• May 29th, 2020

Why the Peugeot deal is a steal

The historic opening of the first ever car assembly plant in Namibia this week signified a rare sense of national victory.
Throughout the years, the country has struggled to pull in high-tech foreign direct investment – a situation exacerbated by mostly our microscoping population.
Though armed with political stability, good infrastructure and good policies, the country has had difficulties convincing multinationals to set up shop here.   
Against this background of trial and error, the country had to re-think its strategy to appetise investors.
For years, there have been deliberate efforts to make Walvis Bay a gateway to more than just mainland Namibia, but also an entry point to Southern Africa, a market of 330 million people.

With multi-million dollar upgrades of the Walvis port, the country has been making inroads insofar as raking in investment is concerned, and the Peugeot Opel Assembly Plant inaugurated this week could just be a hint of greater things to come.

Apart from attracting the attention of a huge investor as Peugeot’s parent company, Groupe PSA, we were pleased to hear that of the 50 employees at the plant, only five were foreigners.

But the real steal – as far as we are concerned – is that this is a joint venture that is nearly owned in half by Namibia, through state-owned Namibian Development Corporation (NDC).

This is a paradigm shift and radical departure from the archaic model that saw multinationals solely owning everything when they came to Namibia.
This approach, which remains alive and well in our country, is particularly rife in our key industries such as mining where, apart from diamonds, everything else is almost wholly foreign owned.

Apart from taxes and royalties, the country has not been able to share in the actual billion-dollar profits accrued from exploiting our resources.
The Peugeot deal’s benefits are multifaceted. First, it is a high-tech investment that, from a marketing and public relations perspective, paints Namibia as a rising star investment destination.

This is particularly so in the sense that the majority of vehicles assembled at our west coast would be exported to other markets – showing therefore that the population of Namibia can no longer be a factor in not attracting investment.
Second, the provision of direct and indirect jobs for the locals – some in critical areas of technology – is a huge plus for our country. This includes skills transfer to our people.

Third, is the earlier point that this time Namibia would no longer just rely on taxes from this joint venture, but could actually share in the profits made by the company, news that should excite both treasury and indeed the general populace. Fourth, the deal ushers in a new precedent of negotiating investment in which we own a stake, departing from the backward approach of not owning stakes in companies doing business here.
This deal reminds of us the four farms that government, after witty negotiations, got for free of charge from Russian investors.
We believe the farms deal is the most misunderstood in the country, hence the loud noises of dissent.

Government, without putting a cent on the table, owns those farms 100 percent, thanks to tough negotiations that ensured the massive land did not remain in the hands of previously advantaged private hands.

This should be our modus operandi going forward. Let the state partner with private investors in various industries in order to accrue financial benefits and perhaps help contain individual taxes.
After all, the public-private-partnership chorus, which is about to become a law soon, speaks to this very notion.

Staff Reporter
2018-12-07 10:18:04 | 1 years ago

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