The Presidential Session of the third session of the Namibia-South Africa bi-national commission (BNC) on Friday saw the creation of a financing instrument named the Industrial Development Fund, as well as the formation of a business council between the two countries. This is as Namibia’s trade minister Lucia Iipumbu emphasised that efforts to ensure a viable value chain development in the automotive sector is key to trade relations between the two countries.
The Namibia-South Africa Business Forum and exhibition, held on the margins of the BNC, brought together business executives from the two countries to explore trade and investment opportunities, network and discuss ways to strengthen partnerships to deepen bilateral economic cooperation. This included defining a collaborative model to enable the two countries to capitalise and maximise on opportunities stemming from the implementation of the African Continental Free Trade Area (AfCFTA).
The forum and exhibition also focussed on strategic priority sectors such as agriculture and agro-processing, automotives, clothing and textile, and green hydrogen, including exploring opportunities to strengthen cross-border value chains, along with the integration of the requisite infrastructure and logistics’ supply chains.
Participation at the forum was through invitation, targeting chief executive officers, chief operating officers, business development managers and export managers, amongst others. Cabinet ministers and senior government officials representing both countries were in attendance.
South African president Cyril Ramaphosa and president Hage Geingob co-chaired the BNC, and later addressed the business forum and visited the exhibition.
Trade between South Africa and Namibia amounted to US$4.8 billion in 2022, making the two countries substantial intra-African trading partners, reflecting the strong bond between the two nations.
Namibia’s main export partner remains South Africa at 27% of total exports, followed by the United Kingdom, United States, Angola, The Netherlands and Spain. South Africa is at 66% of total imports also Namibia’s major import partner, followed by The Netherlands, United Kingdom and China. Trade relations between the two countries on average reflects a trade balance of N$30 billion, mostly in favour of South Africa.
Meanwhile, manufacturing goods make up 90% of South African exports to Namibia. The underlying basket is highly diversified, ranging from consumer goods like automotive and cosmetics, to capital goods like mining equipment and infrastructure products. Namibia’s export basket consists mainly of minerals, live animals, beverages, fish and preparation of cereals as the top five products. The technical session of the business forum explored various cooperation nodes in key sectors of agriculture and agro-processing, textiles and clothing, automotive and renewable energy, and green hydrogen. In addition, the enabling sector of transport and logistics, with an emphasis on rail, formed part of the deliberations.
“This need is driven by the fact that both our countries are faced with the quadruple challenges of poverty, unemployment, climate change and inequality. Both South Africa and Namibia share the first and second ranks as the most unequal societies in the world respectfully,” observed the trade minister.
“Doing good business together will ensure that our economic collaboration reinforces our commitment towards the Sustainable Development Goals, ensuring a healthy planet and leaving no one behind. Through ensuring innovative approaches in collaboration and smart partnerships, we are confident that the private sector can be the catalysts of change,” Iipumbu added.
At the same occasion, Namibia Chamber of Commerce and Industry vice president Patty Karuaihe-Martin encouraged businesses to engage strategically and honestly to ensure bottlenecks in trading and investing at a bilateral level are ironed out.
“Africa’s intra-trade is led by the Southern African Customs Union (SACU) because of our trade relations, the physical infrastructure, the financial systems governance, and the political will. However, more is desired as Namibia aspires to add value to its resources and develop its novel sectors. South Africa is very instrumental in this, not only because of its market size, but also the technology and economic knowledge that we can use here,” she noted.
Karuaihe-Martin added that increasing domestic output, however, has to be met with a well-developed agro-processing value chain, and admitted that South Africa is ahead in this regard.
“Another important enabler that Namibia and South Africa should strengthen is infrastructure such as roads and railways at the regional level, which connect us to the rest of the continent,” she said. “The business community is cognisant of the fiscal spaces available. Therefore, bilateral funding and collaboration can be utilised in this regard”.
Moreover, the NCCI vice president acknowledged the work of the Trans- Kalahari Corridor Secretariat regarding railway initiatives, and the next step is to enable private participation in rail tracks.
“Furthermore, with our different resources endowment, the AfCFTA agreement allows for cumulation for value-addition to take place in any of the member countries. As the private sector, we need to take advantage of this arrangement for our products to meet the rules of origin requirements. This opens up opportunities for our two countries to build cross-border value chains, especially in the automotive and textile industries. It has been noted that the level of development among member states of the AfCFTA will create winners and losers. These can be avoided if we can tap into our bilateral synergies to create opportunities for new transactions which guarantee mutual economic benefits,” said Karuaihe-Martin.