Josef Kefas Sheehama
His Excellency Dr Hage G. Geingob, President of the Republic of Namibia, has declared that the era of exporting raw materials from Namibia is over. He made these statements during his address at the EU-Namibia Business Forum in Brussels, Belgium.
Article 100 of Namibia’s Constitution
states that “Land, water and natural resources below and above the surface of the land and
in the continental shelf and within the territorial waters, and the exclusive economic zone of Namibia shall belong to the State if they are not otherwise lawfully owned.”
Therefore, wealth embodied in natural resources makes up a significant proportion of the wealth of the nation.
Harvard defined a state as a political division of a body of people that occupies a territory defined by frontiers. Henceforth, the separation of powers is important because it provides a vital system of checks and balances.
I, therefore, commend His Excellency for making this bold decision and revealing that the government is looking to tighten rules to reduce the export of raw minerals and encourage potential investors to consider value addition to generate more revenue for the country and create jobs for the teeming masses. This move aimed to boost the value of the exports. It is an excellent opportunity for the domestic market to grow, and this will address unemployment in the country. His Excellency makes a very remarkable economic statement by encouraging economic partnership, grounded in the common interests of forging a more equitable and sustainable world, and seeks to deepen cooperation and broaden areas of mutual collaboration to construct sustainable industrial clusters for Namibia and the European Union.
We need to revisit policy frameworks and solutions that give the economy every chance to drive inclusive growth.
Therefore, the investments that we make today have the potential to turn the challenges we face into great opportunities that will have generational and global impacts.
That is the moment that we are in right now, and that is the ability, then, that we must participate in where this all goes.
I am extremely optimistic about the future of our country and, by extension, the impact it will have on the rest of the world.
Furthermore, as we start this policy and this regulation essentially, what we are saying is that we do not want raw materials to be exported from Namibia.
It is not an economical decision that we waste foreign exchange, and, in the process, we export our jobs out there and lose a lot of value. So, if we can process the raw materials, we will have value locally; we will keep the jobs and we will create wealth for our people, which is what this reform policy should advocate.
Hence, the intention is to attract more investment in the downstream industry. This means policy reform will encourage foreign investors to set up processing plants here in Namibia. This will automatically create job opportunities for our country. This smart trade has the potential to grow the economy while creating innovation and creativity within domestic markets.
This will lead to economic diversification and maintaining sound GDP.
Additionally, the mining sector in Namibia remains a key driver of sustainable economic development. Indeed, this sector contributes a lot to exports as well as having crucial inter-linkages with other sectors of the economy.
We should accept that our mining is underdeveloped, resulting in exporting raw materials. The mining sector is critical for carrying out mineral exploration, extraction, processing and marketing because Namibia lacks enough capital and technological resources to finance such capital-intensive large-scale.
Moreover, the contrary is true that we believe this move can spur the growth of processing plants in the country; others apprehend that the strategy might lead to a reduction in the volume of trade in various minerals.
Many African countries fear that this could stifle trade with African partners since a country that has banned the export of such minerals would not allow raw materials to be sent to another nation. However, we should be optimistic that the policy will succeed in the long run, provided an effective policy is implemented. We need to understand that most of the raw materials used, for example, the development of green technology, are sourced from Africa. The continent deciding to dictate the pace of import and export of such materials would make it an unstoppable force. We cannot continue exporting our raw materials. The potential investors should create new jobs and transfer skills for the benefit of Namibians. Therefore, we do not lack policymaking, but implementation remains a problem. If policy reform discourages the export of raw minerals, I believe extra steps need to be taken so that the Namibian people can get more out of their resources.
This move is seen as a step to encourage the growth of value chains.
According to the United Nations’ Comtrade database on international trade, Namibia’s exports to Australia amounted to N$88.8 million, which is US$4.9 million in 2021, while the EU imported raw materials worth N$129 million, as well as fuels and mining products worth N$2.2 billion from Namibia. This is causing revenue loss.
Statistics show that while raw material exports are sold at a low price, finished products are imported at three times the price.
To support traders to add value, the Minerals Policy of Namibia should be reformed to help foreign investors embrace value addition, and subsequently turn all traders into industrialists to boost domestic economic activities.
Hence, being exporters of raw materials, rather than of refined products with more added value, denied our people employment opportunities.
To this end, the raw material export ban would encourage the construction of processing facilities in Namibia and allow the people of Namibia to claim a larger share of the value chain.
Namibia is a leading producer of zinc, and it has reserves of fluorspar; the country is estimated to be the third-largest lithium producer in Africa by 2026.
Therefore, a partnership centred on critical minerals would transform this into a mutually- beneficial strategic economic partnership.
* Josef Kefas Sheehama is an independent economics and business researcher.