By: Nghiinomenwa Erastus
A top official in the trade ministry says Namibia needs to revisit the trade agreements it has entered into in the past to ensure they conform to the country’s current growth aspirations and ambitions.
Michael Humavindu, who is the deputy executive director for the Industrial Development Department in the Ministry of Industrialisation and Trade (MIT), says the country’s experience with the Peugeot-Opel Assembly Plant (POAN) under the Sacu-automotive programme highlights the country’s need to review its existing agreements.
The assembling plant idea started in 2015, then the government through trade ministry worked out an incentive package that was tabled in Cabinet for approval in 2016 with ultimate determination in 2017.
Work on setting up the plant started in December 2018 and President Hage Geingob lunched the project thereafter.
The first cars assembled were sent through the borders to the off-taker, Peugeot, and Opel South Africa, but it was discovered later that there was a policy problem from the earlier signed trade agreements.
“An assembled automotive product here will attract an additional duty of 18%,” the trade ministry revealed.
The ministry set off course to work around the policy problem, which was signed back then.
The automotive programme in Sacu started in 1994 with the Motor Industry Development Programme (MIDP) and was replaced by the Automotive Production and Development Programme (APDP).
Humavindu says Namibia’s overall experience with POAN and the subsequent policy development has highlighted the need for the country to continuously assess trade agreements and their impact on the country’s industrialisation ambitions.
“These are programmes that ensure incentives to develop SACU member states’ auto sector,” Humavindu explained.
However, according to Humavindu, Namibia never domesticated these programmes and by the time the country got the Peugeot opportunity ‘we had to start developing policy finally’.
In December 2019, the Cabinet approved the Namibian Automotive Assembly and Development Policy (APDP).
The trade ministry then spent the July 2020-July 2021 period developing a Namibian version of the APDP which was finally approved by the Cabinet.
“We now expect gazetting the Namibia APDP by 10 September and that should open the door for POAN to apply at customs to export their cars seamlessly to their off-taker in South Africa,” he revealed.
Thereafter POAN can duly apply to the National Customs Office for exemption of the 18% duty.
The ministry has also noted that the solution is not only the Peugeot plant but a national solution and not for one business entity.
Humavindu also updated The Villager that by next year the ministry will introduce an Auto Sector Master Plan.
South Africa has finalised their policy and they are busy tweaking their APDP, while Namibia is aiming to get at par with its policy.
The POAN assembly plant is able to produce up to 5 000 vehicles per annum.
The ministry has also indicated that when demand presents itself, the plant can scale up production to more than 10,000 per annum.
130 CARS ON THE FLOOR
The ministry update indicates that there are around 130 cars on the production floor at POAN at the moment.
“We have managed to sell some through various public entities such as ministries and SoEs,” the update revealed.
Under Sacu provisions, public entities are eligible for some general duty exemptions right away which then opens the door for sales whilst the trade ministry is working on gazetting the domesticated APDP.
“So for now Public Entities are eligible to buy and I urge all of them to please consider buying the vehicles,” the trade ministry begs.
Secondly, once the ministry gazettes the policy, POAN will be able to then export the vehicles.
This will then also speak to their local sales and the company will make an appropriate announcement at that time.
“It will go a long way to ensure the creation and sustenance of the local economy around the automotive sector, jobs, and economic dynamism,” said the trade ministry further said.
The ministry of trade also indicated that they are open to help in acquiring the vehicles. Email: gerastus16@gmail.com
