Namibia – China Relations built on mutual respect for a brighter future

Official diplomatic relations between China and Namibia were cemented on the 22nd March 1990, a day after Namibia hosted its independence celebration with China establishing its embassy in Windhoek. In April 2018, Namibia and China elevated their ties of cooperation to that of a comprehensive strategic partnership.

The Republic of Namibia and the People’s Republic of China have long-standing bilateral relations built on friendship and mutual respect for a brighter future. China particularly, has been supporting Namibia’s economic and social development and offering development assistance in many projects over the years. These projects include the construction of national buildings, hospitals, clinics, schools, roads and port infrastructure. In terms of bilateral trade in 2019 the total volume of the bilateral trade between China and Namibia was US$709 million, with a year-on year decrease of 14.28% from US$800 million in 2018. Among it, the volume of China’s exports was 198 million with a decrease of 38.7%, and that of the import was $511 million with an increase of 1.38%.

Chinese companies have contributed N$250 million in tax revenue to the Namibian government since 2016, while creating up to 11 000 indirect and direct jobs in the country. Notable among China’s recent investments in Namibia is the US$4.7 billion) invested into the Husab Uranium Project, one of the largest Chinese investment in Africa, the US$27 million invested in Walvis Bay-based BC Stone Products. As of the end of 2018, Chinese companies FDI stock in Namibia was 490 million. In 2019, Chinese companies signed new project contracts with a total worth of 340 million and complete a turnover of 446 million.

There are two important and outstanding cooperation achievements in Namibia which no other African country can make comparisons to. The first project is the space science cooperation. Namibia just received the first Chinese female astronaut late last year, and nine years ago the first Chinese astronaut also visited Namibia as the first country because of the space science cooperation that exists between the two countries. The second is the space tracking station in Swakopmund. The tracking station has been in operation from 2000 and is a symbol of cooperation linking Namibia and China together for the peaceful use of space. Namibia will take full advantage of the traditional friendship, consolidate our all-weather friendship, deepen pragmatic cooperation and enrich and expand channels of communication between the two friendly nations and promote strategic development of bilateral relations.

The Vision 2030 is the country’s long-term plan, while the National Development Plans (NDPs) are the medium-term plans. So far, one Transitional National Development Plan and four (4) National Development Plans have been implemented, and currently the country is implementing the Fifth National Development Plan (NDP5). The NDP5 is emphasizing four pillars, that is, Economic Progression, Social Transformation, Environmental Sustainability, and Good Governance that are needed to industrialize and develop the country. In addition, so-called “game changers” have been identified that are critical for achieving national development goals. These include infrastructure development, increase in productivity in agriculture, skills development, and local industry development through local procurement support.

Guiding Namibia’s ambitious socioeconomic development strategy is the Harambee Prosperity Plan (HPP): a comprehensive blueprint for change. The HPP supports vital national initiatives like Vision 2030 and NDP5 (National Development Plan 5). As part of HPP and NDP5, certain business targets have been set by the government, including becoming more competitive and creating an environment that is more conducive to conducting business. In reports that rate countries on ease of doing business, competitiveness, institutional stability, corruption and so on, Namibia is rated high compared with other African countries and in some instances, even above the global average.

As a complement to the national development plan, the Harambee Prosperity Plan also intends to foster industrialization efforts of the country. One of the pillars in the Harambee plan is Economic Advancement that mentions specifically mineral resource beneficiation, agricultural processing, pharmaceuticals, metal fabrication, building materials, and automotive parts as promising industries for industrialization in Namibia.
The Growth-at-Home strategy (Ministry of Trade and Industry 2015), which is the industrialization roadmap of the country, explicitly mentions key sectors, such as agro- and fish-processing, steel manufacturing and metal fabrication, automotive, chemicals and jewellery, but also the green economy, building material and furniture, pharmaceuticals and cosmetics, that are going to be targeted. The strategy focuses on three strategic intervention areas: supporting value addition, upgrading and diversification for sustained growth, securing market access at home and abroad as well as improving the investment climate and conditions.

