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Untapped potential for automotive industry

2021-03-31  Maihapa Ndjavera

Untapped potential for automotive industry
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The Namibian government says it recognises the importance of developing a fully-fledged automotive assembly industry to help boost the local economy. 

Last week, industrialisation minister Lucia Iipumbu, on the occasion of the national automotive assembly development policy framework (NAADP) 2019-2021, said the development aims to optimise contribution to the gross domestic product (GDP), employment creation, technology transfer, value addition, fostering of backward and forward linkages and the immersion of micro, small and medium enterprises (MSMEs).

Iipumbu noted that Namibia currently has a promising motor assembly sector whilst the sector policy development is not fully optimised.

Regionally, the sector major anchor programme, the automotive production development programme (APDP) is set to end in 2021 – and according to her, it could accentuate the policy vacuum more markedly. The Namibian masterplan is to be finalised at the end of 2021.

The NAADP framework (2019-2021) is, therefore, designed as a measure to provide adequate transitory policy provisions in terms of promoting and sustaining investment in local assembly and component manufacturing.

NAADP also aims to promote the exportation of locally produced or assembled motor vehicles as well as increasing the capacity utilisation of automotive assembles.

She added that NAADP promotes the utilisation of locally and regionally available inputs to ensure that Namibia and the rest of the region increase local content in locally assembled vehicles.

“NAADP provides policy consistency and predictability in terms of its provision for the development of a comprehensive automotive industry masterplan. The masterplan is intended to ensure that the policy vacuum that could result due to the expiration of the APDP is duly negated for the Namibian automotive assembly sector,” explained the trade minister.

Industrialisation ministry deputy executive director Michael Humavindu said the NAADP framework aims to encourage both domestic and foreign direct investment (DDI and FDI) in the sector (both automotive assembling and components manufacturing).

Furthermore, the framework covers both short-term, medium and long-term measures to support the nascent automotive assembly industry. In the immediate short-term, the focus is on ensuring the targeted beneficiaries benefit from immediate rebates within the SACU Agreement. It is, therefore, expected that the exportation of vehicles will thereafter resume seamlessly.

In the medium term, Humavindu explained, a two-pronged approach is to be undertaken first to develop mechanisms whereby derogation is allowed for a specific time. Secondly, finalisation of the work and incentives package around the special economic zones (SEZ) would form part of the medium strategy and this is expected to be completed within the 2021 calendar year.

In the long term, the ministry will develop a comprehensive automotive sector development masterplan to dovetail with the expiration of the APDP in 2021 (phase 1).

- mndjavera@nepc.com.na


2021-03-31  Maihapa Ndjavera

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