Windhoek
While Namibians pay less than South Africans for beef, canned fish and lamb, locals are still paying more for dairy products, maize meal, eggs. pasta, pork, poultry and wheat flour. In fact, Namibians pay approximately 30 percent more for chicken compared to South Africans.
This is according to a Retail Price Monitoring Report being produced by the Namibia Trade Forum (NTF), which since 2013 records and monitors retail prices for locally manufactured products that receive some sort of government support measure. The support measures are in the form of Infant Industry Protection, Market Share promotion schemes and quantitive support measures, such as quotas.
The NTF says the main objective of the price monitoring is to assess the impact of government support on consumers, as well as to contribute to further policy formulation. “The high price of chicken in Namibia is mainly attributed to the feed costs, which is 60 percent of the total production cost. Namibia is a net importer of feeds and such feed is primarily sourced from South Africa and international markets,” reads the NTF report.
The report further states that Namibia’s dairy industry has been under stress over the years due to various factors. “The playing field of milk production between Namibia and South Africa is not level as Namibia produces milk under the meat industry standards, such as prohibition of growth stimulants or milk production enhancers, unlike in South Africa where this is a common practice,” NTF said.
The NTF also points to the size of the South African economy, saying due to the scale of operations there that country is able to achieve large economies of scale.
Additional factors that influence dairy prices are said to be the ongoing drought, as well as Namibia’s 15 percent Value Added Tax (VAT) on milk, as opposed to South Africa where milk has zero VAT. “However, what is interesting from the retail price monitoring data is that even after the quantitive measure was set aside in 2014, milk prices did not necessarily drop, implying that the price increase was not necessarily due to the protection of this industry,” reads the NTF report.
The report also shows that locals paid approximately N$12.49 more than South Africans in 2014 for maize meal and N$14.74 more in 2015, while for wheat flour local consumers paid N$15.80 more in 2014 and N$8.20 more in 2015. The report, however, indicates that South Africa also experienced a 10 percent increase in maize prices and a 9 percent increase in wheat flour by between 2014 and 2015.
“What is important to note here is that Namibia is a net importer of cereal with close to 80 percent of grains coming from outside. Hence, the depreciation of the Namibia Dollar against the US Dollar also has significant impact on imported products,” the report states.
NTF records the prices on a monthly basis at various leading retailers in both countries. In Namibia, the recording is done at 22 shops, while in South Africa it is done at 11 shops. Retailers include Shoprite, Checkers, Spar, Pick n Pay and Woermann Brock, including outlets at Oshakati, Swakopmund, Mariental, Gobabis and Windhoek. In South Africa, where applicable identical shops are monitored in Cape Town and Gauteng Province.