The Development Bank of Namibia (DBN) has lived up to its contractual agreement signed last year to be a financial pillar to the manufacturing sector through the Namibia Manufacturers Association (NMA) with an N$37million loan to three organisations.
The agreement that was signed is specifically geared to identify opportunities to promote development in manufacturing, primarily through financing of Namibian enterprises that are members of the NMA the Villager found.
The spokesperson of the DBN, Di-Anna Grobler revealed that the bank is looking to fund more manufactures.
“We are currently working on three more transactions with total loan value of N$70 million. The Development Bank’s positive experience of providing finance for manufacturing shows that there is demand for locally manufactured products” Grobler said.
She further noted that in addition to direct finance for expansion, the bank could also entertain applications for financing of management buy-ins and other shareholding in order to increase capital availability for manufacturing expansion.
Industries that have been funded are food products and fabricated metals, with meat production, plastic products and energy industries to receive funding later in the year.
The Villager found that manufacturers face many challenges, especially when it comes to transporting of their products despite various initiatives, such as the listing agreement between the NMA and retailers. Currently local manufacturers have to go through a lot of red tape being posted from one office to the other.
The Chief Executive Officer of NMA, Ronnie Varkevisser explained that the association approached various stakeholder for funding of manufacturing industries.
“The agreements will have positive effects on the manufacturing sector and the economy as a whole with every Namibian standing to benefit from them. The NMA approached various stakeholders to develop memorandum of understanding though still in their draft phases and being negotiated on if signed we will not only help the Namibian economy, but also help the NMA gain leverage to address issues faced by manufacturers,” Varkevisser said.
He added that if this is achieved, the manufacturing industry stands to grow from creating 3 500 to close to 10 000 jobs in the next two to five years, enhance local supply side capacity; and better coordinate and collaborate between all role-players in the economy including public-private dialogue are also some of the initiative’s aims.
Local manufacturing enhances the Namibian supply chain by making use of local raw materials, providing the security implicit in local suppliers, warding against currency fluctuations entailed in imports and by creating economies in transport and logistics.
Manufacturing sector is identified as a key sector in the Harambee Prosperity Plan (HPP), and is one of the core components of DBN financing priorities, alongside transport and logistics, and tourism.
DBN also views manufacturing as a critical link in developing mass employment, and a route to development of a pool of skills that will not only serve the individual manufacturer, but the country in its entirety.
However the NMA is viewed as extremely beneficial as there are plenty of opportunities for growth and expansion of existing manufacturing enterprises in the country.
A key strategy in terms of economic development has to be the systematic promotion of manufacturing. This needs to be embedded in a regional strategy to establish value addition and value chains in Southern Africa. The starting point has to be the beneficiation of local raw materials as well as the promotion of local suppliers to meet consumer demands for food, clothing, furniture and other basic goods The Villager learnt.