Where are the Black-owned Engineering Firms for Industrial Ecosystems Development in Namibia?

We’re just coming from our intense technical planning for both @Groot Steel and @Tses Glass, with our Local Project Management team, and I feel really sad; I’m so sad that, as we put in so many hours developing these projects each day, hoping that in the end, we’re helping to economically empower those who have been left out by the wave of lucrative opportunities in Namibia, it’s very sad that in our technical team of engineers, many local partner companies involved, that there’s no single black-owned or operated firm offering technical expertise for these projects, and only white-owned. And this is so sad. It’s just too sad, that money paying for these technical services is flowing from one already-wealthy hand to more other already wealthy hands.

It’s sad that it seems like more black people in Namibia or rather Africa at large, tend to rather more focus on short term goals instead of investing their time and energy in long term visions, such as; projects like these are all for long terms; ranging from 2 to 5 years of just technical planning prior to getting any capital return from them, but black people don’t seem to be interested in that, they seem to be more interested only in such as shebeen business, where you plan and build it today, and tomorrow you’re getting your small change back.

But if it’s like this, then how can an economy can actually develop and prosper? Setting up and building cuca-shops, kapanas, mini-markets, retail stores, lodges, guesthouses, shebeens, shopping malls, etc are not the way to develop an economy. All of these are services which offer no real value; no value-added, no nothing except that you set them up fast just to close them down even fastest if things don’t go as expected possibly due to the severe competition (crowded market), and that these types of service businesses don’t offer sustainable good paying jobs, to the point that the workers themselves who work in these places can actually afford to buy from these services where they themselves work.

Manufacturing jobs offer the best economic value for the workers to support their families, communities, and the country. Setting up manufacturing factories such as steel mills, glass factories, power plants, and other infrastructure projects generally serve as the backbones of economies in the world, everywhere.

Setting up barbershops and street corner shebeens etc offer nothing, not even in the short term, but add more misery (governments must offer more social welfare programs) and poverty to the economy (poorly paid people don’t pay adequate tax to support offered governments’ social welfare programs).

I feel sad that, in a country like Namibia which is in Africa, that only more white companies are involved in offering technical expertise and planning which involves millions of dollars for their services.

Oh, my people, my Africans, when can we move away from the short-sighted goals and look at the furthest years to come; such as planning for the next 25-50 years from now? How can we really make Africa become economically successful, and make it no more politically focused and oriented? A politically focused and oriented Africa will keep seeing more people living in dire poverty, more families living in misery, more people dying, more governments looking for international donors’ bailout, more people living not according to their dreams and wishes but because of rather purposely designed social circumstances.

It’s just sad, too sad.

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!

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.

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.

Africa’s Rapid Industrialization Begins in Namibia by Groot Group

The first time of doing something, anything anywhere, is always the hardest; but once you do it a few times, either successfully well or not, it gets easier with time, every time.

As Chief Economist, and now CEO of Groot Group, as well as Project Director for most of our industrial projects, I’ve learned a lot by dealing with certain things, either socially or politically, in Namibia in terms of developing Groot, Otavi Steel, and Sitentu Power Plant; but with our recently unveiled Tses Glass Manufacturing Plant, this is now happening fastest and easiest than any other.

Our achieved success from doing the Sitentu Power Plant and then the Otavi Steel Mill has made it easier for doing all of our other projects; and in addition, many of the world’s largest and leading companies from around the world have lined up and continue to line for our projects.

It’s now easier for us to plan and execute any industrial project and within less than 48 hours, we have a complete team in place, ready to take on the project; companies from the USA, South Africa, Europe and Asia, such as a team from South Africa’s largest, The Dickson Group and Germany’s largest Horn Glass Industries, will arrive in Namibia in coming days. A team from the US and another team from Cognex in France will also arrive in Namibia in early August for Tses Glass. More companies based in Germany, Northern Ireland, Russia, Italy, Israel, India, etc., are scheduling to come to Namibia for our Tses Glass Manufacturing Plant.

This fast approach for the development of Tses Glass is making it ready for the construction to begin next year in May, nearly at the same time as Otavi Steel, which starts in April next year.

We understand that Europe is currently in dire financial crisis, so as the US economy is also in the stagnant mode, and the US and European companies are shifting their profit yearning to the market where they deem lucrative, and Namibia, because of our Group’s initiatives, is at the forefront for them. In return, Namibia as a country and the Namibian people will enormously and exponentially benefit from these industrial projects’ development.

Just by combining the Otavi Steel Mill and Tses Glass Plant’s indirect employment creation opportunities in Namibia, about 260,000 permanent indirect jobs, just from these two projects, will be created in Namibia alone. But how did we get this number? Otavi Steel’s direct employment is about 23,500 and for Tses Glass is about 27,900. By adding those numbers together and multiply them by a factor of 5 (based on the fact that each 1 direct employment created generates about 5 indirect job opportunities), then you get 257,000 indirect job opportunities created just from two industrial projects in Namibia. And that will help reduce Namibia’s current unemployment rate of about 54% to about 21% within just the first few years of commissioning these two industrial projects.

