How will a Phosphate-based industry contribute to Namibia’s development policies and goals?
By Lauren Davidson
Economist at Chamber of Mines of Namibia.
Currently, Namibia imports the bulk of its fertiliser from South African manufacturers, which amounted to N$515.13 million in 2018.
Due to the high import costs and price of fertiliser, it is generally not an affordable item for subsistence farmers. Fertiliser that is produced locally will be available at a much lower price to commercial and subsistence farmers with significant benefits to be realised. In particular, cheaper fertiliser will result in substantial productivity gains and increases in agricultural output from the subsistence sector, along with improved food security in rural areas and less dependence on expensive food imports.
Achieving Economic Diversification and Integration
Namibia’s economic policies commonly call for economic diversification and industrialisation through harnessing its competitive advantage and leveraging on natural resources.
Firstly, a fully integrated phosphate industry will achieve higher levels of economic integration, as the production of a final product will be locally consumed and support growth in other sectors of the economy, such as agriculture and food retail.
Secondly, fertiliser production will diversify the economy and accelerate industrialisation, as it is produced from an enriched natural resource, with all downstream value addition taking place within the country’s borders.
Improving Food Security and Trade Balance
The local production of fertiliser also means that Namibia is no longer dependent on external producers for its own requirements. A phosphate industry will position Namibia to become a net exporter of fertiliser servicing global agricultural markets.
Apart from the significant export and tax revenues that will be generated in a fully developed phosphate-based industry, there are also significant benefits internally for the local, regional and national economy. This will translate into an improved trade balance and reduced trade deficits in the long term.
Increasing Job Creation, Knowledge, and Skills
The envisioned development of a marine phosphate industry in Namibia is projected to create over 51,600 direct, indirect and induced jobs through growth in the mining, processing, fertiliser production, agriculture and transport sectors, as well as the expansion or creation of supporting businesses that provide various essential products and services.
Namibia stands to benefit from a growth in human capital, as specialised skills and knowledge of the phosphate industry will be transferred to the local workforce, which is a key element identified in national policies to propel manufacturing activities and create a more diversified economy.
Towards Co-Existence and Economic Upliftment
The existence of a marine phosphate industry within the Namibian mining sector will contribute substantially to achieve the desired National developmental objectives and targets in key policy agendas.
Allowing its development will create new local industries and support growth in others. Such an industry will undoubtedly be of great measure in achieving the country’s desired economic transformation and goals of economic independence and industrialisation, contributing to the improved well-being of all Namibians.