History of credit in Namibia

Credit is a word with various meanings. These include praise, recognition or acknowledgement and that is why the list of names at the end of a movie is called credits. It can also refer to reputation or character, but most often we use it to refer to a product or service that is provided now and paid for in the future.
Most of us use credit to purchase a house, a car, clothes and sometimes even groceries. If we take on too much credit, we find it difficult to get out of the cycle of indebtedness. In Namibia, indebtedness has become one of our biggest problems and needs to be tackled sooner rather than later.

In this week’s column, I investigate the history of credit in Namibia under German colonial rule and see if we can learn any lessons from the past.

The credit system evolved in the early 1840s and started to destroy the economic structures of many Namibian communities. It is recorded in the history books that around this time Jonker Afrikaner incurred heavy debts with the trader Morris. It is speculated that Jonker’s raids on the Ovambanderu in 1846 was a direct response from Morris on him to pay his debts.

By the late 1890s, the German Administration had realised the extent of the problem and the administration decreed that “no person could be sued for credit”. Pressure from the business community forced the administration to suspend the regulation on 22 February 1899.

Increases in trading activity also brought problems for Samuel Maharero. The traders expected his help in collecting their debts and held him personally responsible if debts were not paid. These rising debts led to the “sale” of land, and traders such as Gustav Voigts, Fritz Wecke, Ludwig Conradt and John William Wallace of Okombahe were paid in this way. It is recorded that the missionaries Diehl and Viehe sharply attacked Samuel Maharero for “selling” the Okakango locale, north of Okahandja, to settle his debts.

This made it necessary for the District Chief of Okahandja, Zürn to relieve the pressure on Samuel Maharero by declaring that “while Samuel himself still has unpaid debts, he could not accept responsibility for the debts of others”.

This increase in trading activities on credit (and the method of debt collection) drew attention to the more serious problem of the “land issue”, which conflicts with the notion of a “settler colony”.

By 1903, a Credit Commission appointed by the German Government to study the problem of credit and look into how indigenous people should settle their debts to the traders completes its recommendations. Theodor Leutwein, (the “Kaiserlicher Landeshauptmann” or Governor) issued a proclamation in July 1903 that enacted the long awaited credit regulations. The credit regulations outlawed the sale of “tribal” (communal) land to curb abuses. Recognising that the regulations would restrict their ability to collect debts, the traders used even harsher methods to collect outstanding debts before the regulations came into law.
In early 1904, just before the Ovaherero uprising, Gustav Sonnenberg held discussions with Chief David Kambazembi on the growing indebtedness of the Ovaherero. The uprising had several causes including the loss of control and ownership of traditional land, moneylending by traders, increasing debts, cases of rape, the sale of alcohol, and threats to Samuel Maharero’s life.

In history we can see that the business and financial practices under colonial rule led to the people of the country becoming disqualified from the economic opportunities of their own country. Our modern struggle for Independence will only be complete when the business and financial practices become a qualifying force to enable Namibians to participate in the economic opportunities of the ‘Land of the Brave’.