For Namibia to realize Vision 2030 on time, and this is a fact that a “big rock” must be thrust into the Namibian economy by no later than 2018. And this “big rock” must be so huge that it will create long-lasting ripple effects to exponentially boost Namibia’s aggregate economy in full fast growth speed, but without jolting an inflationary pressure. And these two industrial projects; Tses Glass and Otavi Steel, as complemented by Sitentu Power Plant are part of this “big rock”.

On a macroeconomic impact level, just nearly as it’s expected in Otavi, so as it will happen in Tses. Currently, Tses is a small village with a small sparsely population of about 2500. However, as Tses Glass will require more than 27,900 direct workers, more and more Namibians are expected to flock to Tses in search of better paying jobs. As a results, Tses will need no less than 20,000 new homes. Taking at least 4 persons per each household, that will boost the Tses population to more than 80,000 within 4 years. And for this reason, Tses needs to develop at least 5 new suburbs with each suburb to be composed of at least 5,000 new homes. As these new suburbs are developed, there will be a need for clinics, retail stores, gas services (right now there’s only one small gas service which operates at certain hours of each day), barber shops, hospitals, colleges, schools, etc., in order to serve the expected fast rising residents of Tses.

Currently, Namibia’s population is mostly centralized; mostly in a few major cities and towns such as Windhoek, Walvisbay, Oshakati, and Swakopmund. The municipalities of these towns can barely keep up with the providing of basic services such as water, electricity and sewage to their residents. More and more shanty towns in these cities and towns around Namibia are mushrooming up exponentially as more Namibians are moving from the rural to urban centers in search of work.

And, as these towns, Otavi, Tses, etc., boost the demand for employment opportunities caused by our industrial projects, then some people in other areas as stated above are poised to migrate to these areas of Tses and Otavi in search of work. Hence the fastest and efficient cause of a population decentralization in Namibia in a relative short period of time.

Well, this is obvious that, as more Namibians get better and find better paying jobs, more will no longer be housed in shack houses with cold and heat temperature. Certainly, the cold and heat weather are some of the major contributing factors to many of today’s chronicle diseases that affect most of the Namibian people. But, as more and more people have better paying jobs, they will have access to better housing with good water, electricity and sewage; hence the reduction in unnecessary sickness, which currently impose high-rise in healthcare costs to the government. Then Namibia is poised to experience a lower death rate, but more healthy births; hence a fast but healthy growing population.

For Swaziland, we are currently to develop a 1200 MW Coal Power Plant in Swaziland, and for Zimbabwe, we have an industrial project idea that, if developed, could turn around the Zimbabwean economy and make it a first world country (developed economy) within just 8 years. Hence the Zimbabwean government needs to contact us quickly for the implementation of this awesome project that will exponentially boost its economy and help create long-lasting socioeconomic benefits for the Zimbabwean people.

Zimbabwe, please contact me now at my email at simon@grootgroup.com. Let’s get to work and make the Zimbabwean economy more beautiful.

Feel free to download and view our Groot Group Corporate Brochure with detailed approach to our Industrial Ecosystem Model.

Are There Any Smart People Left in Africa?

More and more US entrepreneurs are launching companies for mining in space. Apart from the much recently publicized, Planetary Resources Inc., which aims to mine an Asteroid circling near the Sun, Moon Express Inc., is another one of many US companies that seek to mine certain rare minerals on the Moon and it expects to land on the moon by 2013.

Here is the case; some of the serial entrepreneurs in developed countries have almost exploited and exhausted most, if not all, the ideas to turn them into profitable companies, and now are starting to focus on space mining and exploration.

But what are the entrepreneurs in Africa doing? Sleeping, drinking themselves to death, or just loathing around?

Africa countries have some of the most educated people, just like in other developed countries. But some of the factors that may brain drain Africa is that most of these foreign educated Africans never return to their home countries in Africa, they end up staying where they have studied and work for the companies in those countries.

But a few who return to their home countries in Africa, they walk around; bragging and boasting around because of their papers (degrees) and academic achievements, then they get jobs in governments and simply become useless. Because in their job posts, they are not expected to meet any certain quotas or milestones, and mostly after work every day, they go out to drink themselves out. Then the next day they go to work, with a much hangover, and that makes them even more less productive. But at the end of each month, they receive their generous paychecks whether they have done any work or not.

All in all, they rarely do anything impactful to come up with real innovations that could help transform their economies and raise up their communities’ standard of living.

If I am wrong, please tell me even just 5 innovations that were developed in Africa.

Nearly everything that we use today in our homes and at work, from automobiles, planes, electricity, etc., were invented in countries outside Africa; mostly in the US.

My question is this; are there any smart people living in Africa? Are there any entrepreneurs in Africa?

There’s a silly and perhaps racial saying; all the smart people who were born in Africa have left Africa, and only the dumb ones are still living in Africa. Is this true?

So what is really the issue that hinters a rapid economic development and growth in Africa?

Is it perhaps because more Africans become politicians or politicians wannabee instead of engineers, scientists, and entrepreneurs (not shebeen owners) who develop real innovations that solve some of today’s intricate problems?