Guest Contributor | Feb 21, 2024 | 0
Local mineral beneficiation can drive jobs and growth
By Josef Kefas Sheehama.
The President, HE Dr Hage Geingob, has declared that the era of exporting raw materials from Namibia is over. This statement was made by the President during his address at the EU-Namibia Business Forum in Brussels, Belgium.
Article 100 of the Constitution states that” Land, water, and natural resources below and above the surface of the land and in the continental shelf and within the territorial waters and the exclusive economic zone of Namibia shall belong to the State if they are not otherwise lawfully owned”.
The wealth embodied in natural resources makes up a significant proportion of the wealth of the nation and I commend His Excellency for making this bold decision and revealing that the government is looking to tighten rules to reduce the export of raw minerals. Also to encourage potential investors to consider value addition to generate more revenue for the country and to create more jobs.
His Excellency makes a very remarkable economic statement by encouraging economic partnerships, grounded in the common interests of forging a more equitable and sustainable world, which seeks to deepen cooperation and broaden areas of mutual collaboration. This is based on sustainable industrial clusters for both Namibia and the European Union. We need to revisit policy frameworks and solutions that give the economy every opportunity to drive growth that is inclusive.
Therefore, the investments that we make today have the potential to turn the challenges we face into great opportunities that will have generational and global impacts. That is the moment where we are right now and that is the ability, then, that we must participate in where this all goes. I am extremely optimistic about the future of our country and, by extension, the impact it will have on the rest of the world.
Furthermore, as we start this policy and this regulation essentially what we’re saying is that we do not want raw materials to be exported from Namibia. It is not an economic decision that we waste foreign exchange, and, in the process, we export our jobs out there and therefore lose a lot of value. So, if we can process the raw materials, we will have value locally, we will keep the jobs, and we will create wealth for our people, which is what this reform policy should advocate.
Hence, the intention is to attract more investment in the downstream industry. This means policy reform will encourage foreign investors to set up processing plants here in Namibia. This will automatically create job opportunities for our country. This smart trade has the potential to grow the economy while creating innovation and creativity within domestic markets. This will lead to economic diversification and maintaining a sound GDP.
The mining sector in Namibia remains a key driver of sustainable economic development. Indeed, this sector contributes a lot to exports as well as having crucial inter-linkages with other sectors of the economy. We should accept that our mining is underdeveloped resulting in exporting raw materials. The mining sector is critical for carrying out mineral exploration, extraction, processing, and marketing because Namibia lacks enough capital and technological resources to finance such capital-intensive large-scale operations.
Moreover, the contrary is true that we believe this move can spur the growth of processing plants in the country, while others apprehend that the strategy might lead to a reduction in the volume of trade in various minerals. Many African countries fear that this could stifle trade with African partners since a country that has banned the export of such minerals wouldn’t allow raw materials to be sent to another nation. However, we should be optimistic that the policy will succeed in the long run, provided an effective policy is implemented. We need to understand that most of the raw materials used, for example the development of green technology is sourced from Africa. When the continent decides to dictate the pace of import and export of such materials, it would become an unstoppable force.
We cannot continue exporting our raw materials. The potential investors should create new jobs and transfer skills, for the benefit of Namibians. Therefore, we do not lack policymaking, but implementation remains a problem. If policy reform discourages the export of raw minerals, I believe extra steps need to be taken so that the Namibian people can get more out of their resources.
This move is seen as a step to encourage the growth of value chains. According to the United Nations’ comtrade database on international trade, Namibia’s exports to Australia amounted to N$88,8 million, which is US$4,9 million, during 2021, while the EU imported raw materials worth N$129 million, as well as fuels and mining products worth N$2,2 billion from Namibia. This is causing revenue loss. Statistics show that while raw material exports are sold at a low price, finished products are imported at three times that price.
To support traders to add value, the Minerals Policy of Namibia should be reformed. The policy reform will help foreign investors embrace value addition, and subsequently turn all traders into industrialists to boost domestic economic activities.
The proposed raw material export ban would encourage the construction of processing facilities in Namibia, thus allowing the people of Namibia to claim a larger share of the value chain. Namibia is a leading producer of zinc and has reserves of fluorspar and it is projected to be the third-largest lithium producer in Africa by 2026.
Therefore, a partnership centered on critical minerals would transform the extractive sector into a mutually beneficial strategic economic partnership.