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By: Josef Kefas Sheehama
Namibia Statistics Agency (NSA) released the Gross Domestic Product (GDP) results for the second quarter of 2022 at a media briefing held on 28 September 2022, Karas region.
In 2022 the Gross Domestic Product (GDP) increased by 5.6% during the second quarter. The most significant contributors to growth in GDP in the second quarter were manufacturing, accounting for 12.1%, wholesale and retail trade for 10.2% and agriculture, 10%.
According to NSA, the Namibia economy grew by N$5.4 billion compared to the N$43.2 billion recorded in the previous quarter of 2021. The main contributor to the GDP growth of 5.6% during the quarter under review was the mining and quarrying sector contributed 2.6% to the GDP growth, followed by financial services with 1.1%.
The domestic economy expanded to N$48.6 billion in the second quarter of 2022.
As the recovery in the economy continues, the risk of sector-specific tightening measures or removal of accommodation is growing. Therefore, we need to protect and grow our manufacturing industries by funding them, placing huge taxes and levies on imported goods, creating policies that would encourage more production and getting our infrastructure up to date.
Namibia succeeded in reinserting its economy back into world trade in 1995. Following a long period of political difficulties and international reactions to the apartheid regime since early 1995, successive Namibia government has faced significant economic policy challenges to change the institutional structure of the economy and adapt the trade policy regime to the new agenda and structures.
Manufacturing has generally been described and accepted as a catalyst for economic growth and development all over the world, industrialization under the industrial sector is widely conceived as a critical tool for accelerating economic growth and development.
Namibia needs to implement reforms that will open up and attract investments into key subsectors within the manufacturing and agro-processing sector, thus, creating opportunities along value chains. Macroeconomic stability, good governance and infrastructure provision are supporting factors that will improve productivity and output across industries.
Furthermore, inclusive growth embraces the need for a robust industry-led economy. For instance, industrial sectors such as manufacturing and agro-processing should be the engine of economic transformation. The rapid expansion of the manufacturing and agro-processing sectors will lead to massive job creation, diversification of export earnings and a reduction in imported foods and other items that can quickly be produced locally.
The manufacturing sector can potentially play a vital role in the overall economic development agenda, as well as initiatives geared toward employment creation and effectively reducing poverty. We must understand that the manufacturing sector is a significant employer of skilled and unskilled labour.
If the manufacturing is at total capacity, the manufacturing sector contributes significantly to GDP, per the NSA release. This means that we need to invest in manufacturing.
It is important to note that the manufacturing sector also plays an important role by providing a critical link between producers of raw materials and consumers of the manufactured products, thereby situating the industry to play a decisive role in determining the extent to which an economy can be self-sustained.
Therefore, the manufacturing sector can also be regarded as the avenue to transform itself from being a producer and exporting primary agriculture. It also calls for measures to make it easier to import scarce skills by streamlining the work permit and visa system. This will be accompanied by a skills transfer programme to enhance local skills development. Government calls for greater focus byNamibian businesses on opportunities in fast-growing economies.
Moreover, we cannot afford to oversight the agricultural sectors. In one accord, as agriculture becomes more productive, excess labour moves from rural farm jobs to urban manufacturing jobs. While the result of this stage is a decreased share of agriculture in GDP and the labour force, agricultural modernization is critical for economic transformation and food security.
Engaging youth in agriculture has been a prominent topic. It has risen to the development agenda as a growing concern worldwide that young people have become disenchanted with agriculture. Despite the decline in interest in agriculture as a career, young farmers are still working worldwide. To encourage others to join the sector, it is vital that they are offered a voice and that they take note of what they have to say. Particularly this includes giving young farmers at the policy level a chance to provide their opinion and experiences. In this way, they can show other young people that farming can be a rewarding career as well as highlight the critical role of agriculture on a global scale.
Agriculture is a primary key for local or regional development. As we know, most people around the world often depend on agriculture production, and youth farmers have fed agriculture production the world, so we’ll need to set up a potential program for youth farming to guarantee the future.
Namibia’s industrial ambition is articulated in Vision 2030, which stipulates that the country should be an industrialized nation with a high income by 2030. Namibia to achieve V2030, a robotic cognition factors that hinder greater participation by new firms in the economy, such as the existing regulations and policies that support incumbents or are ineffective in assisting rivals and new firms; competition legislation that favours large firms and incumbents; and access to finance challenges. Change in economic relations must create opportunities for all Namibians to live productive, prosperous, and dignified lives. Current trade and industrial policies have progressed towards attaining economic and structural transformation and contributing to inclusive growth. Namibia’s industrial policy is on the right track, but some essential adjustments could significantly improve its effectiveness. There is a need first to evaluate the land reform and focus on the return of production or increase in farm output before embarking on further indigenization in other sectors. The big problem that the government faces is unemployment. Therefore, industrial and trade policy interventions cannot effectively achieve their desired outcomes if a supportive business environment does not complement them. For this reason, Namibia needs to shift its focus toward increasingly attractive regional growth opportunities, which hold significant potential to increase intra-regional exports and foster growth and economic development in the region.
In conclusion, the aim is to review the manufacturing sector by identifying key structural bottlenecks, highlighting their implications, exploring recent government interventions and proffer workable policy interventions. Namibia needs such investment to clear the backlog of unemployed. This, therefore, shows that although the government is expected to boost the sector, the private sector has to play a more significant part by remaining conscious of the market needs and responding to them through innovation and strategizing. This calls for embracing new technologies as required by the dynamic manufacturing environment.
Therefore, neglect of the agricultural sector and a call to revive the economy through huge concentration on agriculture is motivated to turn the economy into a large production base. In addition, such effort would stimulate the performance of other notable sectors like manufacturing and solid mineral.
This would be an avenue to integrate the manufacturing sector as it would equally be empowered by providing needed raw materials, which foster forward and backward linkages in the long run.
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