Trade minister Lucia Iipumbu believes Namibia’s newly launched African Growth and Opportunity Act (AGOA) utilisation strategy will create enormous opportunity for the private sector.
She said it will send positive signals to international investors about bankable domestic investment opportunities. She added government is confident that an integrated and advanced manufacturing sector can bring about higher levels of economic growth and development across the economy.
The AGOA utilisation strategy focuses on how Namibia can secure market success and grow its exports to the United States (US) by taking advantage of preferential trade under the AGOA facility.
From a sectorial perspective, Namibia’s exports to the US are dominated by natural or cultural pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof, imitation jewellery and coins, all of which constitute a combined 66% of the country’s exports. Iipumbu advised that given the dominance of the sector in Namibia’s exports, it would be worthwhile considering diversifying the sectoral mix further by deepening exports in other industries such as agriculture and fisheries where Namibia has promising trade potential.
Iipumbu added Namibia has been making significant progress in the development of key policies, legal frameworks and physical infrastructure such as the port, rail, and roads as part of development corridors to create a conducive environment and facilitate trade for the private sector to be competitive both locally and globally.
“The private sector is called upon to take advantage of all these opportunities in order to export their products to the US under this agreement. I also call upon the private sector to diversify their production capacity in order to enhance trade with the US on eligible products for preferential trade benefits under AGOA,” she urged.
The minister continued that the enhanced AGOA should go beyond market access by strengthening technical assistance and capacity building initiatives for Namibian entrepreneurs and businesses. “From our vantage point, I strongly feel that we have a notable footing to utilise the opportunities presented to us by AGOA to access the US market.” According to the national AGOA action plan for Namibia, the main source of comparative advantage for Namibia which can be strategic conduits to increase the country’s utilisation of AGOA include a relative abundance of reasonably priced, educated and stable labour force, conducive climate for some indigenous natural plant species, availability of natural resources such as an abundant supply of mineral resources and a competitive investment environment shaped by effective incentive schemes.
Comparative advantage is one of the principal theories in understanding international trade and the benefits of trade liberalisation. However, comparative advantage is a concept or relative costs of production. No country can develop a comparative advantage in everything, and in the same vein, any single country has a comparative advantage in the production of some product, commodity or service.