New_Era_Business_Article1_2016

The three pillars of Industrialisation in Namibia - Market Access, Industrial Development
and Infrastructure Development
Structural transformation of the Namibian economy is based on 3main pillars namely; Market
access, industrial development and infrastructure development. Market access pillar has two
components; market access at home and market access abroad. Market access at home will
be achieved through the adoption and implementation of the RetailCharter Policy framework
while market access abroad is realised through international trade agreements. Namibia’s
international trade arrangements include SACU, SADC Free Trade Area, EPA (economic
partnership with the European Union), EFTA (Norway beef market) and the on-going
Tripartite Free Trade Area negotiations (to combine COMESA-EAC-SADC into an FTA). In
principle, this means that Namibia’s 2.4 million economy has access to a larger market for its
goods and services.
But of course, in order for Namibia to fully utilise domestic and international market access
opportunities; it should have a diversified industrial base economy driven by the
manufacturing sector. This is of course prioritised in the National Development Goals.
Namibia’s strategy to industrialise is mapped out in the Growth at home document which is
endorsed by cabinet, making it a national document. In this document, the country maps out
potential sectors where Namibia’s comparative advantages lies and prioritise such sectors as
low hanging fruits for industrialisation.
In the 21st century where trade is driven by the services sector, the industrial development
pillar calls for a new way of thinking and doing things especially in terms of policy formulation
and implementation which should be coupled with a strong monitoring mechanism.
Recognising that presently, Namibia has a very narrow manufacturing base dominated
primarily by agro-processed products, the growth at home strategy therefore calls for a
diversified economy through value addition activities/processes. However, due to the lack of
economies of scale facing many Namibian manufacturers, an innovative approach such as
focusing on niche markets should be considered in order to make the growth at home strategy
impactful. For example, the export of Namibian beef to international markets such as the EU
and Norway is only successful or competitive because the focus is on niche markets.
Otherwise, Namibia will never be able to compete with large beef producers such as Brazil
and Australia. But then of course we have successful companies such as Namibia Breweries

which managed to drive Namibia’s exports for beverages in regional and international
markets even though most of its raw materials are imported.
How did they do this?
The answer is innovation. Innovation is linked to technology and technology is viable or
effective where there is a strong research and development element. The industrialisation
agenda should prioritise innovation as the main enabler or driver. Namibia remains one of
many African countries which is not deriving the highest value in the value addition process
because research and development is an overlooked component by policymakers. Many
manufacturers in Namibia especially SMEs are still struggling with product development due
to lack of applied research and development. Branding, design and marketing are other
elements which are very crucial in driving the manufacturing sector. We all know that
products such as Coca Cola, All Gold Tomato Sauce or even Windhoek Larger are successful
today because of branding, design and marketing.
Some prioritised sectors under the ‘Growth at Home’ such as Pharmaceutical and Cosmetics
sector, calls for Namibia to add value to indigenous plants in order to producer medicine
and/or cosmetic products. Namibia is home to some amazing medicinal plants such as Devil’s
Claw, Marula trees,!Nara plants etc so it only make sense.
However, the only way to stimulate production in manufacturing in the pharmaceutical and
cosmetics industry is through innovation, usage of technology, research and development.
Otherwise, Namibia will continue extracting the raw materials from these plants to export
them outside for other countries to add value to them and re-export the finished product
back for final consumption as it is the case with Devil’s claw tea imported from Germany and
Body Shop cosmetics which uses Namibia’s Marula oil as part of their ingredients in their
cosmetics products.
Essentially, products made from indigenous plants attract high value in the world market due
to the medicinal organic properties which comes with it. And with the world demanding clean
or organic alternative remedies for their many health anomalies, Namibia has the potential
to play a vital role in this industry and it should prioritise this sector.

The other very important component to make the pharmaceutical and cosmetic industry a
reality is the issue of ownership through intellectual property rights, patents and trademarks.
In order to keep the ownership in the hands of Namibian’s, the industrialisation strategy
should include a human development strategy to allow complete ownership of the
manufactured products to Namibians though intellectual property and patent rights. This
industry should therefore be promoted by MITSD as per the growth at home strategy in close
collaboration with higher learning institutions such as Unam and NUST. One can start by
creating an attractive research facility which allows students to conduct their final year
research in pharmaceutical and cosmetics in Namibia with the hope of turning their findings
into viable businesses.
So what about infrastructure development? Probably the most significant element of what it
means to be an industrialised economy. Infrastructure both soft and hard are key to the
transformation of the Namibian economy. Firstly, distribution as a component of
manufacturing requires efficient infrastructure system such as roads and railways. With
Namibia’s railway system being very inefficient, road transport cost has become very high in
the country and this has also contributed to the high cost of living in the country as it is
presently. Imagine an SME manufacturer based in Windhoek which needs to distribute its
product countrywide to gain a larger market. Without an efficient railway system, road
transport costwill remain one of the major hindrances to industrialisation.However, the good
news is that Namibia has been developing itself into a logistics hub to serve mainly the
southern Africa region. Namibia’s geographical location gives it a comparative advantage to
become the port of entry for landlocked countries such as Botswana and Zambia to move
trade. However, this is not only limited to the development of road infrastructures through
the corridors but also to have an efficient border management system. A European company
will make its decision to export goods to Zambia through Namibia only if Namibia’s
infrastructure systems are efficient when compared to its competitors such as South Africa
and Mozambique. So the completion of single window or one-stop border systems are part
and parcel of making Namibia a regional logistics hub.
Industrialisation agenda should therefore not only be viewed as the Ministry of
Industrialisation, Trade and SME Development (MITSD) responsibility alone, but as a national
responsibility which requires synergies and linkages amongst all ministries and government

agencies who have a national responsibility of delivering national projects to improve the
livelihoods of Namibians. Industrialisation agenda provides for business opportunities as well
as investment opportunities for Namibians and it should be promoted in that manner as it
becomes one of the very important route for employment creation and wealth redistribution
and consequently poverty eradication.
For example, a business person in Okongo who wants to build a dam to get into aquaculture
farming should receive support from both ministries of industrialisation to cover the
trade/business aspect, ministry of fisheries to promote fishing activities in the country and
ministry of agriculture for food security purposes. Hence, an aquaculture projects in rural
area should be promoted in the context of industrialisation. The ministry of fisheries cannot
promote aquaculture farming in the country without linking it to the industrialisation agenda
and the ministry of Agriculture cannot also promote food security without linking it to
manufacturing. The same applies to other developmental projects under other ministries.
By: Maria Lisa Immanuel
Senior Trade & Investment Policy Analyst
Namibia Trade Forum

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