By Wezi Tjaronda
WINDHOEK
Electricity tariffs for manufacturers in Windhoek may be reduced by a further 10 percent by July 2008, the Namibia Manufacturing Association (NMA) has announced.
In 2005, companies received a reduction of 10 percent on their electricity charges.
This follows an intervention by the NMA.
NMA Chief Executive Officer, Hennie Fourie, said in the NMA monthly newsletter this week the high rates which Namibian manufacturers paid for electricity made them less competitive compared to their counterparts in SACU.
Fourie said this compelled the NMA to compile an Electricity Price Comparison Report in 2004, which indicated that manufacturers paid between 60 and 70 percent more for electricity in Namibian cities and towns than their South African counterparts.
The comparison report also found that large manufacturers in Windhoek also paid 20 percent more for electricity than other consumers.
He said the NMA Board decided to update the report to determine how the situation has changed over the past three years.
“The NMA’s presentations and the intervention of the Electricity Control Board (ECB) have led to manufacturers getting a nine percent lower electricity charge increase in 2005 in Windhoek compared to other consumers,” Fourie said.
He said the ECB has also taken measures to ensure that the tariff structure is investigated to ensure that Windhoek manufacturers pay cost reflective tariffs and bring the different tariffs in line.
Although Namibia’s roadmap, Vision 2030, expects manufacturing and services sectors to contribute 80 percent of Namibia’s GDP and that the export of largely processed goods to account for not less than 70 percent of Namibia’s total exports, since 16 years ago, growth in these sectors has been minimal.
One of the reasons for this was found to be the high electricity costs that manufacturers pay.
A Bank of Namibia report said the country had very little industrial growth so that it continued to import most of the manufactured products, mainly from neighbouring South Africa, because the sector was characterised by structural weaknesses and operational constraints that include high input costs relating to electricity, transport and port charges.
Meanwhile, a survey on manufactured goods in Namibia is underway to enable the manufacturers association to address shortfalls in the manufacturing and export environment.
The study, which started this week ends in October.
Fourie said exports of manufactured goods in Namibia were becoming increasingly important in the economy.
But to create a better export environment for manufacturing businesses and to have information on all export products available when participating in foreign trade negotitions, the NMA decided to commission a study in order to develop a database of export products manufactured in Namibia.
The study, being carried out by Consut Buro and Business Intelligence Africa, a market research company, is financed by the Namibia Trade & Poverty Programme (NTTP). Fourie said the team would conduct telephonic interviews with all manufacturing enterprises and requested all manufacturers to participate actively in telephonic interviews and to share information with the study team.
“This will enable the consultants to hand in a complete database and will enable the NMA to address possible shortfalls in the manufacturing and export environment,” he said.