More recently, the Growth-at-Home strategy has been complemented by an Industry Growth Program that intends to foster economic growth and employment in the manufacturing sector. As part of that program, ten sectors that offer promising growth and investment opportunities in the country have been identified. The Industry Growth Strategies focus on identification and promoting growth and investment opportunities in the following ten selected industries: charcoal, seafood, leather, metal fabrication, cosmetics, Swakara wool, jewellery, game meat, taxidermy, and handicrafts. For each of these industries, a detailed industry growth strategy has been established.

Namibia’s long-term Plan, Vision 2030, is the country’s long-term Plan that stipulates the high-level targets comes the year 2030.Vision 2030 was broadly designed to be implemented through the National Development Plans, from the 1st Plan to the 7th. Namibia has so far implemented four National Development Plans (NDP1-NDP4) out of seven, while the implementation of the 5th National Development Plan is in its 3rd year of implementation (2019/20).

On micro level Namibia continues to pursue cooperation agreements with China in the areas of Agriculture, Infrastructure Development, Healthcare, Tourism to name a few.
These agreements are aimed at facilitating trade in goods and services, within the FOCAC frameworks as well as the Belt and Road Initiative but the agenda driven by Namibia and its needs. Namibia also provides tax-based incentives for manufacturing and exporting enterprises and is in the process of setting up a Special Economic Zone at the Port of Walvis Bay. Namibia is experience growing interest from investors in the port town of Walvis Bay thanks to the expansion of the port facilities by China Harbour Engineering Company. The expansion of the Walvis Bay port is expected to also cater for other land logged countries in SADC including Zimbabwe, Zambia, Botswana and Democratic Republic of Congo. Besides the incentives Namibia provides numerous opportunities for international investors in the following areas:

Infrastructure and Logistics: Namibia has embarked on a large-scale programme of renewing and developing its infrastructure. Investment opportunities may take the form of public-private partnerships (PPPs) either on a per project basis or with equity holdings. Certain utilities may be wholly owned by investors. Current focal areas are the development of water infrastructure, power generation and transmission infrastructure, as well as the transport and logistics infrastructure, notably road, rail and port with an emphasis on corridors to SADC states.

Serviced Land and Housing: Namibia currently has a deficit of affordable serviced land and housing. In its fifth National Development Plan, Namibia targets to service 6,500 erven and construct 7,200 houses annually, between 2017 and 2022. All these efforts are to reduce the number of households living in improvised houses to 12%, from the current level of 19%. Accordingly, there are opportunities for investment and operations in this field.

Manufacturing and Market Access: Namibia provides preferential incentives to manufacturing enterprises, particularly those that add value to local commodities. It facilitates access to the other 14 SADC member states. The SADC region has an estimated population of +/- 280 million. Physical trade is managed by the Walvis Bay Corridor Group which oversees transport corridors to SADC markets. Namibia also has duty and quota-free access to the Southern African Customs Union (SACU). A wide range of trade agreements has been signed with various blocs and nations of the African continent. Chief among these are AGOA with the USA, the EU-EPA and the Cotonou Agreement between the EU and ACP states.

Agriculture: To prepare for climate variability and mitigate drought, climate change adaptive technologies are required for crop production. The Government of the Republic of Namibia is guided by long-term development objectives as outlined in National Development Plans (NDPs) and Vision 2030 strategy. The mandate of the Ministry of Agriculture, Water and Forestry is the promotion, development, management, and utilisation of agricultural, water and forestry resources. It is, therefore, the objective of the Government to ensure agriculture productivity and food security in line with Vision 2030.

A strong and an efficient agricultural sector would enable the country to feed its growing population, generate employment and foreign exchange, and provide raw materials for industries and a market for industrial products. This will also see to it that the Harambee Prosperity Plan’s objective on “improving agricultural output” is realised.

