• December 5th, 2020

Opinion - Namibia should stop its economic reliance on SA

On Saturday, 21 March 2020, Namibians from all walks of life cerebrated 30 years of self rule. This came as a result of the military liberation struggle which was waged by chauvinistic Namibians some 58 years ago over the South African military colonial army in order to bring the apartheid government and its colonial principles to an end. As a result of resilience and determination by Namibian men and women to fight all forms of injustices which were perpetrated by the colonial regime, Namibia got its political independence on the 21st of March 1990. Consequently, this marked the official end of colonialism in the land of the brave. South West Africa People’s Organization (Swapo) was thus elected as the first black political party to govern the new republic founded on the principles of democracy.

To get running, despite the notable achievements the Swapo party government has realized for the past three decades such as infrastructure development, Namibia still imports the bulk of its food commodities, petroleum products, machinery, equipment, chemicals, medication, expertise and many more from South Africa. Affirmatively, notable capital projects achievements under Swapo party government includes the completion of the Trans-Caprivi Highway and the Trans-Kalahari Highway road projects which were completed in the late 1990s, that links Namibia with Zambia, Zimbabwe, Democratic Republic of Congo; the Trans-Kalahari links Namibia to Botswana and South Africa’s industrial hub (Gauteng); the Trans-Kunene Corridor that links Namibia to Angola and the Democratic Republic of Congo via the port of Walvis Bay. Moreover, Namibia shipping lines were established in 1992 under the transport holding company Trans-Namib in a joint venture with South Africa’s Unicorn line. The Namibia Port Authority in 1996 launched a four-year plan to modernize and extend the facilities at Walvis Bay and Lüderitz, which is currently handling merchandise imports and exports and servicing the fishing industry. Equally important, Namibia has one of the most modern postal and telecommunication infrastructures in Africa linked directly to most countries in the world. Furthermore, the Roads Authority recently announced that Namibia was once again accorded top position for having the best roads in Africa by the World Economic Forum (WEF).

Despite all of the above, Namibia spent N$52.9 billion on imports from neighbouring South Africa in 2015, up from N$49.2 billion in 2014. Big cost items imported into the country from South Africa in 2015 included vehicles, aircraft and vessels at a cost of N$9 billion. Prepared foodstuffs worth N$5.8 billion entered Namibia in 2015, an increase from the N$5.1 billion in 2014, with chemicals worth N$5 billion also being imported. Iron and steel products valued at N$4.8 billion were acquired from South Africa, a further increase from the N$4.5 billion. Namibians just love their vegetables, with N$1.8 billion worth being brought into the country, an increase from the N$1.7 billion imported in 2014. In 2015, the love for fun and games saw N$1.6 billion worth of toys and sports apparel being imported into the country from South Africa, an increase from N$1.5 billion in 2014 (Windhoek Observer, 2016).

In comparison, the South African Revenue Service (2016) reported that South Africa only imported goods worth N$6.5 billion from Namibia in 2015, a marginal increase from the N$6.3 billion in 2014. Namibia’s biggest export in 2015, according to the South African Revenue Service (SARS) figures, was live animals, which generated N$3 billion in export revenues for the country, a 39.23 percent increase from the N$2.1 billion in 2014. Prepared foodstuffs valued at N$1.3 billion were exported by Namibia to South Africa in 2015, a decrease from the 2014 figure of N$1.5 billion. Namibia additionally imported food commodities at the value of N$4 billion in 2004, and rose to N$7.3 billion in 2014 (New Era, 2015). Additionally, during the 2017/2018 financial year, Namibia imported an astronomical 96% of its fruits, 96% of wheat, 60% of pearl millet and 40% of white maize from South Africa in order to satisfy the local market (The Namibian, 2019). During the 2018/2019 financial year, Namibia spent N$17.38 billion on imports of high-value manufactured commodities from South Africa (Erastus, 2019).

Therefore, statistics thereon show that Namibia heavily depends on South Africa for its economic survival. The contemporary, deadly coronavirus which is tormenting the whole world and has affected all kinds of economic activities, including social activities around the world, is affecting Namibia horribly. 
The coronavirus pandemic has showed how weak Namibia is as a country in terms of economic activities. Furthermore, Namibia’s over-reliance on South Africa showed its ugly side when xenophobia erupted nearly a year ago, which partially affected the importation of goods and services in our country. Recently, the Minister of Agriculture, Water and Land Reform Calle Schlettwein slammed South Africa for a medical supplies ban because of the decision which was taken by several countries to institute bans on the exports of crucial medical supplies. 

Namibia’s economic parent neighbour, South Africa, banned exports of face masks and alcohol-based hand sanitizers including foreign sale of hydroxychloroquine, a drug widely believed by countries such as the United States of America to have the potential to treat coronavirus.In order to reduce economic reliance on South Africa, the government should consider the following to mitigate the situation:
Taxes and quotas – the Namibian government should decrease excessive import activity by imposing tariffs and quotas on imports. High tariffs make importing goods and services more expensive than purchasing them domestically. This will as well improve the balance of trade of our country.
Subsidies – Governments around the world provide subsidies to domestic businesses in order to reduce their business costs. This helps bring down the price of domestic goods and services, hopefully, encouraging consumers to buy domestic rather than imported goods. By enabling domestic producers to produce goods less expensively and, thus, lower their prices, subsidies may also increase exports as the cheaper goods become more attractive to foreign buyers.
Currency devaluation – Most governments devalue their currency with the aim of bringing down the prices of domestic goods and services, the ultimate goal being to increase net exports. The currency devaluation also makes purchasing from other countries more expensive, thus discouraging imports. Sadly, the Namibian currency is still pegged to the South Africa rand. So technically they are in charge of our economy.

Set up manufacturing industries – It’s very shameful that, after 30 years of self rule, Namibia with a population of less than 4 million and which stands as one of the richest African states, still depends heavily on foreign countries such as South Africa for its food, medical, manufactured goods and the list goes on. Millions of monies have gone missing in the name of patronage politics and systematic corruption. Despite the ongoing economic recession Namibia finds itself in due to lower commodity prices globally and the negative impact of coronavirus on economic activities, the central government should fund more industrial hubs to promote the manufacturing sector.

In the final analysis, it is time Namibia learns from this global contemporary crisis which has affected economic growth globally. Namibia should produce what it consumes rather than rely heavily on imports. Despite all the challenges we face as a nation, Namibia should re-engineer and think about our collective national interests irrespective of party politics, ethnicity, race, and religious affiliations, as for these reasons, the interest of our country must come first.

Staff Reporter
2020-09-25 10:39:32 | 2 months ago

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