Namibia Could Be Preferred Destination for Investment in Africa

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By Wezi Tjaronda WINDHOEK The Namibia Manufacturer’s Association (NMA) has set for itself an ambitious vision of making Namibia the favoured African destination for investment in manufacturing – this despite Namibia’s identified key structural weaknesses and the fall on the Global Competitiveness ranking from 79 in 2005 to 84th place in 2006. For Namibia to achieve its targeted 7 percent of economic growth, manufacturing needs to grow by 30 percent and not the current 10.7 percent that the sector contributes. Stakeholders in the manufacturing industry met recently to discuss a manufacturing strategy for Namibia during which they determined the vision for the industry to become the preferred destination for investment in the whole of Africa. To attain the vision, however, the main initiatives identified that the country should put its focus on, are establishing and implementing enabling policies that include transparent incentives for new businesses and reward for high growth and productivity. The country will also have to ensure that it has strong institutions that focus on facilitating development, removing bureaucracy and speeding up processes, reducing costs and improving performance in the areas of basic utilities and infrastructure. Other initiatives that will enable Namibia to become the preferred destination for investment in manufacturing in Namibia include strong branding of locally-manufactured products, preferential government procurement and increased productivity, with particular emphasis on education and training and transfer of skills. Some of the identified key weaknesses that threaten Namibia’s manufacturing industry and need urgent redress, are high input costs regarding electricity, transport and port charges, high cost of capital, scarce water, low level of productivity, the negative impact of HIV/AIDS, lack of highly-skilled professionals, bureaucracy and inadequate institutional support and expensive technology infrastructure. Namibia’s industry is also threatened by cheap imports from elsewhere which have the potential to weaken local manufacturing, tax benefits that are not clear and do not reach the intended recipients and also land reform which could frighten investors. However, Namibia has strengths and opportunities that it could use to its advantage which include a peaceful and stable society, sea, air and road links, a strong base in mining, fishing, and meat which has significant scope for manufacturing beneficiation, commitment from senior government officials to enable the sect to grow and enabling legislation. The NMA said in a statement last week that Namibia was one of the small cluster of countries that are in transit from competitiveness being driven by national factors to being driven by efficacy. NMA Chief Executive Officer Hennie Fourie said national competitiveness includes a set of factors, policies, and institutions which determine the level of productivity of a country. “Two over-arching measures will be the contribution of the Namibian manufacturing sector to GDP and the significant improvement in the World Economic Forum rankings of Namibia in all the nine pillars of global competitiveness,” he added. The Global Competitiveness Index provides an overview of factors critical to driving the productivity and competitiveness, which are grouped into nine pillars, namely: institutions, infrastructure, macro economy, health and primary education, higher education and training, market efficiency, technological readiness, business sophistication and innovation. Fourie said the government should prioritize and give incentives to sectors that add value to Namibia’s natural resources, primary products, agriculture and mining as well as the small and medium enterprises.