MANUFACTURING

MANUFACTURING 2024-02-20T10:36:38+00:00

The manufacturing sector is projected to grow by 3.2% in 2023 and 3.9% in 2024. In its March 2023 Economic Outlook Update, the Bank of Namibia (BoN) states, “The projected improvements are expected to be driven by higher growth rates for diamond processing, non-metallic mineral products and textile and wearing apparel.” A better performance is also expected from the beverage sub-sector.

The Ministry of Industrialisation and Trade is responsible for the development and management of Namibia’s economic regulatory regime. The manufacturing sector is guided by the Industrial Policy, while “Growth at Home” is the implementation strategy for industrialisation.
Growth at Home focusses on three strategic intervention areas:

  • Supporting value addition, upgrading and diversification for sustained growth
  • Securing market access at home and abroad
  • Improving the investment climate and conditions

The Retail Charter, a project of the Namibia Trade Forum (an agency of the Ministry of Industrialisation and Trade), aims to create a retail environment that will stimulate manufacturing and ensure market access locally and remove structural barriers.
Its aims and objectives include:

  • Transforming the retail sector from one that relies predominantly on foreign imports to one that gives preference to local manufactures by promoting the sourcing of locally produced products by retailers
  • Supporting local businesses in securing retail space at home, so as to increase the visibility of their products through the promotion, marketing and distribution of such products

Namibia’s small domestic market, the manufacturing industry’s vulnerability to negative impacts from the primary industries and the lack of incentives are among the constraints facing the relatively small manufacturing industry which is largely based on light industry.

Grain mill and other food processing represent 45.6% of the total manufacturing output, followed by beverages (11%), diamond processing (10%) and meat processing (6%). Other major sub-sectors include chemicals and related products, fabricated metals, the beneficiation of basic and non-ferrous metals (mainly copper and zinc), wood and wood products. The sector has, however, become more diversified during the past two decades in sub-sectors such as textiles and clothing, packaging and plastics, cosmetics, cleaning materials and pharmaceutical products.

Situated on the southwestern coast of Africa, Namibian manufacturers have access to a potential export market of over 330 million people in markets of the Southern African Development Community (SADC). A well-developed transport infrastructure with four transport corridors links the country to South Africa, southern Angola, Botswana, Zambia, Zimbabwe and the southern Democratic Republic of Congo.

SPECIAL ECONOMIC ZONES

The Special Economic Zone (SEZ) policy was approved by the cabinet in August 2022 and the SEZ bill is expected to be tabled in parliament during the 2023/24 financial year. The act will provide favourable conditions and incentives for manufacturers and exporters.

The policy will replace the Economic Processing Zone regime which failed to attract new investments and create new jobs and to avoid blacklisting by the European Union. Lower corporate tax rates, reduced duties and customs tariffs, a capital deductions allowance and a research and development allowance are among the fiscal incentives for various investment categories in the SEZ policy.

NO SMOOTH RIDE

The Windhoek High Court has ruled that French car manufacturer, PSA Automobiles SA, and the government must resolve a dispute that has arisen amicably, failing which the dispute must be referred for arbitration. The court made the ruling after PSA Automobiles SA turned to the court to sue the Namibian government for N$80 million after the automaker manufactured only 150 vehicles since it was officially opened by President Hage Geingob at Walvis Bay in December 2018. PSA has been unable to export vehicles to Southern African Customs Union (SACU) countries because the government did not seek exemption from normal duties and taxes levied on the export of vehicles from Namibia to other SADC countries.

The assembly plant is a joint venture between Peugeot Opel Assembly Namibia, which has a 51% stake, and the government, which owns the remaining 49%. It was set to manufacture 5,000 vehicles per year by 2020 to meet the demand for Opel and Peugeot cars in SACU.

NAMBREW

Dutch beer company Heineken N.V. became the controlling shareholder of Namibia Breweries Limited (NBL) after acquiring Ohlthaver & List’s (O&L) 50.01% shareholding in Namibian Breweries Investment Holdings Limited in April 2023. Heineken already owned 49.99% of the shares prior to the acquisition.

Heineken is now the sole shareholder of Namibian Breweries Investment Holdings Limited, which owns 59.4% of the shares in NamBrew on the Namibian Stock Exchange (NSX). The remainder of the shares on the NSX are held by institutional and individual investors. Heineken also acquired the entire shareholding of Distell Namibia Limited, Distillers Corporation Namibia (Pty) Limited and Namibia Wines and Spirits Limited.

CONSTRUCTION

The construction industry is projected to record growth in 2023, albeit only marginal, for the first time since it went into recession in 2016. The Bank of Namibia (BoN) states in its March 2023 Economic Outlook Update that the industry is projected to grow by 0.8% in 2023 and 1.8% in 2024.

The industry has seen a massive decline in its contribution to the country’s GDP which has shrunk from 7.2% in 2015 to less than 2% in 2022, while the number of people employed by the industry has decreased by 50%. It has for years faced competition from foreign companies that benefit from cheap state-sponsored financing and can consequently submit much lower tender bids. The industry has also been adversely affected by the government’s decreasing development budget over the past few years, while several large private construction projects have been completed.

The Construction Industries Federation of Namibia (CIF) has been lobbying the government for a Construction Council since 2006, but despite a pledge made by the government at the Namibia Investment Summit in 2019 that such a bill would be tabled in parliament before 28 February 2020, the bill is yet to be tabled. The absence of a statutory council to regulate the industry has resulted in poor workmanship, project delays and the abandonment of incomplete projects.

SIX-STAR RATING

Nedbank Namibia’s headquarters in Windhoek’s central business district has received a six-star rating from the Green Building Council of South Africa (GBCSA), making it the first building in Namibia to receive this certification, as well as “World Leadership Excellence” status in environmentally sustainable building practices.

The building, with its energy-efficient design and energy-saving systems, uses 40% less energy compared to similar buildings. Water usage from the municipal system has been reduced by 20% through water-saving measures and the reuse of greywater.

VITAL CONTACTS

NMA – Namibian Manufacturing Association

The Namibian Manufacturers Association (NMA) is an association not for gain which represents Namibian manufacturers by facilitating a sustainable, competitive and prosperous manufacturing industry for all stakeholders.

P O Box 3325, Windhoek
Old Power Station, Shop no 46, 2nd Floor, Windhoek
Tel: +264 61 308 053

Namibian Standard Institution (NSI)

P O Box 26364, Windhoek
Tel: +264 61 386 400
nsi.com.na