E-COMMERCE - NAMIBIA GETS READY FOR BUSINESS

20 October 2000

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No-one should underestimate the tangled knot of problems most African countries will have to untie before e-commerce becomes a reality. Milton Louw of NamBizDot.Com took part in the Namibian Consultative Mission on e-commerce. His summary of its findings provides both cautious cause for optimism and a sobering assessment of the distance that has yet to be travelled.

 

The Namibian Consultative Mission took place from 1 to 6 December 2000 and visited 21 companies and organisations. The following are some of the findings:

 

National E-Commerce Vision and Strategy Namibia is in the process of developing an Information and Communications Technology (ICT) policy that will be presented to the Ministry of Foreign Affairs, Information and Broadcasting by April 2001. An e-commerce strategy is not envisaged as a separate document, but will be included in this report prepared by a Namibian company in participation with South African consultants.

 

The biggest hurdle for the Government in the development of an e-commerce strategy is the decision on where the responsibility within government is. At present the Ministry of Broadcasting and Information is leading the way as the issue of Copyright also resides in this Ministry. The Ministry of Trade and Industry is involved, but very little discussion is taking place on the Regulatory environment needed. The Ministry of Finance is not yet involved in the process, and they will have to become involved on taxation issues.

 

The Private Sector organisations such as the Namibia Chamber of Commerce and Industry (NCCI) are not involved with this process at present, but a NCCI Standing Committee on ICT has been established in November 2000. Another initiative is the Namibia Business Information Network (NBIN) that is a supplier of business information via electronic and traditional means.

 

There are a few companies in Namibia involved in e-commerce, but this has largely been done on their own initiative. Some of these companies are in the process of consolidating their efforts. The primary problem has been the lack of international marketing as part of their efforts.

 

The regulation of E-Commerce Privacy and the protection of the consumer has been identified as areas in which legislation is lacking. No work is presently been undertaken to redress these issues for the electronic environment.

 

Most of the network systems in the private sector are stable and can be trusted to process and store information. Nationally, more awareness has to be created on the need for on-line security and encryption, as well as the protection of personal information. A balance has to be found between the protection of personal information and the needs of the national law enforcement agencies.

 

There is presently no work being done on the legal and commercial frameworks, Financial Issues or Intellectual Property Protection. (Namibia is a signatory to World Intellectual Property Organisation, WIPO, but has not enacted any new national legislation.) Online business contracts are not presently accepted by law due to the requirement of printed and signed documentation with stamp duties.It has been suggested that the regulation of e-commerce will be addressed within the context of the National ICT strategy.

 

It is important for Namibia to identify the existing e-commerce companies and the potential for growth. We need to identify potential growth areas, create appropriate legislation and allocate the necessary resources to ensure participation throughout the country.

 

EXISTING KEY PLAYERS

 

The e-commerce market will be shaped by the following factors:

 

   ISPs Mweb, iWay and Africa Online provide internet access through dial-up and leased lines. Portals are being created that copy successful examples in South Africa and Kenya. Dial-up connections make up 60% of the +/- 12,000 customers. Approximately half of the dial-up customers are home users.

   The ISP´s and Polytechnic of Namibia are providing hosting services. Speeds are still slow for international access as the connections go via South Africa.

   The impact of content providers on the take-up of e-opportunities: The daily newspapers have an online presence and reproduce the information from their printed editions. NamBizDot.Com is a recent private initiative to provide information to members of various private sector organisations, and has an electronic database of companies to assist in creating business networks.

   The need for web design expertise:Many companies have entered this area, but with very little expertise in the demands of international surfers. Most Namibian sites are too slow with heavy emphasis on graphics. There is also very little updating done to these sites.

   The need for skills taining: MyITD is a company providing on-line training mostly for Microsoft courses. Further training is made available by colleges, but no uniform system of accreditation is in place.

