The small and micro enterprise (SME) sector in Namibia: conditions of employment and income

The small and micro enterprise (SME) sector in Namibia: conditions of employment and income

How are SMEs in Namibia performing?

The SME sector has increasingly become a booming area of the Namibian economy. Indeed, it is estimated to provide around 60 000 full-time jobs at present, which makes it a very significant sector in terms of employment creation. Its potential for employment creation seems even larger than that of Namibia's large business sector due to its labour-intensive nature and its use of local resources.

The aim of the present study is to achieve the following:

  • a definition of employment - the different levels of employment (including self- employment) are defined in relation to the specific environment of small business sector in Namibia
  • an analysis of the job quality (in terms of security, social security, income parity, ability to learn, access to other sectors) with measurable indicators
  • an analysis of income levels in terms of salary and income (including 'informal' income, double income etc.)

The main findings of this report are as follows:

  • provided that the SME sector receives adequate support and/or protection, its impact on unemployment could be more significant than that derived from foreign investment in Namibia
  • few SME workers had other sources of income and most had to rely on their salary as the sole means of survival
  • despite the relatively low salaries and the absence of fringe benefits, most SME workers were satisfied or 'highly satisfied' with their current job
  • almost half of the SME workers indicated that low salaries and the lack of benefits were the main problems they experienced with their current jobs
  • only about 10% of SME workers were unionised but the majority of respondents clearly stated their openness to trade union recruitment
  • most SME workers were not opposed to or disinterested in trade unions but merely lacked information about and contact with trade unions
  • unionisation rates were higher among women than men

In conclusion, the key challenges regarding employment issues in the SME sector are the improvement in salaries and benefits as well as adherence to minimum conditions as set out in the Labour Act and the Social Security Act. This requires targeted initiatives by government ministries, trade unions and SME service providers. Such initiatives should target SME owners and SME workers alike as the favourable worker-owner relationship in the sector forms an enabling environment for negotiated solutions.

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