Namibians in both rural and urban areas continue to face great difficulties when accessing capital for developing tourism products.
This has the greatest negative impact on lower income and rural Namibians.
The Ministry of Environment and Tourism has identified the absence of the willingness by current funding and financial agencies to change their policies and facilitate entry of emerging tourism entrepreneurs.
This scenario led to the ministry proposing that a funding agency similar to the Agricultural Bank (AgriBank) be established and a National Tourism Development Bank unlock the geographic spread of benefits of tourism in rural Namibia to facilitate the full realization of the multiplier effect of tourism in rural Namibia and communal conservancies across the land.
This strategic intervention forms part of the ministry’s National Sustainable Tourism Growth and Development Strategy 2016-2026.
According to the tourism growth and development strategy report, the ministry aims to facilitate the concept of development and advocate the establishment of the Tourism Development and Transformation Bank as well as the National Tourism Guarantee Fund in consultation with all relevant stakeholders.
The report clearly highlights that it continues to be a complex and difficult process for most Namibians to enter the tourism sector due to issues of access to finance, land tenure concerns, communication challenges, cultural and traditional concerns, infrastructural development and human resources capacity.
“This has the greatest negative impact on lower income and rural Namibians. This is clearly illustrated as only 4 percent of the total beds available for tourists are channeled to areas where most Namibians live and where jobs, employment, revenue generation and the multiplier effect of tourism is much needed,” the report states.
Further, it reveals Namibian banks, including the SME Bank and Development Bank of Namibia, all have policies that are not friendly towards investment in the tourism sector in rural areas.
The report said that such banking institutions maintain that land is not serviced and is not proclaimed. They also demand collateral, which many Namibians are not able to raise, and interest rates may also be too high.
Another reason is that these existing banks have complex and cumbersome procedures that many Namibians may not be able to navigate.
“The financing framework of financial institutions in the country do not consider the economic reality of the majority of Namibians, and therefore perpetuate a system of inequality in the tourism sector. There is a need to lower the barrier to entry into the tourism sector,” the report suggests.
This, the report maintains, can be done by including access to finance intervention in the empowerment agenda in order to facilitate the flow of much needed capital at terms to new players and emerging entrepreneurs.
Moreover, the proposed bank must be complemented by the establishment of a National Tourism Guarantee Fund to assist communal conservancies in the quest for sustainability.
The ministry is yet to convene a meeting with relevant stakeholders to outline the framework for creating such a bank on a date to be announced in due course.
Furthermore, the ministry will work with experts to determine the services to be offered by the bank.