oday New Era continues with our coverage of the Harambee Prosperity Plan, which is built on five pillars and consists of sub-pillars to form the frame or structure of a house. These pillars, which consist of sub-pillars, are effective governance; economic advancement; social progression; infrastructure development; and international relations and xooperation. Today we unpack pillar two of HPP: Economic Advancement: Economic Transformation.
A situation analysis within the Harambee Prosperity Plan states that Namibia is endowed with significant human and natural resources that can be used to advance structural economic transformation. However, the economy so far has not reached the degree of diversification and value addition necessary to provide long-lasting and sustainable growth.
The reliance on the primary sector and exports of raw materials makes the economy vulnerable to external shocks. Most of the natural resources leave the country in raw form for final processing outside the country, thereby creating employment opportunities in other countries. In addition, to the production and export structure, the ownership structure of the assets of production remains concentrated in the hands of the few, therefore contributing to the disparity of income and prevalence of poverty in Namibia.
Broad-based economic empowerment is, therefore, essential for social cohesion and sustained development.
The desired outcomes with respect to economic transformation during the Harambee period will be: At least 8 000 new jobs created in the manufacturing sector; the volume of locally produced goods supplied to public and retail sector significantly increased in line with the targets of the Retail Charter; at least 10 new investment projects attracted through investment promotion creating a minimum of 1 000 jobs; and economic empowerment leading to higher inclusion of disadvantaged groups into the formal economy.
The following strategies and actions will be deployed to ensure that the transformational targets are met during the Harambee period:
Namibia Industrial Development Agency: We will establish the Namibia Industrial Development Agency (NIDA) by 2016 and capacitate it to implement structural transformation initiatives, such as the development of selected industries and their value chains. We will review our incentive schemes and realign our economic development support programmes according to the needs of industry.
Industry Growth Programmes: Ten Industry Growth Programmes geared towards local value addition and strengthening of forward and backward linkages within the Namibian economy will be developed by 2016 and implemented by 2020. In the beginning focus will be on adding value to local resources by promoting growth and diversification of processing and manufacturing industries related to mineral resources, large and small livestock, as well as local plant, crop and forestry resources.
In 2016, in particular, the following projects will be carried out: the Small-Scale Miners Hub that will become operational in the third quarter of the year; the opening of an upgraded Northern Tannery also by the third quarter of 2016; and completion of construction of a pharmaceutical plant before the end of the year.
Other industries to be supported in subsequent years of Harambee, due their forward linkages into construction, agriculture, mining and other sectors of our economy include metal fabrication, building materials and automotive parts manufacturing.
The Equipment Aid Scheme: The Equipment Aid Scheme will be revived by the end of the First Quarter 2016. In the first year, the number of beneficiaries targeted will be 180 and will thereafter be increased to a total 800 beneficiaries during the Harambee period.
Proactive and Targeted Investment Promotion: We will apply a proactive and targeted approach to attract high quality investment projects to fully utilise the domestic and international investment potential, to support the diversification process set out in the ‘Growth at Home’ strategy. This will include investment conferences every second year, starting in 2016.
Economic Empowerment Initiatives: We will introduce and operationalise economic empowerment legislation to achieve greater equity in society in general and in particular greater equity in the ownership of productive assets. We will ensure the empowerment framework does not inadvertently stifle entrepreneurship. Empowerment should not be narrowly viewed from an ownership perspective, while ownership, especially broad-based ownership is important – empowerment from a social perspective is equally crucial.
Consideration will be given to the provision of staff housing as an important component of empowerment. We are delighted that the NCCI and Chamber of Mines’ members, in true Harambee fashion undertook to support government efforts to house Namibians and by agreeing to adjust their procurement policies to favour SMEs and local entrepreneurs. We also appreciate NCCI’s commitment to develop a mentorship scheme for its members that will be introduced in Year Two of the Harambee period.
Land reform: As part of economic transformation, government will expedite land reform in an orderly manner during the Harambee period. Pertaining to this the new Land Reform Act will be promulgated in the first year of Harambee. Government will also allocate resources to buy land and resettle landless Namibians. To entice those with more land, government will amend the current land tax regime to be more progressive in nature.
In other words, the more land one owns the higher land tax will become. In the spirit of Harambee, we call upon those with more land to sell land at reasonable prices. The Ministry of Land Reform will in Year One of HPP, host a second land conference that will take stock of what was achieved since the first land conference and what more could be done to fast-track implementation of the recommendations of the first land conference.
Local Production Capacity: We will provide support for the establishment of local production capacity of inputs and supplies in targeted industries, such as import-substituting input production; support to small-scale input producers in upgrading their technologies, knowledge and skills and applying best practices.
Local Sourcing Schemes: Support to efficient, inclusive and sustainable local sourcing schemes in the targeted industries will be made available.
Business Incubation Processes: The Ministry of Industrialisation will introduce support to SME business incubation processes in targeted industries and their value chains, including industry-specific assistance and start-up mentoring schemes.
Upgrading, modernisation and expansion of industrial infrastructure: The Ministry of Industrialisation, Trade and SME development will continue to invest in the construction of public infrastructure and public services that are relevant for enhancing the international competitiveness of the targeted sectors and industries. In this regard, more SME and industrial parks will be constructed country-wide.
Tomorrow we will continue unpacking the Harambee Prosperity Plan by taking a closer look at Youth Enterprise Development within the Economic Advancement Pillar.