   The climate for Private Investment in e-Commerce: There are no specific initiatives to encourage private sector investments in the e-commerce field. However, the Export Processing Zone (EPZ) regime does allow for 0% tax rates (for unlimited time) to companies that export more than 70% of their products or services. Under this regime, two international call centres have been established. The Investment Centre within the Ministry of Trade and Industry does not presently have the capacity to specifically promote e-commerce investments.

   The market for e-commerce" There is a limited local market for products or services into the local market. The government has the technology to become an e-user as most government ministries are connected to an intranet, but this will require changes in the procurement and tendering process.

 

Namibia has to aim to become an international provider of goods and services by utilising the internet. An example is the creation of a national database of transport providers and the goods they are carrying available in real time.

 

Targeted Support for Small & Medium-sized Enterprises and Special Target Groups Groups of special importance. The Government in conjunction with donor agencies places a strong emphasis on the development of the SMME sector. Support programmes include: i) Joint Consultative Committee: This organisation brings together the Ministry of Trade and Industry, Development Corporation, Chambers of Commerce, Financial Institutions, Donor Organisations and private sector service providers to coordinate their efforts. ii) Polytechnic of Namibia The Centre for Entrepreneurial Development is being created to allow for the establishment of businesses by graduates during, and after, their studies. iii) Enterprise Namibia Foundation This UN sponsored programme is aimed at training entrepreneurs in successful characteristics according to the EMPRETEC model.

 

At present there are no specific government ICT or e-commerce initiatives targeting SME’s. The Government has however established Schoolnet and is encouraging private sector participation. Telecom Namibia has also started a subsidiary, iWay, to provide access throughout the country.

 

There are several other initiatives, such as: The Centre for Entrepreneurial Development; andThe Namibia Business Information Network is involved in the promotion of business resource centres throughout the country that include office bureau services and internet access.

 

The main barriers to entry are:

 

   The big one is access. The price of telephone calls N$ 0.17 per minute and computer access is still limited to less than 20% of the population.

   The Financial institutions have high handling charges that cannot be absorbed by an SME and will thus not allow them to accept credit card payments for goods over the Net. Discussions need to take place with the financial institutions, as not only SME’s but also larger companies are experiencing problems due to these high charges.

   More training is needed in computer literacy skills, especially within the present education system.

   To fully participate in the revolution being undergone in employment, Namibia has to take stock of its present educational systems and target specific areas to ensure we have the skills available in the future.

   A national accreditation body has just been established and they have not yet investigated the ICT industry. Varied skills and experience are available in Namibia due to the presence of large mining and financial companies.

   The Polytechnic of Namibia has more than 100 entrants annually for its three-year course,but less than 6 per year complete the course. The courses available are provided by international experts from France, Germany and Japan.

 

In service training in conjunction with formal training is a possibility but companies expressed reservations on the ability of retaining the employees. The new ISP, iWay, has trained a large number of employees but very little is known of their skills to date.

 

A steady stream of skilled labour export is already occurring. Of special importance is that many of the skilled e-commerce personnel are white, (with their strong ties to South Africa, Germany, etc.), and they are leading this exodus due to uncertainty within the region.

 

Skill gaps and the limitations on access to training programmes is leaving many graduates with little opportunity to update their skills.

 

The key Stakeholders -the University, Polytechnic and Ministry of Education - need to play a more prominent role in developing courses and career information to the school leavers. One of the problems with this is the lack of skills based learning.

 

The Private Sector also has an important part to play in providing information on the skills needed within the labour market. Namibia is facing a high unemployment rate, even though most school leavers have a college level entrance education, with a large number of jobs unfilled due to lack of skilled personnel.

 

Namibia does not have a National ICT policy in place and needs to do so urgently. Problems are being faced in creating an environment for e-commerce due to difficulties between the Min. of Trade and Industry and Min. of Information and Broadcasting regarding the copyright issues and this could hamper developments for the foreseeable future. A possibility will be to incorporate the future directions within the Ministry of Trade and Industry to allow for an overhaul of the national legislation in line with the needs of e-commerce.Private sector optimism is high with initiatives to establish Internet-based Business Directories, Company Reliability Information Services, Distance / Remote Education, and many tourism related sites.