WINDHOEK - The Minister of Industrialisation, Trade and SME Development, Tjekero Tweya, has dismissed perceptions by some critics that the African Continental Free Trade Area (AfCFTA), recently ratified by Namibia, will kill the already struggling infant industries in the country.
The Namibian government had initially granted various industries such as cement and dairy the Infant Industry Protection (IIP) status, most of which has since lapsed, leaving only chicken processing, with the aim to add value to Namibian products and create much-needed jobs.
The core of the argument is that promising industries often do not have the economies of scale that their competitors, often foreign, may have, and thus need to be protected until they can attain similar economies of scale.
Namibia has finally signed the AfCFTA, worth over US$2 trillion, which requires members to remove tariffs from 90 percent of goods to allow free access to commodities, goods and services across the continent.
South Africa, from which Namibia procures 80 percent of its imports, also signed the agreement.
In an interview with Tweya yesterday on the sidelines of his briefly meeting with some SADC trade and industry ministers, he said the AfCFTA deal to which Namibia is a signatory will not negatively affect infant industries.
“How will it kill them if we are opening up a bigger market? It will not kill them. The infant industry protection is to allow the smaller industries to grow so they participate in this bigger market. We cannot start big when you cannot start small. So you need to assist the smaller ones,” Tweya remarked.
Geingob signed the much-anticipated trade agreement during the Heads of State and Government of the African Union (AU) meeting at the 31st Ordinary Session of the Assembly held from July 1-2, in Nouakchott, Mauritania.
The country was one of the 11 African Union (AU) member states that shunned the agreement in March this year when 44 countries first signed in Rwanda.
According to Tweya, some sectors will be liberalised and the idea is to allow industries such as manufacturing to grow.
Regarding sensitive and exclusive products being liberalised to grow, he said: “That would only happen by allowing the industries to first grow. Improve the product and grow the quantity to make them competitive. All those measures will be there. They will be addressed through the annexures but also through the step-by-step opening up of the product by starting with these big services such as business services, telecommunications, transport and tourism,” he noted.
Tweya said the whole process will be done gradually to ensure the government helps small and medium enterprises to participate, so that smaller business sectors are not endangered.
To date a total of 49 out of the 55 AU member states signed the AfCFTA. Some of the key objectives of AfCFTA include the creation of a single continental market for goods and services, with free movement of business persons and investments, which will pave the way for accelerating establishment of the Continental Customs Union and the African Customs Union.
It also aims to enhance competitiveness at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better reallocation of resources.
The United Nations Economic Commission for Africa estimates that the agreement would boost intra-African trade by 52 percent by 2022.
Geingob is now expected to take the agreement to Cabinet before Tweya tables it in the National Assembly for its adoption and ratification.