BANKING giant ABSA capital is skeptical about the banking sector in Namibia emerging from an economic slump caused by the global economic recession hence  prompting it to take a cautious approach towards scaling up its operations in the  country.

According to the Head Marketing, Communications and Corporate Affairs Manager for the banking giant, Gabriel Pangwa, ABSA’s decision to  launch a representative office in Namibia instead of a fully fledged bank was influenced by the under performance of the banking industry  at the peak of the global  recession.
He said the worsening economic situation at that time in most world economies created doubt in ABSA to launch operations in Namibia as they could not risk increasing their labour force at a time when most companies were cutting down their spending on labour.
ABSA was granted a six month provisional operating licence by the Bank of Namibia this year but failed to  commence operations within the stipulated time prompting the central bank to cancel the licence.
According to a statement released by the BON governor  Tom Alweendo,  at the launch of the third quarter monetary policy recently, ABSA failed to utilise their allocated time for commencing business in Namibia hence the central bank was left with no option but to cancel  the licence. However, ABSA argues that their licence was not cancelled but they opted for a representative office considering the uncertainty characterising the banking industry at the time when the licence was issued.
“We did not have our licence cancelled but we opted for a representative office.
“Investing in the banking section during the time in question was not the best thing during that time and the bank had to take it step by step,” said Pangwa.
Pangwa said the representative office will not operate under the normal banking procedures as they will not be holding any transactions with the banking public in Namibia.
He said the representative office will be providing financial assistance to established companies that can produce capitalisation proof of N$15 million to N$30 million.
Pangwa also said the ABSA representative branch based in Windhoek will be answerable to the  head office in South Africa.
Namibia, Pangwa said experienced serious effects of the global economic crisis in the last quarter of 2008 to the second quarter of 2009 which saw the tourism and mining sectors experiencing slumps and labour shedding.
This ,He said influenced ABSA’s decision to take a cautious approach on commencing business operations in Namibia.
He said Namibia is considered part of the bank’s African Portfolio  including Mozambique, Tanzania and South Africa hence ABSA’s operations in Namibia is essential to the bank’s expansion. Pangwa  revealed that  it is within ABSA’s considerations to take advantage of the investment opportunities in the country in the near future but emphasised that ABSA were taking it on a step by step basis.
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