Health and Social Enterprise: Namibia values private social engagement, particularly specialists in health and education, to augment public provision of social services. In the area of healthcare there are many opportunities for health infrastructure such as hospitals, clinics, but also medical equipment, biotechnology and manufacturing of pharmaceuticals.

Tourism: Namibia is a popular travel destination and investment in tourism is welcomed, especially in accommodation facilities. Further opportunities exist for PPPs in community conservancies. Therein lies the opportunity for Chinese investors to use Namibia as a springboard into the African continent both for trade and investment. Namibia’s objectives in China are to:
1. Promote tourism, trade and Investment.
2. Talk and discuss about investment opportunities and Namibian products.
3. Encourage the market access for Namibian products and services.
4. Create a conducive working relationship with the businesspeople and government
officials.
5. Participate in trade and investment promotion events, workshops, and seminar to form a business network to give the opportunity to converge with other local business proprietors.
6. Networking in trade fairs between Namibian and Chinese businesspeople.
7. Organize investment and business presentation to represent the project pipeline to interested investors.
8. Reach out to investors with specific investment opportunities through people to people contact, from stakeholders, government and businesspeople.
9.To promote Namibia and raise awareness of the country.
10.The focus will be also to share knowledge and information, exchange ideas, experiences and familiarize with Chinese business people.
China continues to find Namibia an attractive investment market with companies from that country investing billions of dollars, mainly in the mining, construction, stone processing, retail and cement sectors. One of the most obvious and visible signs of Chinese business activity in Namibia are the small- and medium-sized retail outlets commonly referred to as ‘China shops’. Owned and operated by Chinese nationals, these businesses can be observed in most urban areas country wide. These retail outlets sell a vast array of consumer goods including bags, electronics, shoes, motorcycles, textiles, electrical appliances, cigarettes and computer software.

In terms of industrial investments, China has made one of its largest investment in Africa through the investment in the Husab Uranium mine. The development of Husab mine is envisaged to fuel the clean energy initiative in China and at the same time boost the Namibian economy. Namibia is rich in uranium resources, with Husab being the biggest uranium deposit discovered to date and expected to operate for the next 30 years.

Husab has contributed a total amount of N$1.2 billion in tax revenue to Namibia, including royalties, withholding tax, PAYE and other taxes. Husab mine will boost Namibia’s GDP growth by about 5 percent and increase the country’s export volume by about 20 percent, making Namibia the third largest uranium producer in the world when it reaches nameplate production. Currently Husab has a staff complement of more than 1,700 employees, of which Namibians make up the vast majority (97%), Chinese nationals (2%) and other expatriates (1%).

BC Stone Products (Namibia) is a dimension stone mining, processing and marketing company which was established in 2014. The factory is part of the Chinese international corporation, Best Cheer Stone Group. BC Stone Products, which has trained and employs 300 Namibians, aim to use Namibian stone resources to process and produce locally and to provide high quality stone products for the Southern African market and beyond. The company’s stone products are used for applications on walls, floors and kitchen counter tops.

Nami Prefabricated Housing is a Chinese manufacturing company that has been inexistence in Namibia since 2011. It has a complete set of production line, including prefabricated wall panels, affiliated steel structure, aluminium and roof sheeting. The company’s products are used to cover factories, houses and mobile offices.

Namibia as a springboard and service center for neighbors Zimbabwe, Botswana, Zambia, along with Angola. As a member of SADC and SACU (Southern African Customs Union), the country is certainly ideally placed to become the destination of choice for leading investors. With vast experience in deploying soft power and in fostering trade, Namibia’s strategic position affords international investors intelligent access to markets within the Southern African Development Community (SADC) as well as within the framework of the African Continental Free Trade Area. Namibia is ready for business and looks forward to entering win-win partnerships with all prospective Chinese investors.

His Excellency Elia G.Kaiyamo is the Ambassador of Namibia in China

Source: China Investment Magazine.