Stefanus Nashama
McHenry Venaani, the Leader of the official opposition and head of the Popular Democratic Movement (PDM), has expressed concern about the excessive profits earned by banks in Namibia and the broader Sub-Saharan African region, stating that it presents a challenging issue.
In his statement yesterday, Venaani emphasized that while banks are expected to generate profits to contribute to economic growth and stability, the exorbitant profits accumulated by Namibia’s banking sector exacerbate economic imbalances.
“At the heart of a thriving economy lies the importance of bank profitability, which drives economic growth and stability. However, this should not be confused with over-profitability that comes at the expense of the general population,” he remarked.
Venaani called for the adoption of responsible banking practices to ensure socio-economic equilibrium. He stressed the need for transparency in profit generation and fee structures, along with responsible lending practices to establish fair interest rates and promote financial inclusion.
Additionally, Venaani proposed bolstering regulatory oversight to prevent over-profitability and ensure that banks prioritize the best interests of their clients and society at large. He emphasized that improving regulatory oversight would enable clients to access and use banking services without being burdened by excessive financial costs.
“All of this can be achieved while maintaining healthy profit margins for these commercial banks,” he stated.
Venaani acknowledged that the excessive profitability of banks in the country restricts financial accessibility for Namibian citizens, placing them in a financial quandary.
His comments came in response to a statement by Johannes! Gawaxab, the Governor of the Bank of Namibia, who addressed the parliamentary session this week on the issue.
According to Venaani, Gawaxab’s statement suggests that commercial banks in the country can continue to generate profits despite criticism and complaints about their exorbitant fees. However, Venaani argued that this comes at the expense of countless Namibians who rely on these banking services for their livelihoods.
Contrary to the assertion that over-profitability is necessary for sustainable business operations, Venaani contended that banks in the country could still remain profitable without unduly burdening their clients.
“The trend of over-profitability by banks in the country hampers the ability of citizens to improve their economic status, perpetuating a cycle of poverty and financial exclusion,” he reiterated.
Venaani called for a balanced and equitable approach to bank profitability that safeguards Namibia’s socio-economic fabric, especially during these challenging times for the country.
