RESEARCHERS have warned that government needs to be vigilant on what the conditions are set out when doing business with People’s Republic of China, as currently there is no strategic framework or government policy, which regulate the terms, and conditions on which Chinese businesses orchestrate dealings with Namibia, raising fears of infringement locally.
This was revealed at the launch of a briefing paper held by the Institute of Public Policy Research (IPPR).
The paper titled, “Risks and Rewards: Marking sense of Namibia-China Relations” discussed the economic as well as political relations between the two respective countries and is authored by Dietrich Remmert and Rakkel-Andreas from the IPPR.
In his presentation, Remmert stated that China has become a major creditor to developing nations; with an estimated U$380 billion debt is held by China in Africa.
He added that in in September 2018 that the total outstanding debt to China in Namibia a amounted to around N$2 billion and accounted for 2.6% of total national debt.
“Thus far the research indicates that Namibia has exercised some caution regarding building up debt owed to China. However, given the context of Namibia’s rising public debt and the dangers it poses for the future, it will be important to carefully monitor bilateral debt owed to China.” Remmert said.
Touching on Chinese influence on the construction section, Remmert indicated that there is only limited public information and quantifiable data available on Chinese involvement in the country’s construction industry.
The research was however able to source a comprehensive and detailed list of public construction contracts giving crucial insight on Chinese businesses’ involvement in this sector.
The data set does not cover every public infrastructure project but includes those allocated under 18 ministries and the Office of the President (OP).
Among the ministries covered are those that are usually allocated the largest share of the national budget including the Ministries of Education, Arts and Culture, Finance, Defence, Health and Social Services, Defence and Safety and Security.
The evaluation of the information focused on infrastructure projects for which sufficient information was provided including contractors, total costs of project and completion status. Crucially the researchers decided to exclude all projects that were in the planning, tendering or feasibility stages and concentrate only on projects that were under construction or completed.
Remmert reported that of the 18 ministries and OP, a total of 251 public construction projects were iniatiated between around 2010 and 2018, with the bulk of awards seemingly taking place from 2011 to 2015; thus prior to Namibia’s economic recession and the new procurement law of 2015 becoming operational.
Remmert stated that of the 251 construction projects only 21 or fewer than 8.4% were awarded to Chinese firms; just over half of the contracts were awarded to joint venture between a Namibian and Chinese company.
He added that while Chinese contractors captured only a small percentage of the total public construction awards, they did garner mostly large-scale projects – considerably raising the monetary value of contracts held by Chinese firms.
The contracted value of the 251 construction projects stood at around N$6.8 billion of which companies from the China held just under N$2.6 billion or 37.6 % of the total.
“Given that the data indicates that over a third of the value of all analysed public construction projects in Namibia involves Chinese construction contractors, it can be ascertained that companies from the PRC have taken a considerable chunk of the country’s public construction sector over the past decade or so.” Remmert said.