Namibia and South Africa have enjoyed long cordial relations on multifaceted levels during the last two decades, spanning from political partnerships, shared history and certainly various multilateral agreements.
At the same time South Africa has been the biggest trading partner, hence its importance to our economy. Despite the fact that it exists as next-door neighbour, the economic gap, as far as the Namibian economy can reach, is farfetched.
Much has been researched on the amount of inflow of goods into Namibia, with the inclusion of simple products, as well as debates on whether we need to detach from the rand to our currency.
The growth of the Namibian economy has been highly dependent on the performance of the South African economy on a yearly basis.
This gives more reasons to strive and enhance our manufacturing industries to create more local enterprises that cater to our goal of being industrialized beyond the year 2030. However, to shorten the wide gap between the two countries, as well as detach the rand from our currency is not a linear process and it is controlled by several major factors.
These factors include the presence of regional economic blocs such as the Southern African Customs Union (SACU), pre-colonial history, political influence and the dominance of their economy in Africa.
The 1910, 1969 treaty agreements of SACU has birthed the early dominance of South Africa within the southern African regional bloc, establishing itself as the monopoly. The other countries that were affected were Botswana, Lesotho and Swaziland; of which all three served as South Africa’s three High Commission territories, before gaining control of Namibia, the then called South West Africa through the new directives given by the League of Nations in 1920.
Namibia was dubbed as its fifth province and remained so instead of it being prepared for independence and largely enslaved with the laws segregating the inhabitants from their land, economy, businesses, farms, natural resources and quality education.
The flow of trade and goods, and tariff barriers, among the smaller nations and South Africa, were guided entirely by South Africa based on the Common External Tariff crafted in South Africa. This gave them the lion’s share of financial revenue amounting to 90 percent.
That is to say that South African has primarily established protectionist policies to secure their control of prices and products on the goods traded which made them relatively competitive on the global market.
Currently, this has made South Africa the sub-imperial power within the ambit of Southern Africa. Moreover, its population is more than 50 million people, representing approximately 90% per cent of the total population of SACU.
South Africa further contributes over 90 per cent of the gross regional product and accounts for 88 per cent of the merchandise exports generated in the customs union.
Compared to Namibia, not only does South Africa dominate in terms of its capacity but it has a sophisticated financial sector, despite the looming world financial meltdowns. In addition, they have a well-established agricultural and manufacturing sector, more developed communications and transport infrastructure, and a range of advanced technological capabilities.
The huge difference in size and development of South Africa and its smaller neighbouring countries explains the intra-regional trade surplus that is heavily in South Africa’s favour, with the latter being the principal supplier of manufactured goods to Namibia. Thus, it may not be ideal to be detached from the rand at this very moment.
After the release of Nelson Mandela, the international community, particularly the Western States were adamant that South Africa would play a key and dominant role in the affairs of the African continent, pertaining to economic development, regional integration, interdependence, and political democracy and conflict resolutions.
However, South Africa may not have kept up with the momentum in ensuring its contribution to making Africa a global trading partner.
With its reluctance to lead, combined with hostility to its economic expansion, and at the same time, as it tries to tackle the profound legacies of the socio-economic legacies of apartheid, South Africa has to adopt an emerging multipolarity on the continent.
The past experiences and history of regional trade in southern Africa has highly influenced and determined the future prospects of regional free trade arrangements.
As much as Free Direct investment is important, in order for us to gain maximum returns, we would have to reduce the number of foreign loans, otherwise it would lead to a deficiency in trade, and a further decline in the socio-economic growth of our country.
Let us focus on the long-term and self-sustenance for generations to come!
Tuikila Kaiyamo holds a B. Arts (Hons) degree from the University of Namibia and a Masters in International Relations from Westminster University, London, UK.
2018-12-14 11:55:01 | 1 years ago