Namibia faces a serious problem of re-paying the Eurobonds that will come due in October 2021. The time for outside professional, experienced professionals to address the problem has come. This cannot be done on the cheap.
We are loathed to make this admission. We have always criticized government ministries about their dependence on foreign consultants. Since independence, Namibia has spent hundreds of millions in hard currency for consultants.
Ministries have paid consultants to do their jobs for them over 30 years. Consultants contracted for a month to help write one document, were given every assignment under the sun.
Consultants paid in foreign currency sometimes earned more than the Ministers. They camped out in certain ministries for years, driving government cars and living in government housing. Civil servants enjoyed handing off their work.
Many of these consultants are unable to find work in their home countries. They have made a career of fleecing developing countries and delivering half-baked outputs.
There was little skills transfer with most of these consultants. Ministries remained as ignorant when the consultant left as they were before the consultant came.
However, COVID-19 is a game-changer. We need help with this Eurobond pay-back issue. Well-supervised consultants are needed.
This is not the time for comrades, people with mail-order PhDs or MBAs from imaginary island universities. We have no time to hire local or South African whites with no international finance experience. They are equally expert in inflating contracts for their services as the tenderpreneurs. We need professional, experienced financial gurus who understand Eurobonds and how they work. We need bricks and mortar, not papier-mâché.
Solution options must be researched, tested and then presented according to a set timeline.
We believe the global conspiracy theories about international financial institutions, transnational companies and Western political bullying. Desperate times call for desperate measures. We should contact the IMF and World Bank for experts. The United Nations, African Union and other treaty organizations to which Namibia belongs, must also be approached for candidates. We are backed in a corner and need to come out fighting.
There is no wiggle room. Those bonds will be honoured on time, one way or another. We do not now have the money to do that.
We are not experts, but there could be ugly scenarios that can occur should we default. Bondholders could move fast to ‘take’ their money in very public and ugly ways. Namibia’s financial reputation, already on life support, will flatline.
There could be huge penalties, lawsuits, super high-interest rates on new bonds and other nasty repercussions. Our people will mine diamonds, catch fish, and raise cattle to pay off Eurobond holders for generations. Let us hope our creditors permit us to have oshifima and relish at least once a day.
Other countries like Greece, were financial basket cases a few years ago. Now, with EU and top-level consultants, they have reason to hope. They had to suffer the slaughtering of all sacred cows (like civil servant salaries, union demands, huge parliaments, money for political parties and perks for high office holders). They were reviving. Of course, after the pandemic, those repairs may not hold. Still, the tearful path they took (or parts of it), could be fit for us.
Namibia needs experts like these other distressed countries had. The Eurobond clock is winding down.
We can argue all day about how our high-potential country ended up in this situation. That shouting match won’t pay the bonds. There were global international occurrences over the decades that pushed Namibia to the wall. Decisions made before independence by the whites-only, wasteful colonial government and some made over the last 30 years, put us close to that wall in the first place.
Let us send up a flare; an S.O.S, and import the skills set needed to work with us (not for us), to get Plans A, B and C (and maybe D) in place.
If we fall asleep on this key issue and wake up just before the deadline hits, Namibia might collapse.
