The private sector continues to be a critical driver of job creation and economic growth. However, several factors can undermine the private sector and, if left unaddressed, may impede development. Through extensive face-to-face interviews with managers and owners of firms, the World Bank Group's Enterprise Surveys benchmark the business environment based on actual experiences of firms. A series of blogs, starting today, share the findings from recently analyzed surveys conducted in several countries.
The Namibia Enterprise Surveys consisted of 580 interviews with firms across three regions and three business sectors – manufacturing, retail, and other services. So what are some key highlights from the surveys?
Exports take on average 8 days to clear through customs but varies according to firm size
In 2013, it took a firm in Namibia about eight days to clear exports through customs, which is considerably more than the two days it took in 2006. Despite this increase, the average time to clear direct exports through customs is still about the same as in the upper middle income countries (8 days) and lower than the Sub-Saharan Africa regional average (10 days). Moreover, there is a wide variation across firm size. For a small firm, it takes about 17 days on average to clear exports through customs, compared to around six days for medium-sized firms and about two days for large firms.
Clearing imports, in contrast, through customs is considerably faster in Namibia (five days) than the average for upper middle income countries (11 days) and Sub-Saharan Africa average (17 days).
Improvements in access to finance and reduction in collateral requirements
In 2013, 34% of firms in Namibia used banks to finance investments, more than three times as many as in 2006 and roughly twice the average for Sub-Saharan Africa. Furthermore, the proportion of investment capital financed by banks also increased with the average firm financing 26% of fixed asset purchases with bank financing. This is significantly higher than the corresponding figure for Namibia in 2006 (16%) and Sub-Saharan Africa (10%). Firms also face far lower collateral requirements than in the past (92% of loan amounts in 2013 vs. 219% in 2006) and lower than the average for firms in Sub-Saharan Africa (181%).
What is the biggest obstacle to firms?
Access to finance, according to business owners and top managers. Despite the improvement in the use of financial services by firms in recent years, more firms perceived access to finance as an obstacle in 2013 than in 2006, with 48% claiming it as the biggest obstacle in 2013, compared to 12% in 2006. This may indicate that the access to financial services, despite improvements, may have been insufficient. The second most frequently cited obstacle in 2013 was access to land (21% of firms), followed by corruption (10%).