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Home / Opinion - Manufacturing can turn Namibia’s economy around

Opinion - Manufacturing can turn Namibia’s economy around

2022-10-04  Josef Kefas Sheehama

Opinion - Manufacturing can turn Namibia’s economy around

The Namibia Statistics Agency (NSA) released the results of the Gross Domestic Product (GDP) for the second quarter of 2022, at a media briefing held on the 28 September 2022, //Kharas region.

In 2022, the Gross Domestic Product (GDP) increased by 5.6% during the second quarter. The largest contributors to growth in GDP in the second quarter were the manufacturing, accounting for 12.1%, wholesale and retail trade 10.2% and agriculture 10%. According to NSA, the Namibia economy grew by N$5.4 billion compared to the N$43.2 billion recorded in the previous quarter of 2021. The main contributor to the GDP growth of 5.6% during the quarter under review was the mining and quarrying sector, which contributed 2.6% to the GDP growth followed by financial services with 1.1%. This means that the domestic economy expanded to N$48.6 billion in the second quarter of 2022. As the recovery in the economy continues, the risk of sector-specific tightening measures or removal of accommodation is growing. Therefore, we need to protect and grow our manufacturing industries by funding them, placing huge taxes and levies on imported goods, creating policy that would encourage more production and getting our infrastructure up to date.

Namibia has succeeded to reinsert its economy back into world trade in the 1995 following a long period of political difficulties and international reactions to the apartheid regime. Since the early 1995, successive Namibia government has faced major economic policy challenges to change the institutional structure of the economy and adapt the trade policy regime to the new agenda and structures. Manufacturing has generally been described and accepted as a catalyst for economic growth and development all over the world, industrialisation under industrial sector is widely conceived as a critical tool for accelerating economic growth and development. Namibia needs to implement reforms that will open up and attract investments into key subsectors within the manufacturing and agro-processing sector, thus, creating opportunities along value chains. Macroeconomic stability, good governance and provision of infrastructure are supporting factors that will improve productivity and output across sectors.

Furthermore, inclusive growth embraces the need for a strong industry-led economy. For instance, industrial sectors such as manufacturing and agro-processing should be the engine of economic transformation. Rapid expansion of the manufacturing and agro-processing sectors will lead to massive job creation, diversification of export earnings and reduction in importation of foods and other items that can easily be produced locally. The manufacturing sector can potentially play a key role in the overall economic development agenda as well as initiatives geared at employment creation and effective reduction of poverty. We need to understand that the manufacturing sector is a big employer of both skilled and unskilled labour. If the manufacturing is at full capacity, the manufacturing sector also contributes significantly to GDP as per NSA release. This means that we need to invest in manufacturing. It is important to note that the manufacturing sector also plays an important role by providing a key link between producers of raw materials and consumers of the manufactured products, thereby situating the sector to play a decisive role in determining the extent to which an economy can be self-sustained. Therefore, the manufacturing sector can also be regarded as the avenue through which transform itself from being a producer and exporter of primary agricultural. It also calls for measures to make it easier to import scarce skills by streamlining the work permit and visa system. This will be accompanied by a skills transfer programme to ensure that local skills development is enhanced. Government calls for greater focus by Namibian business on opportunities in fast-growing economies.

Moreover, we cannot oversight agricultural sectors. In one accord, as agriculture becomes more productive, excess labor moves from rural farm jobs to urban manufacturing jobs. While the result of this stage is a decreased share of agriculture to GDP and the labor force, the process of agricultural modernization is critical for economic transformation and achieving food security. Engaging youth in agriculture has been a prominent topic and has risen up the development agenda, as there is growing concern worldwide that young people have become disenchanted with agriculture. Despite the decline in interest for agriculture as a career there are still young farmers working all over the world. To encourage others to join the sector it is vital that they are offered a voice, and that take note of what they have to say. Particularly this includes giving young farmers at policy level a chance to offer their opinion and experiences. In this way, they can show other young people that farming can be a rewarding career as well as highlighting the important role of agriculture on a global scale. Agriculture is a mainly key for the development through local level or regional level. As we know that most of the people around the world often depend to the agriculture production and agriculture production has feeds the worlds by youth farmers worker so we’ll need to set up a potential program to the youth farming to guarantee for the future.

Namibia’s industrial ambition is articulated in Vision 2030, which stipulates that the country should be an industrialized nation with a high income by the year 2030. Namibia to achieve V2030, a robotic cognation factors that hinder greater participation by new firms in the economy, such as the existence regulations and policies that support incumbents or are ineffective in assisting rivals and new firms; competition legislation that favours large firms and incumbents; and access to finance challenges. Change in economic relations must be the creation of opportunities for all Namibians to live productive, prosperous, and dignified lives. Current trade and industrial policies have made some progress towards attaining economic and structural transformation and contributing to inclusive growth. Namibia’s industrial policy is on the right track, but some important adjustments could significantly improve its effectiveness. There is a need to first evaluate the land reform and focus on the return of production or increase of production on the farms before embarking on further indigenization in other sectors. The big problem that the government faces is unemployment. Therefore, industrial and trade policy interventions cannot effectively achieve their desired outcomes if they are not complemented by an overall supportive business environment. For this reason, Namibia needs to shift its focus towards increasingly attractive regional growth opportunities, which hold significant potential to increase intra-regional exports and foster growth and economic development in the region.

In conclusion, the aims to review the manufacturing sector by identifying key structural bottlenecks, highlighting their implications, explore recent government interventions and proffer workable policy interventions. Namibia needs such investment to clear the backlog of unemployed. This therefore shows that although the government is expected to play a role in boosting the sector, the private sector has to play the larger part by remaining conscious to the market needs and responding to it through innovation and strategizing. This calls for the need to embrace new technologies as required by the dynamic manufacturing environment.

Therefore, neglect of the agricultural sector, and a call to revive the economy through huge concentration on agriculture is motivated to turn the economy to a large production base. In addition to this, such effort would stimulate the performance of other notable sectors like manufacturing and solid mineral.

This would be an avenue to integrate the manufacturing sector as it would equally be empowered through provision of needed raw materials which in long run foster forward and backward linkages.

2022-10-04  Josef Kefas Sheehama

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