Namibia looking to West Africa for trade
Windhoek – Namibia is eyeing lucrative markets in West Africa where there is potential for trading in certain food products, beverages, and beef, while also exploring service markets in Central Africa and Anglo-African countries, such as Kenya, according to the Minister of Finance Calle Schlettwein.
“We believe Angola and the DRC (Democratic Republic of Congo) are also good markets,” he said.
Schlettwein was responding to questions regarding the benefits that Namibia could derive from the African Continental Free Trade Area (AfCTA) agreement, which was signed and launched on March 21, 2018, during the 10th African Union’s Extraordinary Summit in Rwanda.
Out of the total of 54 African countries, 47 nations signed the agreement, making Africa one of the largest economies in the world that could enhance its capacity to interact on equal terms with other international economic blocs.
The minister is convinced that opening up to the rest of Africa does not increase its risk of being dominated by bigger economies any more than it could have been by opening up to European and American markets or even to the South African gigantic market.
“Within the free trade agreement, there are safeguards and there are frameworks that will make sure that no harm is done. It’s a risky thing, but there are opportunities to trade better and to trade more and to increase the value of the trade – it’s a big opportunity that we have to take,” he said.
Schlettwein said like other smaller economies in the SACU formula, Namibia is to a certain degree also “captured” by South Africa’s economy, which benefits more because of its size.
“But Namibia has developed to be one of the most diversified economies in Southern Africa, partly through SACU,” he maintained.
According to the National Statistics Agency, South Africa continues to be Namibia’s main source of domestic imports, accounting for 51% share of total imports, followed by Bulgaria with 15.8% share of total imports.
In third place is China that registered an import expenditure market share of 5.8%. Botswana and Zambia accounted for 3.7% and 3% of total imports, respectively.
South Africa, Botswana, Switzerland, China and Spain are Namibia’s major export destinations for Namibian products.
Schlettwein was upbeat about the AfCTA, saying that Namibia produces more similar products such as diamonds, copper, gold and zinc with its neighbours South Africa and Botswana, and because of that, they cannot trade with each other with those commodities.
“The trade agreement cracks that – it opens markets where we can sell,” he added, saying that the next phase was to add value to raw materials and produce finished goods so that the country can, for instance, sell jewellery from diamond production, rather than exporting diamonds in its raw form.
He said he wants to see Namibia move out of a situation where the economy is based on the primary sector.
“This trade agreement is actually one of the greatest opportunities for African economies to grow and move up the value chain, we want to supply finished goods rather than to remain the supplier of raw materials and the buyer of finished goods. We must see the free trade arrangement and the free movement of people as a building up capacity,” he stated.
He said that the automotive industry could also create regional and continental value chains, where a vehicle can be produced in Africa, with components manufactured in different countries before assembled.
Schlettwein boasted about Namibia’s logistical services, saying that it was one of the services Namibia could trade well in, while not leaving out architectural, engineering, educational and medical services.
“We want to be a logistical hub to all Southern Africa, to the DRC and up north,” he said.