By Albertus M. Matongela
Industrialization has been identified by renowned economists as one of the ways to boost countries’ standards of living. This measure of standard of living has remained acceptable even to date. This article aims to answer several questions related to the subject matter: what is industrialization?
Are there measures or indicators of industrialization? If yes to the preceding questions, what are these measures of industrialization? Using these measures of the industrialization process, how did Namibia perform over time?
Given the aforementioned background, it is now appropriate to explain the term industrialization for you, the reader. Many people associate this term with several industrial economists like Walt Rostow, an American economist, in 1971.
According to Rostow, any economy in its development path passes through five industrial stages that include the traditional economy; the infrastructure stage; the take-off; the drive-to-maturity stage, and mass consumption stage.
Based on this understanding, industrialization is a stage in development consisting of shifting resources from agricultural to manufacturing. The reason for shifting resources away from agriculture to manufacturing is that a country needs to develop its industries in order not only to employ many people, but also to add value to its produce for the generation of foreign exchange. Foreign exchange is needed to bridge the savings-investment gap in a country’s domestic economy.
Ways of measuring a country’s industrialization process are provided in industrial dynamics literature. Only few indicators are given here. For a country to industrialize: employment in the manufacturing sector; the share of the manufacturing sector in total economic activities; and investment in manufacturing, among others, should be increasing over time.
In the latter part of this article, Namibia is rated against these measures. But it is important to say a few things about Namibia before going to some numerical measurements.
Like any other country, Namibia has a dream of being industrialized one day. Efforts that have been made over the years are numerous and are at the same time testimony to this. I can only mention few of these efforts.
Perturbed by the limited industrial base in Namibia at the time of independence in 1990, the Namibian government came up with a white paper on Industrial Development in August 1992.
The white paper aims to ameliorate the weak manufacturing base inherited from the South African regime at independence. More recently before the former president, Dr Sam Nujoma, stepped out of office as President of the Namibian Nation, the government launched a grand vision, Vision 2030, which is aimed at transforming the country as an industrial society by year 2030. We are now roughly 23 years from realizing this grand dream.
So, what do the indicators of industrialization tell us about Namibia? To what extent are we in terms of boosting industrial firms and production in the country? What could be done to expand the industrial sector thereby supporting the country’s industrial growth and development? The following table below says it all.
Namibia is doing better. Even-though the country is not industrialized yet, signs of industrialization are there. As shown earlier a country industrializes if employment and investment in and contribution of manufacturing in a country’s economy go up.
Although the proportion of employment in the manufacturing sector in total employment has been stagnant at 6 percent for eight years up to 2004, the stock of investment in the sector almost doubled.
This means Namibia is guaranteed of more employment in the industrial sector in a few years to come depending on the maturity of certain investments.
Manufacturing’s contribution to the total economic activity is picking up and with this increasing trend, people in Namibia are likely going to benefit through employment, skills development and general standard of living in future.
To ensure that we attain Vision 2030, championed by our visionary leaders, more fixed investments are required in sectors that are export oriented.