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Private, public sector rat-race bleeds industrialisation vision

Fri, 25 August 2017 19:47
by Kelvin Chiringa
News

A lack of strong policy interventions by government and apathy to invest in the secondary sector by private companies have severely bled the country’s industrialisation agenda.

Growth in industries has been stunted for the past 27 years, and the outgoing Minister of Finance Calle Schlettwein has admitted that the private sector has shunned value addition and instead has opted to throw money in the tertiary and extractive sectors. 

At a recent engagement with journalists, the minister seemed to have admitted that the country’s private sector had aborted the industrialisation agenda while government, on the other hand, has not been decisive on Vision 2030.

“The private sector remains active in the tertiary sector and the primary sector. The secondary sector did not enjoy the growth that would be needed to change that ratio. “Our job, growth and trading potential lie in our ability to produce finished goods and trade with them. It lies in the potential of adding value to our raw materials and improving our share of value in the value chain,” the minister said in the presence of members of the media.

Schlettwein admitted that the best way to kickstart the country’s industrial engines would be for private money to complement public funds.

“We are still maintaining the policy of private sector led growth, but we are adding to that. It is not (only) independent private sector led growth, we the public sector because of our 60% weight in the economy must ourselves become active in the productive sector and do what the private sector for the past 27 years could not do. And that accelerates a number and value of start-ups,” Schlettwein said.

The industrialisation vision has received the nod of the entirety of the SADC region yet barriers to trade still reign supreme which has put the regional members’ seriousness to attain the industrialisation goal to question.

Calle repeated the almost utopic industrialisation vision which, since the independence of Namibia and that of its former regional partners has failed to take off due to conflicts of interest and a lack of following up on what is on paper.

“We have agreed in SACU and SADC that industrialisation is the way to go,” said Schlettwein. Sadly Namibia is yet to optimally enjoy the robust creation of regional value chains in which the economy competes with other economies in the region. This has also seen a failure to, as Schlettwein said, “Complement each other’s ability to improve productive capacity.”

However, in the presence of a regional policy framework on the need to grow industries, Schlettwein said, “What needs to be done is to improve our ease of doing business, our ability to smooth out unnecessary barriers to enable the private sector to react more competitively.”

On the other hand, the government has been, in the last 27 years, found wanting when it comes to capacitating startups in the secondary sector, and Schlettwein is of the mind that this needs to be looked into. “We also believe that the model where the government is limited to create an environment and cannot intervene as a supporter of startups or the creator of productive capacity needs to be read dressed,” he said.

He added that “We also believe that there is a role for the public sector to play as an accelerator of startups. Instead of only subsidising, it should get engaged through creating this capacity.”

 “That is why we have changed the legal framework; we have now created the Namibian Industrial Relations Development Agency that is the vehicle through which we want to intervene. We have our development finance institutions, the Development Bank, Agribank, they have received our directive in which sectors to get involved in, and it is the productive sector which they must make a priority,” put in the Minister.

 Meanwhile, the elephant in the room is that the country is only left with just thirteen years to reach its industrialisation benchmark and current signs are that Vision 2030 might just be a chase after the winds. However, this is a verdict which the Industrialisation Ministry and the National Planning Commission Ministry continue to deny as they hold that the stimulant to industrial growth is Foreign Direct Investment, PPPs and a combined national effort.