Namibia’s economic growth is largely dependent on investments in the primary sector (raw materials), specifically in mining; a trend that must change to focus on the secondary sector (production), if the country is to see more wealth.

This was said by the Minister of Trade and Industry, Calle Schlettwein, at a dinner hosted by the Walvis Bay branch of the Namibia Chamber of Commerce and Industry on Monday.

He said Namibia inherited a skewed economy that “leaned” on the primary sector, because prior to independence, the country had no economic contact with the global market.

The new government however attempted to break that isolation and join the global economy through a variety of partnerships and policies that opened doors for trade between Namibia and global economies including the European Union and Asia.

“Namibia is at the bottom of the global value chain because it exports valuable raw materials and then it imports the value-added products from its own raw materials,” said Schlettwein.

He said Namibia’s economy has grown steadily since independence but the growth did not create enough local wealth; nor did it distribute industry evenly across the country. People leave their homes to find wealth through employment in industrial centres. Most of this time, this hope is shattered as they get no jobs, thereby being left poorer.

“This skewness brings about a perpetual poverty,” he said.

He said Namibia is endowed with valuable resources, and value-addition to these resources was the key to creating jobs and wealth, and do away with skewed wealth distribution.

According to Schlettwein, had Namibia kept all the earnings from its diamonds, which have been mined in the country for the past 120 years, “we all would be very wealthy... which we are not”. 

He said Namibia’s earnings was a “tiny fraction” of what it could be and the answer to this is value addition. “We need to use our raw materials in a value-chain environment,” he said. “Without value addition in the economy, we will not become wealthy at industrial level.”

Schlettwein believes the involvement of SMEs in the economy is also important for wealth creation and distribution.

“Investment by multi-nationals is good for economic development; but not for wealth creation. Only investment in SMEs will bring wealth,” he said.