By: Nghiinomenwa-vali Erastus
As a matter of the Namibian government policy to open the country’s market further to increase trade and to develop more competitive domestic industries, a draft National Trade Policy was unveiled last week.
The Ministry of Trade and Industrialisation, Lucia Iipumbu, said the draft policy was validated the government in collaboration with the Economic Commission for Africa (ECA) and the United Nations System in Namibia during a meeting held in Windhoek on 27 March 2023.
Now, Iipumbu said government is seeking more inputs from the private sector as the draft policy acknowledges the need for domestic trade-offs in relation to the interests of domestic producers and consumers as well those of the trading partners.
"Therefore, it underscores the importance of fostering an inclusive, consultative public-private dialogue on instruments and measures available to stimulate and promote trade development,".
Iipumbu explained that the policy is imperative not only for the structural transformation of the Namibian economy but the potential it holds for improving
income inequality, which translates to better livelihoods for more Namibians.
The release of the draft policy for stakeholder consultations comes shortly after the Bank of Namibia has raised the alarm that the ongoing Russian-Ukraine conflict threatens global growth as it will result in further elevated prices that could potentially intensify food insecurity and social unrest, while geopolitical fragmentation may impede global trade and economic cooperation.
The policy focuses on both trade in goods and services, with the latter, including digital trade, having become the most dynamic part of global trade.
In February this year, Namibia’s trade with the rest of the world totalled N$225 billion in 2022 compared to N$161.1 billion recorded in 2021.
According to the Namibia Statistics Agency (NSA), the country imported goods worth N$128.3 billion in 2022, a 34.8% increase from N$95.2 billion recorded during the same period last year. However, exports stood at N$96.4 billion, resulting in a trade deficit N$31.9 billion.
In December last year, Namibia’s exports stood at N$8.7 billion and imports at N$9.8 billion, resulting in the country’s trade deficit of N$1.1 billion.
The draft policy is thus a sectorial policy that aims to transform the country’s economy from a supply constrained one into a competitive export-led entity responsive to enhanced domestic integration and wider participation in the global economy through national trade liberalisation.
Furthermore, the draft policy recognises that the smallness of Namibia's domestic market, high levels of income inequality, and unemployment impose limitations on trade policy, especially in relation to import-substitution trade strategies. Namibia's import penetration rate indicates that between 2017 and 2021, 44.1% of Namibia's aggregate demand was on average satisfied by imports.
Over the same period, only 37.8% of Namibia's production satisfied foreign markets.
The Ministry indicated that there is strong evidence to suggest that an export-orientation strategy within the context of establishing a better balance between imports and exports, while encouraging domestic demand, is an appropriate trade policy option for Namibia.
The government has also highlighted that it is vital in shaping a National Trade Policy that supports inclusive, sustainable growth and development, anchored in the improvement of welfare the people, including making progress towards the country’s Vision 2030 and the African Union Agenda 2063.
Namibia has the second highest levels of income inequality with a Gini coefficient of 59.1 and high poverty levels of 17.4%.
During the validation consultation, the ECA’s Chief of Inclusive Industrialisation for the Sub-Regional Office Southern Africa, Olayinka Bandele, said she is confident that the policy will contribute to supporting economic development.
Moreover, it will drive economic growth and especially support the endeavours of the micro, small and medium enterprises and women cross-border traders.
She underscored the importance of a national trade policy which seeks, among others, to consolidate existing markets for Namibian products and to push for new and enhanced market access to take advantage of the benefits of trade as the engine for sustainable economic growth and development.
Bandele added that the draft policy seeks to promote economic diversification, create employment opportunities, increase competitiveness, and enhance the country's participation in regional and international trade.
She emphasised that "trade policies are key in facilitating the flow of goods and services between a country and its trading partners as well as in the domestic market”.
Email: erastus@thevillager.com.na
