Michael Humavindu
The chief aim of this article is to address the policy context governing productive development in Namibia, with green industrialisation as its attendant pillar.
Herein, I delve into policy dynamics, the enabling environment for green industrialisation as well as associated policy dimensions and provide a hard rejoinder around green industrialisation.
Policy context
In terms of policy foundations, Namibia’s
first national industrial policy was introduced in 2012. Prior to that, the country released a White Paper on Industrial Policy in 1992. A Foreign Direct Investment Act was introduced in 199,1 and an Export Processing Zone Act saw the light in 1995.
Resultantly, working with the national Treasury, requisite incentives for manufacturers and export entities were provided through
such legislations as released.
This policy drive chiefly supported export-driven investments with a slight bias towards manufacturing sectors. There was hardly any treatment for the service and export sectors.
In December 2014, the Namibian Cabinet approved Namibia’s execution strategy for industrialisation (Growth at Home Strategy) to actualise the 2012 National Industrial Policy. Consequently, the following policy foundations were enhanced: Ten industry growth strategies were released in 2016 (for sectors such as seafood, charcoal, steel fabrication, handicrafts, wildlife products and cosmetics). A SADC Industrialisation Strategy and Roadmap was introduced in 2015. Namibia ratified the Southern African Development Community (SADC) Industrialisation Protocol in 2021.
A National Automotive Assembly Development Policy was introduced in 2019.
Namibia ratified the Kigali Amendment to the Montreal Protocol on substances that deplete the ozone layer. An 11th Industry Growth Strategy on Invader Bush Processing/Biomass Value Chain was introduced in 2021.
A Mineral Beneficiation Strategy was developed in collaboration with the Ministry of Mines and Energy in 2021.
The key features of these industrial policy outcomes are local value-addition; a targeted and phased approach to investment development; supporting value chain development; bilateral, regional and continental, as well as infant industry protection; safeguarding of policy space, as well as ensuring competitiveness.
At all times, effort was placed on ensuring such sectors are aligned to overall regional industrial aspirations at SADC and Southern African Customs Union (Sacu)determinations and deliberations. In December 2020, the existing manufacturing incentives were withdrawn. Subsequently, the ministry introduced a National Sustainable Special Economic Zones Policy in October 2022 to replace the Export Processing Zone (EPZ) regime by December 2025.
At the moment, the ministry is finalising the draft Special economic zone (Sez)Bill, Namibia Investment Law, as well as a National Informal Economy, StartUps and Entrepreneurship Policy. The ministry is envisaging finalising a new Industrial and Productive Development Policy by early 2025.
Enabling environment
The green industrialisation policy, in our view, as a pillar within a national industrial and productive development agenda, is to foster green growth – the trajectory of economic development based on the sustainable use of non-renewable resources that also internalise environmental costs, especially those related to climate change.
Ultimately, green technologies' proliferation will support production techniques that economise on exhaustible resources and help emit fewer greenhouse gases. Our chief aim as industrial policy proponents is to incentivise green investments in technologies taking place at an appropriate scale duly. The green industrialisation agenda is, therefore, a critical plank within industrial policy to mainstream the development of green technologies and investments.
Sectoral focus
From a Ministry of Industrialisation and Trade (MIT) perspective, it is important to appreciate that past work, such as sector development strategies on sectors that lend themselves to green investment technologies and investments, are further frontloaded in a future industrial policy.
These are sectors such as steel manufacturing and fabrication, charcoal and biomass, arts and handicrafts, wildlife products, seafood production and blue economy, as well as arts and handicrafts. The policy on the automotive sector and its forthcoming revisions will also lend itself to the mainstreaming of green industrialisation. The same applies to the Mineral Beneficiation Strategy, which supports efforts to ensure green technologies and green investments.
From a regional dimension perspective, sectors such as energy are seen as overarching sectors to ensure the sustainability imperative.
