During the recent state visit of HE President Dr Hage Geingob to the People’s Republic of China, mutually beneficial financial cooperation between the two countries was extensively discussed.
On the one hand, Namibia’s developmental need to diversify and grow an export-oriented economy was recognized while, on the other hand, China’s ability as the second largest economy to not only provide a significant market for finished goods and commodities, but also the provision of skills, technology and capital, is obvious.
It was agreed that Namibia can benefit from deepened financial cooperation targeted towards industrialization and improved productive capacity, economic diversification and infrastructure development in both the productive and social sectors and especially in agriculture and skills and technology transfer. China in turn can utilize Namibia’s strategic geographical location and market access into SACU, SADC, Africa and beyond to serve these markets.
The envisaged financial corporation would entail grants and concessional loans or blended instruments, public and private investments and cooperation in tax and customs administration. Loan and grant agreements will be project-specific and need to be agreed upon on a project-by-project basis.
Conditionalities and loan terms, empowerment provisions, skills and technology transfers as well as sourcing and procurement rules must be given due consideration for a win-win impact. For now, no new loan agreement has been entered into. As part of the Comprehensive Strategic Partnership between Namibia and China, strategic consultations in bilateral as well as multilateral financial matters will be conducted regularly.
* Calle Schlettwein is Namibia’s minister of finance