational training to produce more qualified manpower.

Let’s develop mentorship programs to help infuse self development for many Namibians, let’s focus on hosting public seminars and workshops to help instill value and self confidence in entrepreneurs. We can do more, we can do better, to benefit all of us. And this is what is called economic inclusion.

Our Aim is Job Creation, Poverty Reduction, Strengthen Economy, Better Living

“Ask not what your country can do for you but what you can do for your country,” JFK

Likewise, as private citizens, our Tses Glass’ project timeline might have changed a little but our aim for Tses Glass remains the same and achieving our goal as originally set is our only priority.

As long as our government and honorable political leaders give us their blessing to give our technical partners and financiers a peace of mind, then we should be able to start with the construction of our two different factories; 250tpd Tses Glass container glass and 600tpd Tses Glass float glass factories this year.

We are honored to have the continued full support of our German, Italian, Ukrainian, Chinese and South African engineers and suppliers. We only now need the blessing of our government and we are working to compile all the documents as requested by our political leaders for us to be compliant.

Obviously, the permanent and long-term effects which Tses Glass is expected to cause are; creation of thousands of better paying jobs in Tses and Namibia, help industrialize our country, help contribute to the economic development of Tses, the //Karas Region and Namibia at large, help boost our country’s GDP by over N$100 billion, and effect a better living standard for many Namibians.

Most of those who already have, whose minority population still controls the Namibian economy who now feel threatened by Tses Glass as it empowers more previously and still disenfranchised Namibians and those who don’t have their hands in Tses Glass are usually the ones who write negative about Tses Glass or cause to delay processing of certain documents for Tses Glass.

When more Namibians have better paying jobs, they would have more money to afford buying a land and build a better home, have better food, and more; a better life reduces chronicle illnesses and diseases, deaths and help boost the birth rate to increase the population and improve the education system, basically to create and effect a healthy population.

These are our aim at Groot Systems to develop and put Tses Glass in operation. We can’t do it alone, we need your support, after all this is for all of us, our country.

Namibian Housing Market to Collapse

Within the next two years, Namibia would likely experience low investment in housing market that no investor would want to continue investing in real estate. Currently, real estate investment in Namibia is the safest due to its high return on investment (ROI), due the current high price of housing. Namibia is currently ranked as one of the most expensive in residential real estate properties. But after these 200,000 plots have been serviced, as announced this week by the government and the AR movement, it would cause prices in housing to drop extremely to their lowest, further causing investors to pull their money away from real estate properties investment as well as making banks not willing to issue mortgage loans. And this would cause severe dilapidation in residential properties value.

Large cities and towns will be hit the hardest, especially due to the high migration of people from large cities and towns to rural areas such as Tses with high economic development where more jobs are slated to be, causing large cities and towns to have ghost houses.

The ideal solution would be that the housing price should be market driven. By this I mean, let’s focus on job creation and not just jobs but good paying jobs, so that more Namibians can have high income to afford decent houses. When the demand for housing increases due to adequate income, then the price of houses would drop steadily as driven by market in proportion with the high demand in houses but supported and sustained by adequate income. The supplying of houses will increase as investors would have confidence in the housing market hence they would continue investing in real estate as the demand of houses skyrockets at an acceptable price due to many people with high income to afford to buy decent homes.

Now with these 200,000 new houses/plots thrown into the market which exceed the demand and below the income level, it is like having Bank of Namibia to print more money which basically devalues the currency.

I hope that when our esteemed political leaders and land activists make and take actions such as this to flood the market with more houses than the demand, I hope that they first do research in order to have quantitative data to enable them make well informed decisions.