The plan to establish a fully economically integrated region is sailing on a rocky path while Namibia struggles to improve its competitiveness in regional and global trade despite some achievements towards dismantling geopolitical barriers, ﬁnance minister Calle Schlettwein has indicated.
Speaking at the Economic Association of Namibia’s annual conference recently, the minister said while SACU is the departure point towards regional integration, Namibia’s opportunities through regional integration can only be fully optimized if it commences production of ﬁnished goods.
“It is in regional integration that a small open economy such as Namibia has opportunities to reap beneﬁts which are greater than the sum of the individual parts. We need an improved productive capacity for ﬁnished goods as well as high quality services being available for exports. If we do not have ﬁnished goods or high quality services to trade within the ﬁrst place, integration brings about less beneﬁts,” he said.
However, Namibia ﬁnds itself mired in a sad reality where most of the required high level services especially in the ICT, health and education sector have to be outsourced from South Africa or other countries.
Calle said Namibia stands to beneﬁt further if it remains strategically wedged between Africa’s ﬁrst and second largest economies, South Africa ad Angola respectively.
Yet the beneﬁts of such a strategic positioning in the short term remains distant as South Africa is currently immersed in recession with a junk sovereign rating while Angola’s inﬂation was at 42 percent as of December 31 2016 and 74 percent as of May 2017.
“Angola is facing difﬁcult times. As of 2010, Namibia was not part of our top export countries. Our public debt is over 70 percent of GDP,” lamented Francisco Paula, researcher at the Catholic University of Angola.
Although Angolans have invested over US$200 billion abroad in the last 14 years, the current oil-induced economic decline has meant less and less spending in the Namibian economy.
One of the major stumbling blocks to regional integration has been the fact that SADC countries produce relatively the same raw-materials while liberalisation of trade has the potential to affect the country’s revenue ﬂ ow via tariffs.
“Namibia will not lose too much revenue because trade in the region is manageable. We have an export potential and neighboring countries are fast becoming our biggest markets,” disputed Namibia Trade Forum (NTF) Chief Executive `Ofﬁcer (CEO) Ndiitah Nghipondoka-Robiati.
She instead stressed that Namibia’s opportunities lie in its ability to ensure that the trade policy infrastructure is reﬁned and responsive to the needs of the private sector.
To that end, Schlettwein afﬁrmed that Namibia’s national agendas have to be set up in such a manner that they advance regional inclusivity in the trade of goods and services.
He said, “There are prerequisites for successful regional integration, we have to have peace and stability, we have to maintain macro-economic stability but we must also at the same time maintain prospects for meaningful inclusive growth and a fair society. What we do at home is at the core of how meaningful regional integration at the end will be.”
With Namibia’s population being youthful, Executive Director for the Trade Law Centre at Stellenbosch Trudi Hartzenberg said Namibia and its neighbours have the onus to come up with a regional integration plan that is all-inclusive and bring opportunities for young people.
“We need a new generation trade agenda, a large proportion of GDP is in the services sector and we must leverage on the youth dividend,” she said.
Hanns Seidel Foundation Representative Dr. Wolf Krug has lamented Namibia’s visa regime as countering the integration vision and coming as an impediment to the ﬂ ow of Foreign Direct Investment (FDI).
“Namibia is ranked third in trade integration its ﬁnance and microeconomic integration but there are still areas that need to be improved. It is very difﬁcult for business people especially from South Africa to get into the country or get visas. I have heard so many complaints from German investors who arrive here only to be demanded for visas and having to be turned back. I think if you would liberalise your visa regime for investors, I mean, come on, they are just here to invest,
He said his organisation had to move away some of its conferences to South Africa, “because they do not need visas for our guests.”
Meanwhile, whether achievements made in integrating regional economies have been felt at the grassroots level or not, is an ongoing debate although Calle said for Namibia poverty levels have seen a signiﬁcant reduction.