Manufacturing Sector Lags Behind in Exports

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By Wezi Tjaronda

WINDHOEK

Less than 10 percent of manufacturers in Namibia currently export their goods.

The Namibia Manufacturers’ Association (NMA), with the assistance of the Namibia Trade and Poverty Programme, conducted a survey to develop a database of export products manufactured in Namibia. This was aimed at creating a better export environment for manufacturing businesses and to obtain information on all export goods available when participating in Foreign Trade Negotiations.

Out of 546 manufacturers interviewed, only 8.4 percent said they were exporting their products. The products are exported to Angola, South Africa, Botswana, Zambia, other SACU countries, Zimbabwe and then the EU.

Some products are also exported to the US, India, China and Australia.
The NMA has 67 members, but these are big companies that manufacture food- stuffs, beverages, building materials, metal products, chemical products, charcoal, textiles, leather and leather products, wood, paper and man-made fibres.

Other companies manufacture cosmetics and beauty products, medicines, sanitaryware, paints and plastic products.

The report says the highest exports were made to neighbouring countries because of the lower transport costs. Even though Namibia recently initialled an interim Economic Partnership Agreement with the EU, this market is number seven on the list of preferred export destinations.

The survey found that among the reasons for the low exports were lack of finance, lack of a trained and skilled workforce and lack of raw materials and other inputs.

In a statement released yesterday, NMA said lack of finance was considered the biggest constraint to manufacturers followed by lack of trained personnel, which 45.1 percent of the manufacturers said was a serious problem. More than 40 percent indica-ted that lack of raw materials and input supplies were also hampering their manufactu-ring ventures.

Other constraints that discourage exports of locally manufactured goods include high costs of transport and raw materials and lack of suitable buyers in other countries.

A small domestic market, dependence on imported goods, limited supply of local capital, a widely dispersed population, a small skilled labour force with high wages and strong competition from South Africa have historically inhibited Namibian manufacturers.

NMA Chief Executive Officer, Hennie Fourie, said manufacturing is considered a sector which will make a substantial contribution in reaching the country’s deve-lopment goals.

The national account indicates that the manufacturing sector contributed 12.6 percent to GDP in 2006.

The study also found that the largest number of manufacturers (74.7 percent) operate in the Khomas Region, followed by Erongo (9.5 percent) and Oshana with seven percent.

This, said the report, was in line with the expected high economic activity in the capital and a favourable infrastructure for manufacturing, such as good connections for the transport of finished goods and the availability of spare parts, raw materials and technical support.

The relatively high number of manufacturers in the Erongo Region was due to the high activity in the fishing sector, while the high population of the north explains the large number of manufacturers in the Oshana Region.

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