Coen Welsh | Nov 14, 2017 | 0
On the Factory Floor – Manufacturing: The future driver of growth in Namibia
A common perception locally is that Namibia is not a manufacturing country. Namibia is generally considered as a mining, agricultural or tourism based country. However, information provided in the national accounts of 2010 from the National Planning Commission contradicts these perceptions.
At Current Prices in 2010, the manufacturing sector contributed N$11 725 Million (14.4%) to the gross domestic product (GDP) of Namibia. (total GDP = N$ 81 509 million). In contrast, mining and quarrying contributed 8.8% to the GDP and agriculture and forestry contributed 4.1% . Unfortunately a category for tourism does not exist in the national accounts. The nearest would be hotels and restaurants, 1.7% of the GDP, as well as a part of transport which contributed 2.6% to GDP.
In spite of these perceptions, one of the main goals for Namibia in Vision 2030, as approved by the government, is that the country should be industrialised by year 2030. To reach the growth targets of Vision 2030, the economy must attain a growth rate of approximately 6% per annum. This means that the manufacturing sector will have to achieve a growth rate of more than 7% annually to significantly contribute to this goal. During the past 6 years, manufacturing growth averaged 6% per annum.
Manufacturing growth in general is a conducive vehicle for economic growth as it has a very high spill over effect in the economy. Manufacturing growth has a high multiplier effect and for every N$1 spent on manufacturing development, an additional N$1.50 to N$2.50 (depending on the sub-sector of manufacturing) is generated in the rest of the economy through products and services provided to the manufacturing sector. Thus, expanding the manufacturing sector is important to developing the economy of a country.
The manufacturing sector can grow faster than the present 6% per annum and in this way assist in increasing the general growth rate of Namibia, as well as in job creation. For instance, exploring the SADC markets north of the country present good export opportunities for locally manufactured products. For significant manufacturing growth to take place though, a few problems have to be addressed. The most important of these are:
Preferential government procurement of locally manufactured products through the finalisation of the new Tender Board Act and regulations.
Finalisation of the activities of the sub-committee consisting of the Ministry of Home Affairs, the NCCI, the Namibia Manufacturing Association and the Namibia Employers Federation to simplify procedures for work permits for scarce and skilled staff, and promotion of technical and business skills training in academic institutions and industry.
Finalisation of an industrial policy, including incentives for manufacturers, which will facilitate accelerated manufacturing development in Namibia.
Promotion and facilitation of trade with Angola by implementing the bilateral trade agreement between Angola and Namibia, as well as placing a trade attache in Ondjiva to assist Namibian exporters to that country.
Facilitation of procurement of locally manufactured products by the retail sector in Namibia. The restrictive business practices causing many retail groups not to purchase or sell Namibian produced products must be addressed by government and the competition commission.
Provision of a level playing field for locally manufactured products vis-a.vis imported products by insisting that imported products should comply with the same standards as locally manufactured products.
There is still significant potential for accelerated manufacturing development in Namibia. However, to enable this, relevant authorities should address these constraints to development experienced by manufacturers. This will greatly assist Namibia in reaching the goals of Vision 2030 and providing jobs for all its people.