Namibia’s natural endowment of raw materials like minerals, precious and semi-precious stones, agricultural produce, fish and other marine resources, and potentially oil and gas, should not be a curse but turned into a competitive advantage.

According to Trade and Industry Minister, Calle Schlettwein, solutions to the country’s persistent and perpetual problems of high unemployment, unequal income distribution and poverty may be found in innovative strategies “that make the most of our comparative and competitive advantages”. 

Speaking at the official opening of Namibia’s second International Oil and Gas Conference and Exhibition on Thursday, Schlettwein said Namibia’s economy “has to be transformed from one that relies on trading in raw materials only, to a diversified economy that produces value-added and finished goods”.

“The oil and gas sector has great potential for developing value chains. The rubber industry, plastics, fertilizers and organic chemicals spring to mind,” he said.

Before sharing this industry insight, Schlettwein warned that in the ministry’s assessment the Namibian economy is suffering from the raw material endowment curse, which is typical for many colonial economies.

“When relying on exports of raw materials we remain price takers for our export commodities; as well as for our imported finished consumer goods. The economy remains prone to external shocks and price volatility in the global market. We are perpetually forfeiting economic opportunities to those who beneficiate the raw materials imported from Namibia and we are continuously exporting jobs that are created in value chains based on our raw material supply,” cautioned the trade minister.

In a recent report on Namibia, the International Monetary Fund (IMF) stated that although Namibia has been one of the more stable economies in Africa, its ballooning import bill could in the long-term pose a major threat to government expenditure. The IMF is of the view that Namibia could double its manufacturing output from 6 percent annually and reduce its rising import bill by 10 percent, if focus is emphasized on growing secondary and tertiary industries. “I cannot agree more with this sentiment,” said Schlettwein.

Historically, Namibia’s manufacturing sector has been inhibited by numerous factors, including a lack of a serious capitalization for major manufacturing projects, limited access to finance, limited skills availability, high input costs (particularly utilities and transport), small domestic and market access constraints for export, limited access to production technology as well as stiff competition from subsidized imports.

However, Schlettwein noted that in terms of market size and access, Namibia has made significant progress. He said that as a member state of the Southern African Customs Union (SACU), the country is part of a single market that includes South Africa, Botswana, Lesotho and Swaziland.

“As a member of the SADC free trade area Namibia has quota and tariff-free access for about 90 percent of all tariff lines into the SADC area, save Angola and DRC. With the European Partnership Agreement initialled we have quota free, tariff free access into the world’s largest market, the EU. As a member of SACU, Namibia has preferential access into the EFTA (Economic Free Trade Area) group of countries (non-EU countries) and to the MERCUSUR group of South American countries. Namibia has therefore good access into the global market. What we however do not possess as yet is the productive capacity to produce finished goods with which to trade,” warned Schlettwein.

The conference and exhibition ended on Friday and has the theme “Unlocking and Optimising our Resource Potential”. The conference focussed on exploration, energy and investment and was organised by Rich Africa Consultancy.