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Namibia faces supply-side constraints to harness AfCFTA

2022-01-07  Maihapa Ndjavera

Namibia faces supply-side constraints to harness AfCFTA
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Namibia is faced with major supply-side constraints, and strategic actions are required to enable the country to position itself in African markets and value chains if it wants to reap potential benefits from the African Continental Free Trade Area.

Local consultant Paul Kalenga said while presenting the National Strategy for the Implementation of AfCFTA in Windhoek last month that the key strategic issues are that Namibia has a narrow manufacturing sector, coupled with skills shortages and know-how.

“There is weak innovation and technology capacities in the country, limited access to finance, especially for small and medium enterprises, weak export promotion support, the high cost of inputs and high transport costs as there are long distances to African markets, among other supply-side constraints,” he outlined.

Kalenga said the objective of the strategy is to attract investments in value-addition, and to promote Namibia’s participation and integration in regional and global value chains, as well as to provide women and youth-owned businesses with important entry points to leverage AfCFTA opportunities, including access to investment and working capital, trade finance, production inputs and market information.

Priority products that Namibia can focus on are fish and fish products, livestock, meat and meat products, beer, salts, unwrought zinc, miscellaneous chemical products, wood, charcoal, zinc bars and wire, and copper cathodes.  

As a small open economy, the AfCFTA provides an expanded market for the country’s goods and services. The AfCFTA builds on progress achieved through Namibia’s participation in regional integration initiatives, mainly the Southern African Development Community (SADC) and the Southern African Customs Union (SACU) as key stepping stones to continental economic integration.

Namibia signed the Agreement on 2 July 2018, and deposited the instruments of ratification of the Agreement on 1 February 2019.  

Kalenga stressed that the AfCFTA can be an important platform for Namibia’s economic diversification, export expansion and competitiveness towards sustainable growth, creation of sustainable jobs and reduction of poverty. At the same occasion, local economist Omu Kakujaha-Matundu said Namibia’s intra-African services exports remain under-developed, and most of the country’s services are traded with South Africa. 

“Exploring sources of efficiency improvements and building export capacity across all services’ sectors will enable Namibian businesses to take advantage of opportunities in regional and global markets. A key challenge in assessing Namibia’s trade in services is data deficiencies on services trade and trading partners. Improving the collection of statistics on services trade and investment is a critical intervention area to facilitate evidence-based policies and growth,” he explained.

Meanwhile, in his 2022 New Year’s message, President Hage Geingob reiterated that Namibia will need to diversify its portfolio of economic activities in strategic sectors, which can support access to the AfCFTA and the global markets. 

“The diversification of economic products, including finished products, and unique services will enable us to be cushioned against external risks and shocks. In order to achieve this, we need to retool and reskill our workforce,” he said.

2022-01-07  Maihapa Ndjavera

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