Nam still to diversify market share for local products
Namibian Chamber of Commerce and Industry (NCCI) Chief Executive Officer
A recent batch of statistics released by the Ministry of Trade and Industry shows that Namibia has not managed to diversify its market for locally produced products and is making little inroads into the Southern African Development Community (Sadc) region.
Namibia’s total exports to the rest of the Sadc went down marginally from the N$18.812b in 2009 to N$15.084b in 2010.
However, there is still significant levels of trade between Namibia and the rest of the world with the bulk of products from this country (beef, horticultural and agricultural products and mining products) finding their way to that part of the world.
The statistics also show that imports by the country from the rest of the region swelled up by a margin slightly above a billion dollar accumulating from N$29.565 in 2009 to N$30.395b in 2010.
The biggest trading partner for Namibia in the Sadc region remains South Africa which has exported more than N$29b worth of goods to Namibia while Namibia in return has made about N$11.018b from their total exports to South Africa.
Regional and international business expert and analyst, Willie Roux, concurred with the findings noting that business links between Namibia and the Sadc region have not been significant enough in the past few years.
Roux added that Namibia has only managed to broaden its market base with Zimbabwe because of the bilateral agreements between the two countries.
“There have been new agreements with the Democratic Republic of Congo and it is also important to note that not all Sadc countries are part of the FTA. That's because it is not legally enforceable because there are inadequate transport infrastructures between the Sadc countries. Since the inception of the FTA, there has been no real improvement in the borders when it comes to goods clearance procedures. In reality, these procedures have become more cumbersome. There is still no harmonisation of, and cooperation between the customs authorities of the participating Sadc countries,” said Roux.
He added that the reason behind the little improvement between Sadc and other countries is that the level of value-addition and diversification of products is very minimum in the regional countries.
“Apart from the above impediments, little or no value-addition takes place in Namibia. Hence, the country is not geared to serve export markets effectively. The same applies to Namibia’s main traditional exports.
“Article 38.2 of the Southern African Customs Union (Sacu) 2002 Agreement states that the member States agree to develop common policies and strategies with respect to industrial development. This process is currently in full swing to develop a common Industrial Development Policy for Sacu. One of the aspects that should be included is the principle of the European Airbus Model, which includes the outsourcing of production capacity while sharing in the development of the region.
"The same principles were reiterated during the recent Tralac Annual Conference in Cape Town (08/09 September 2011) by the keynote speaker Chief Economist at the World Trade Organisation (WTO), Patrick Low. He mentioned that “production networks foster deeper regional integration”, with special reference to 'cross-border complementarities'. He used the 'production sharing in parts and components trade' as an example to illustrate the point,” said Roux.
Meanwhile, Namibian Chamber of Commerce and Industry (NCCI) Chief Executive Officer, Tarah Shaanika, said there is a lot to be done before the Sadc market matures and produces the same prices for goods as produced elsewhere in the world.
He added that it is also not advisable for Namibia to trim down its market on Sadc and the European Union alone and called for the country’s business people to start exploiting other growing markets including Asian giants like China, Japan Indonesia and Malaysia.
“We need to have sufficient political will from the Sadc member countries to remove non tariff barriers because there are a number of payments that still needs to be made at the border and this increase the cost of doing business. The second challenge is that the supply side of things needs to be sorted out in Sadc. We do not have manufactured products in Sadc and we do not produce much of that. Sadc has no capacity to consume the raw materials for processing. It will take time for inter-Sadc trade to take its toll and with little industrialisation it will be very difficult,” said Shaanika.