China implemented a zero tariff policy on imports from 53 African countries with which it has diplomatic ties on 1 May 2026. An import tariff is a tax levied on goods imported from a foreign country. This policy means that African exports to China will no longer be subject to import duties upon entry into the Chinese market. The policy comes against a backdrop of increasing economic ties between China and the African continent, as well as China’s expansive industrial sector. Over the last 50 years, China’s economy has grown by an average of around 10% per annum, making it one of the fastest-growing economies in the world. With such a strong economy, deepening political and economic ties, and rising geopolitical tensions globally, this move appears both logical and strategic.

African exports to China are mainly in the form of raw materials and minerals with limited value addition, while imports from China are predominantly machinery and equipment. The policy makes African goods more competitive in the Chinese market, potentially increasing demand for them in China. While the policy is likely to benefit African countries through increased export volumes, foreign currency earnings, employment creation, tax revenue, and improved external balances, its impact is likely to remain moderate in the short to medium term due to production and export capacity constraints.

Like many other African countries, Namibia’s exports to China are dominated by primary goods, particularly uranium, copper, zinc, nickel ore, fish, and beef. Namibia’s exports to China account for approximately 18% of total exports, making China one of the country’s major export destinations. The potential benefits for Namibia exist at both the microeconomic and macroeconomic levels.

At the microeconomic level, firms exporting goods to China are expected to increase production and generate more revenue, potentially earning higher profits. For workers, however, it is difficult to determine whether the policy will lead to higher wages, as this will depend on several factors, including the cost structures of exporting firms and the influence of labour unions. If wages do rise, consumer spending may also increase, leading to greater circulation of money within the economy and possible spillover effects across other sectors. Nevertheless, wages are generally sticky; therefore, even if they increase, the rise will likely be less than proportional to the increase in exports.

In terms of employment, the policy may lead to only limited job creation, particularly in the mining sector, which is more capital-intensive than labour-intensive. According to the National Planning Commission report of 2021, although the mining sector grew by an average of about 14% per year between 1981 and 2018, it contributed only 1.7% to total employment in 2018. In contrast, subsectors such as beef production and fishing have higher employment elasticities, even though their export volumes to China are relatively small compared to mining. According to the 2018 Labour Force Survey report, the agriculture, forestry, and fishing sectors employed 23% of all employed persons, making them more likely to generate employment gains relative to the mining sector.

At the macroeconomic level, the policy also presents several potential benefits. First, it is expected to stimulate production and contribute positively to Gross Domestic Product (GDP). Second, government revenue is likely to increase as output expands. However, for sectors such as mining, where foreign ownership remains high, increased profits resulting from higher output may not necessarily translate into greater domestic wealth because a significant portion of earnings is repatriated abroad. 

According to a National Planning Commission report published in 2021, foreign ownership of mines in Namibia stood at 88.1%. As such, the benefits to the domestic economy are largely tied to the sector’s contribution to government revenue. Data from the Chamber of Mines of Namibia indicate that, in 2023, the mining sector contributed approximately N$6.9 billion in corporate taxes, royalties, and export levies, accounting for about 8% of total government revenue.

Moreover, increased exports are expected to improve Namibia’s external position. Namibia currently operates a trade deficit with China, and an increase in exports could help narrow this imbalance. In addition, foreign exchange reserves are likely to rise as more foreign currency is earned through exports. Foreign reserves are particularly important for an import-dependent economy such as Namibia because they facilitate the importation of goods and services.

In conclusion, while China’s zero tariff policy is likely to generate benefits at both the microeconomic and macroeconomic levels, challenges such as limited infrastructure, geopolitical risks, climate change, and low commodity prices may constrain these gains. Furthermore, the benefits at the microeconomic level are expected to remain modest in the foreseeable future. 

Therefore, coordinated efforts aimed at ownership reforms, export diversification, and infrastructure development should be prioritised to enable Namibia to fully take advantage of the zero tariff policy.

*Muine Samahiya is an economist and the views presented here are his own.