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We consume what we don’t produce and what we produce, we don’t consume

We consume what we don’t produce and what we produce, we don’t consume

How to revive an economy that has been relegated to a dustbowl is probably the most important question on many Namibians’ minds. Given that we have lost a whole semester, it is not wishful thinking that there will be a lot of catch-up to do in the remainder of the financial year. For this reason, one must expect a myriad of suggestions, some from forward thinkers and some from not-so-forward thinkers, on how everybody else should go about bringing life back to the economy.

The statement in the heading is not new but it encapsulates what a former finance minister was fond of calling an “open economy.” And this is exactly where our biggest challenge lies in the fast reconstruction of a post-lockdown economy.

There is not much that we could do about the lockdown. When the whole world around you shuts down, there is little reason to keep your own borders open. Nobody is going to come in any case. Monetise this with a small incentive from the international powers and there is all the more reason to tow the line and shut down the entire country.

There are about five and a half months left before we get to the end of the financial year. For the government, there is six and a half months left, putting them in a slightly better position to still mine something positive from a year that will go down in history as a calamity.

When we start asking meaningful questions about economic revival, the statement in the heading comes into play again. For a very large part of our economy, what we produce is for export, meaning that we are dependent on foreign market to ensure local prosperity. This immediately puts the squeeze on Namibian producers because it shows that local production is 100% dependent on exogenous factors over which we have no control.

Similarly, many people are bargaining on a quick reversal of the fortunes of tourism. This may or may not happen but don’t forget, from an economic perspective, tourism is an export product. The only difference is that you bring the foreign consumer to your own territory to pay for what you have to offer. Thus, just like the rest of the productive economy, tourism is dependent on what happens in other markets, not what happens here.

There is however, one sector where I believe we should put of focus and concentrate our efforts. That is agriculture.

It is the one sector where we produce mostly for ourselves. Depending on which definition one applies, it is also the sector with the biggest impact on local conditions. It is often disregarded because of its relatively small contribution to Gross Domestic Product but it is not an exaggeration to state that it is the most important economic sector for Namibia.

The list of ancillary benefits derived from agriculture is endless. It has been well-researched by a plethora of development agencies, so no need to repeat that wisdom here. The fact is, all through the lockdown, it was the one industry that has not come to a standstill. It took a breather in some respects but the animals in the field and the crops in the ground continued to multiply and grow regardless of external circumstances.

But agriculture is not restricted to husbanding something or planting seeds in the ground. Those are only the primary aspects of the industry. There is entire value chains that depend on this production, and those chains are very weak in Namibia hence the reason why the minister always reminded us that we eat what did not grow, and what we dig from the ground, we send someplace else.

Agriculture further offers many opportunities for involvement at community level. Here I am not thinking about growing mahangu only for the household and only for one season, I am rather envisaging the type of commercial developments we see in the north were community labour is augmented by the immense power of capital.

Then there is the potential of agriculture to be the springboard for our plans to build a prosperous future based on an industrial economy which serves both the local and the export market. The stuff that we produce in agriculture are far more suitable for local value adding than the very expensive minerals we mine. What’s more, agricultural industrialisation does not need to be concentrated in large centra with massive capex investments. The nature of the products demand that value adding is decentralised and that it is built on community participation.

Upscaling our investment in agriculture is in my mind just as big a priority as the investments we need in infrastructure. That the money is available, I have no doubt. That the returns can be generated, I also do not doubt. All we now need is a realignment of economic and development priorities to focus on an industry which we can control, which we can consume ourselves (at least to a substantial degree) and which will relieve us of the burden implied in the heading.


 

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 29 years. The newspaper started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at https://economist.com.na. His editorial focus is on economic analysis based on budget analysis, dissecting strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored scores of journalism students as interns and as young professional journalists. He often assists economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to [email protected]