Namibia hopes to double mining windfalls by 2022

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Staff Reporter

Windhoek-The Fifth National Development Plan (NDP5), which was recently launched by President Geingob is the 5th of a series of a total of seven development blueprints through which the government intends to achieve growth and development.

In sequence, NDP5 will be the third five-year implementation vehicle towards Vision 2030 and will be implemented from the financial year 2017/18 up until 2021/22.

The NDP5 framework is organised around the four interconnected pillars that are founded on the principle of sustainable development, namely: economic progression; social transformation; environmental sustainability; and good governance. These pillars are aligned with Namibia’s commitment to eradicate poverty and inequality as outlined in Vision 2030, the Harambee Prosperity Plan (2016), and the Swapo Party Manifesto (2014). Additionally, the pillars support the global and continental development frameworks to which Namibia is committed. These include Agenda 2030, Sustainable Development Goals (SDGs), The Paris Agreement (CoP21); African Union (AU) Agenda 2063 and SADC Regional Indicative Strategic Development Plan (RISDP).

Within these contexts, Namibia commits itself to enhancing growth and economic diversification while addressing challenges that include a high degree of regulation and a mismatch between the skill levels in Namibia’s workforce and the skills demanded by the labour market.

NDP5 identifies five game changers that will move Namibia from a reactive, input-based economy towards a proactive, high performing economy. The game changers are: Increase investment in infrastructure development; Increase productivity in agriculture, especially for smallholder farmers; Invest in quality technical skills development; Improve value addition in natural resources; Achieve industrial development through local procurement.

Economic Progression: Structural transformation through value-added industrialisation

Mining: Where we are
Namibia’s abundant minerals has made the mining sector a major source of foreign direct investment. Namibia’s mineral resources include diamonds, copper, uranium, lead, zinc, gold dimension stone, and semi-precious stones. With Swakop Uranium’s Husab mine, the country is set to become the second largest producer of uranium in the world. Mining contributes 12 percent to GDP and provides critical upstream, downstream and side stream linkages for the economy. Examples of side stream linkages include transport services, power, water, skills, research and development, logistics, communications and financial services, while upstream linkages consist of mining inputs and services. Value addition is currently limited to diamonds and semi-precious stones cutting and polishing, copper smelting, electrolytic production of special high grade zinc and copper cathode, and the production of table and fine salt.

Desired outcome
By 2022, Namibia has an integrated mining industry value chain with double the share of valued-added mining exports from 2015.

Challenges
Economies of scale do not yet exist to make the business case for processing of some minerals to the refined state to enable further beneficiation to take place in Namibia. To address this challenge, there is need to consider importing minerals from other countries to achieve economies of scale that will make the country a competitive processor of minerals.

Security of water and uninterrupted power supply are key enablers to attract investments into mineral-based beneficiation and manufacturing. Another challenge is the volatile commodity prices which makes the mining sector’s contribution to the GDP uncertain.

Tourism: Where we are
Namibia is a remarkable and competitive destination because of its comparative advantages which include wide open spaces with spectacular landscapes; abundant wildlife resources; diversity of experiences; excellent infrastructure; security, peace and stability; and low population densities. Namibia has a growing global reputation as a premier destination for ecotourism. The tourism industry is an important contributor to the generation of foreign exchange earnings, investments, revenue, employment, rural development, poverty reduction and to the growth of the country’s economy. Tourism also creates strong direct and peripheral benefits because of its multiplier effect, based on its reliance on a wide spread of supplies and services.

Hotels and restaurants, a proxy for the tourism sector, grew by an average of 6.6 percent during the NDP4 period. It contributes about 1.8 percent to GDP. Moreover, it is estimated that during the NDP4 period, foreign exchange earnings from the tourism sector increased to about N$4.682 billion

Desired outcome
By 2022, Namibia has a diversified and competitive tourism sector with increased number of tourists from 1.4 million in 2015 to 1.8 million.

Challenges
Namibia is heavily dependent on its top ten tourist markets and thus there is need to expand the tourism market to ensure sustainability of the sector. Although Namibia has an excellent infrastructure in most areas lack of infrastructure to some tourist spots is hampering the growth of the sector.

Research and innovation: Where we are
Namibia has made progress in expanding its research and innovation system since the early 1990s. The gross expenditure on research and development (GERD) as a percentage of GDP has grown from below 0.02 percent in the 1990s to 0.35 percent in 2016. The human resource base for R&D and innovation in the country has grown to about 750 full-time equivalent personnel in R&D of whom about 350 are full-time equivalent researches. The country has also increased the number of trademark registrations, patent applications and registrations, and industrial design registrations since the beginning of the 2000s from one patent in 2004 to eight patents in 2014.

Desired outcome
By 2022, gross expenditure on research and development as a percentage of GDP increased from 0.35 percent in 2015 to 1 percent.

Challenges
Obstacles to research and innovation include weak performance in innovation indicators, inadequate funding for research and development, lack of equipment and facilities and limited collaboration between learning institutions and industries.

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