Namibia’s ratification of the Kigali Amendment to the Montreal Protocol also heralds our resolve to move towards greener and low-carbon industrialisation pathways.
The ministry has a National Ozone Unit with the explicit aim not only to manage the import and exports of hazardous gases but also to start supporting the development of our key industrial capabilities in the heating, ventilation and cooling sectors (HVAC). At a larger systematic perspective, the ongoing collaboration about green hydrogen and critical raw materials with partners such as the EU, the German government and Japan also provides ample space to embed a green industrialisation agenda within the National Industrial Policy resolve. The ministry also released in 2021 the Sustainable Development Goals (SDG) Investor Roadmap that promotes investment in key sectors, such as solar investments and other green technologies. This was done in partnership with the United Nations Development Programme (UNDP).
Finally, in terms of Namibia’s commitment pertaining to the Paris Agreement, the nationally- determined contributions (NDCs) identified sectors, as part of our adaptation and mitigation efforts, invariably point to sectors that are aligned to green growth, such as solar technologies, electric vehicles and biomass.
We can, therefore, testify that, based on a ministerial, national and systematic platform, we are on course to make sure the investment climate in Namibia is accommodative of the green industrialisation agenda.
Policy dimensions
Crucially, it is important to remind ourselves that green industrialisation and associated productive development pertain to ensuring the transition and transformation of our economy to a greener growth path.
In this process, renewable energy is a key enabler.
This, thus entails key realisation around transitioning from fossil fuels to renewable energy sources, increase in resource efficiency (i.e. same amount of raw materials or energy used to do more) and adopting circular economy, thus decoupling economic development from resource depletion, environmental degradation and pollution.
These ideals were ingrained
independence, as the Namibian Constitution was the first of its kind to advance environmental sustainability. Further, it is important to ensure the green industrialisation agenda supports the 3P outcomes (price-performance-parity), as these ensure mainstreaming industrial resource efficiency. In addition, it will be critical for MIT to ensure the design and support of appropriate Sez regimes to enable value chain developments that support scale and 3Ps outcomes. Finally, a key policy dimension of green industrialisation is to support and help curtail our core critical challenges – poverty, inequality, unemployment, low entrepreneurship culture and climate change. The work on the Sez regime, as well as the Enterprise Development Policy and legislation, aims to ensure the development of effective agglomeration effects to support sustained investments.
Given this, some sectors are worth mentioning, although the list is not exhaustive: green steel; green hydrogen and associated value chains; electric vehicles and associated value chains; sustainable mining (critical raw minerals and rare earth metals); green fertilisers; bioeconomy and blue economy; biomass/forestry-related value chains.
A hard rejoinder
As we work to mainstream the green industrialisation policy agenda, we have to ensure there are certain key rejoinders we need to keep in mind as we develop and structure, such as green investments and industrial projects.
There are developing shifting sands, such as carbon border adjustment mechanisms and supply chain due diligence laws that are manifesting themselves globally with implications on the competitiveness of products and market access.
There is a need to manage key risks of impacts, especially around the decent work agenda; community impact assessments and integration; labour rights, environmental stewardship and mining rehabilitation measures, such as funds.
Major emphasis, given the nature of our country on water and soil management.
Industrial downstream (to increase the added value of domestic raw materials), as well as local content policy (to further support local enterprise development and agglomeration effects outreach).
These are some of the hard rejoinders the ministry and Namibia, as a collective, will attempt to address, as it mainstreams the green industrialisation agenda within the overall work on a new national industrial policy.
It is my fervent hope that it has done justice ,and that it provides some guidance as we continue to work on creating a viable pathway for Namibia’s industrialisation ambitions.
*Michael Humavindu is the deputy executive director of industrialisation in the Ministry of Industrialisation and Trade. This opinion has been adapted from a keynote address delivered at the 2024 Namibia Green Industrialisation Workshop in April 2023 in Windhoek, Namibia.