Namibia's construction sector urges gov't to pay arrears

The Construction Industries Federation of Namibia (CIF) has demanded that the government pay more than a billion Namibian dollars (about 74 million U.S. dollars) it owes its members by Dec. 15.

CIF consulting general manager Barbel Kirchner said in a statement Tuesday that close to 75 percent of businesses are currently experiencing cash flow crisis with dire consequences.

He also said the non-payment by government will not only cause delays or stoppages on projects, but that contractors will have great difficulty in meeting their contractual obligations.

More importantly, Kirchner said, more jobs are likely to be lost and already companies are downsizing and retrenching, with others staring bankruptcy in the face.

"Between Sept. 1 and Nov. 30 this year, a total of 1,008 employees were retrenched, and an additional 604 persons will lose their jobs by the end of Dec. 2016," he said.

If the government does not pay now, he also said, about 30 construction companies are likely to close by March 2017.

Although he acknowledged that the construction industry is cyclical and does not expect the same growth, Kirchner said the federation cannot allow companies to go down due to late payments.

"Payments need to be affected immediately. The uncertainty has devastating consequences for the businesses and for the people in our industry.

"We, therefore, urge government to pay all invoices older than 30 days before 15 December and before things slow down for Christmas," he said.

The government of Namibia has reduced its capital projects budget and suspended more than 50 projects this year because of lack of money. Endit