A Development Bank of Namibia (DBN) Covid-19 Business Relief Loan has helped to preserve approximately 950 jobs by providing finance of N$53 million to pay salaries of employees of the well-known tourism and hospitality operation, The Gondwana Collection.

The 950 employees are distributed among 28 accommodation establishments and companies that make up the group.

Although a recovery of the Namibian tourism and hospitality sector was expected in 2021, this did not materialise due to the continued impact of Covid globally and especially the emergence of the Omicron Covid-19 variant, and the subsequent red listing of Namibia and other countries in Southern Africa. The sector now hopes that, on the back of very positive current and especially future bookings the sector will begin to recover in 2022.

At the height of the Delta phase of Covid-19 infections, Gondwana committed to, as far as responsibly possible, preserving its workforce and their income. Among measures the group undertook, management has taken substantial salary cuts, and other employees have also accepted salary cuts. Other measures to reduce costs included tightening of work schedules, overtime restrictions, leave schedules and operating with skeleton staff where possible.

Talking about the loan, Development Bank Executive for Marketing and Corporate Communication, Jerome Mutumba, expressed admiration for the manner in which the group and its staff operated as a collective. Cuts to income have preserved employment and income thus far, but none of this would have been possible without individual commitment to the shared interests of the group, he said.

Talking about prospects for the tourism industry, Mutumba said DBN is doing everything in its power to preserve the industry for the future. This includes a moratorium on repayments for existing Bank customers in the tourism and hospitality sector, restructuring of loans and extending the Covid-19 Business Relief Loans to new customers.

The investments that the Bank is making in the sector, through its loans, recognize the historic contribution of tourism to the Namibian economy but, more importantly, the need to preserve capacity for the future, Mutumba pointed out.

Mutumba said that DBN is an agency that assesses its loans in light of longer-term results, and that it considers the sustainability of its investments. Be it a smaller enterprise or a large enterprise, projects financed by DBN are expected to be sustainable well beyond the term of the finance.

However, he also said that the Namibian economy must be rebalanced to shed reliance on a few highly productive sectors. In this regard he said that although tourism and hospitality must be preserved, manufacturing and transport and logistics must be further developed. Not only will this make Namibia more economically self-sufficient, but it will also improve the attractiveness of Brand Namibia for foreign direct investment in future.

The Development Bank’s Covid-19 Business Relief Loan is supported by capitalization from KFW, Development Bank of Germany. Mutumba concluded by thanking KFW for their contribution to preserving the Namibian economy.