Manufacturing News

Ministry of Industrialisation and Trade…

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Introduction

In the Foreword of the 2021 Manufacturing Supplement, we outlined the empirics that govern the manufacturing sector, and by extension the industrial cohort of our economy. We provided almost what we can term as consistent characteristics around the sector, such as persistent similarity in its structure since Independence, scalability limits,  an unviable cost structure mainly driven by administrative prices (such as water and electricity), and skilling and upskilling constraints. In addition, the perennial problem of access and cost of finance continues to rear its head. These challenges remain, and are a constant policy challenge. Moreover, the reality of manufacturing and by extension the industrial sectors hardly attain a contribution of more than 15% of the Gross Domestic Product (GDP), which is also a regional confrontation that leads to many a meeting at regional fora. Consequently, having set the context in the 2021 Foreword of the Manufacturing Supplement, we use this edition to look at recent developments in policy, legislation and regulatory developments that can help us continue to ensure a viable policy framework towards the development of our productive capabilities that can support Namibia as a manufacturing hub. We narrate these below, and as in the previous edition where we highlighted the initiation of the development of a special economic zone policy, we provide more attention to it in the last section.

 

Recent Policy Developments 

 

Recent developments within the policy framework point to a composite of policy, legislative and regulatory developments that may ensure enhancements to our efforts in terms of manufacturing sector growth. These are:

On regional value chains’ development at the Southern African Customs Union (SACU), successful investment roundtables were held, with Namibia leading the Meat and Meat-processing cluster. Substantial opportunities exist within this sector, such as the development of a meat cold storage facility that can enable the exports of both Namibian and our neighbours’ meat exports to key markets.

On the developments in the automotive sector, a Namibian version of the SACU programme on Automotive Production and Development Programme (APDP) was gazetted in August 2021 as a policy to enable the sector to utilise existing provisions in the SACU regime. 

A key development was the release of the revised National Quality Policy in April 2022 to ensure products traded and manufactured by local entities are in compliance with the set standards under the ‘Growth at Home’ Industrialisation Strategy, whilst also imbuing consumer protection measures by  subjecting imports to quality compliance tests to reduce sub-standard products entering the Namibian market.

Work on developing national standards have commenced in earnest, looking at sectors such as charcoal, and even manufacturing standards for coffin assembly and manufacturing. Standards are key in ensuring the competitiveness of Namibian products whilst also enhancing regional competitiveness as both SACU and SADC gear up to trade within the AFCTA. 

The tabling of a revised Metrology Bill by the Ministry in June 2022 reinforces the basis of fair domestic and international trade, as the legislation ensures that products produced or manufactured locally met international requirements in terms of measurements.  Metrology regulations and oversight support consumer protection and serve as an enabler to fair trading and market access, and helps with any technical barriers to trade that can be imposed in the absence of such measurements.

Policy work continues to be pursued with the private sector, as the past year saw a collaboration that ensures the provision of adequate sugar for the local downstream sector (in lieu of a potential shortage of supply in SACU).  A longer-term and sustainable solution will be pursued in 2023.

In addition, we witness the initiation of an intensive partnership to work around the problems that may threaten the development of our productive capabilities in the poultry sector. 

Additional regional value chains are being validated at the SADC level, with this year seeing a focus on mineral processing as well, with Namibia seeing opportunities in the manufacturing of renewable energy items as well as further extensions of the diamond and copper sectors. These developments will be further developed beyond the 2022 period.

The continuous work on finalising the Investment Bill for Namibia is key in the development of a local manufacturing capability as sector reservations’ provisions may bolster such efforts. The Bill, now at work for over 10 years, needs to be adopted formally to curtail any investor uncertainty, but also to lay the groundwork for further supporting entrepreneurial development through sector reservations.  

 

Special Economic Zones Policy and Beyond

 

Finally, the period under review saw Cabinet approving the National Sustainable Special Economic Zones’ Policy for Namibia. As alluded to in the 2021 Foreword, the Namibian SEZ framework and its accompanying incentives will further lead to domestic and foreign investment in the manufacturing sector to achieve various economic development goals such as a) increased exports, b) increased employment and skills development, c) attracting sustainable investment and d) developing capabilities in selected industries. In terms of the key imperatives for the Namibian manufacturing sector, the outcomes of this policy work is that:

There will be a single national definition of manufacturing (affixed to the Namibia Statistics Agency definitions) in terms of the application of incentives, and this will reduce the policy incoherence that was evident in the previous approaches.

SEZ applications can be for a variety of sectors – the aim is to ensure domestic productive development. Thus, many sectors will be eligible.

SEZ incentives are more sensitive to sector-specific nuances as they assume a dynamic incentive framework.

The National Policy will be buttressed by a Law and Regulations in 2023, and these processes will be marked by extensive stakeholder outreach and consultations.

 

Conclusion 

 

Our resolve as a nation as well as a region to drive towards efficient manufacturing capabilities and eventual industrialisation is marked by the need to give attention to deficiencies at policy and regulatory levels. Incidentally, these deficiencies also pronounced themselves at the regional platforms, whereby collectively we are framing ‘Factory SACU or Factory SADC’, depending on the meeting context. Within these realities, policymaking continues to ensure that any such nuances safeguard and advance the Namibian manufacturing productive capability. The path may still be hazy, but will clear definitely as we continue to clear policy, regulatory and legal hurdles to ensure private and also public sector dynamisms to foster our manufacturing economy.