Industrialisation under the Growth at Home strategy

MICHAEL HUMAVINDU



Industrialisation has since 2015, with the introduction of Growth at Home Strategy, witnessed both positive and negative trajectory. In terms of gains, various interventions in key sectors such as fisheries, minerals and general manufacturing have led to activities that could help set the economy on a firmer path towards industrialisation.

Relevant legislative and regulatory interventions were introduced which invariably still has to be evaluated in terms of impact. In 2016 the ministry launched ten sector growth strategies aimed at identifying development opportunities in the economy as well to establish collaborative relationships between government and the private sector.

Sectors such as charcoal, cosmetics and automotive has started to witness some activities that could lead to the development of industrial capabilities with concomitant opportunities for technology transfer and skills upgrading.

A recent opportunity that could unlock exports of 100 000 tonnes of game meat to the European Union will foster at least five to six export-certified abattoirs.

The introduction of levying natural resource taxes (such as on dimension stones) in key sectors aims to promote the deepening of our value chains and routing the exports of our resources unprocessed to local nascent processing sectors, where feasible.

In terms of not such positive deviance, our industrialisation ambitions are still heavily afflicted by a cost structure that is very unviable. The cost of key inputs such as power, water, transport tariffs combined with scale economies ensure that we stay uncompetitive.

To this end, we need to reorient our agenda on incentives towards interventions that can affect the cost structure and scale economies positively. Here the country could look at harnessing non-fiscal incentives and industrial and agricultural rebates of SACU more effectively.

We also need to ensure a much more balanced and nuanced approach to how industrial support is meted out. The pre-2015 period was heavily concentrated on vertical support mechanisms such as direct grant and financial support interventions. The post-2015 period teaches us that a vertical approach combined with measures that are more horizontal is much more feasible.

Horizontal measures focusing on cultivating sector associations, ensuring quality assurances, standards, productivity enhancements are key to ensure both the domestication of locally manufactured products as well as access to export markets.

Finally, the inherent low industrial capability of the country makes it difficult to capture both backward and forward linkages at the onset of a key investment that we may have attracted.

This unfortunate reality creates very little avenue to ensure wider developmental impact of the said investment. However, as we are also focused on regional integration, one key aspect of improvisation around such an impasse is to promote regional sourcing and fostering bilateral and regional value chains.

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Namibian Sun 2024-11-22

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