Namibian Economics to the Point – April 2018 - Namibia Safari and Lodges - Gondwana Collection

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Namibian Economics to the Point – April 2018

Avatar of inke inke - 27. April 2018 - Economics

Iran’s Foreign Minister Mohammad Zarif (left) and Namibia’s Trade and Industry Minister Tjekero Tweya at the joint business forum in Windhoek. (Photo by: Iran Daily)

Brigitte Weidlich

In April very good rains were recorded across most parts of the country, much to the relief of the agricultural sector. President Hage Geingob travelled to China for a state visit and was accompanied by a large business delegation of seventy people. Government has scrapped the 25 percent clause for black economic empowerment (BEE). Another economic highlight was the visit of a large business delegation from Iran. Namibia’s inflation for March remained at 3.5 percent, the same as February, according to the latest data from the Namibia Statistics Agency. The Agency also announced that Namibia’s economy contracted by 0.8 percent in 2017. Growth for 2018 is projected at around 1.4 percent. The central bank kept its repo lending rate unchanged at 6.75 percent. 

Namibia strengthens ties with China and Iran

The Namibian government has within a single month, deepened and strengthened its ties with Russia, China and Iran, three old friends from the liberations struggle days. After the blitz visit of Russian Minister Sergey Lavrov to Windhoek in March, Iran’s Foreign Minister Mohammad Zarif this month made a day-long stopover with over a hundred business people on his four-nation trip. 

President Hage Geingob returned from his state visit to China on 3 April, accompanied by several Cabinet ministers and a large business delegation of over seventy people. In Beijing, Geingob and his Chinese counterpart, Xi Jinping agreed to elevate the bilateral cooperation between Namibia and China to the highest level to that of a “comprehensive strategic partnership” to reinforce cooperation in all areas. Several agreements and protocols were signed in the fields of infrastructure, financing and agriculture. No figures were disclosed about possible grants and loans Namibia will receive except that four schools will be constructed in Namibia with funds from China. 

Namibia will soon export beef to China, being the first African country to do so. Namibia already exports fish, oysters and table grapes to China apart from wood logs, uranium and lithium among others. China’s existing space tracking station outside Swakopmund will be enlarged. 

The Namibian delegation also visited China’s economic hubs Nanjing, Suzhou and Shanghai. Two business forums were held in Beijing and one in Shanghai, which provided a networking platform for Namibian and Chinese business people. Trade promotion agreements were signed between the Namibia Chamber of Commerce and Industry (NCCI) and several Chinese business and trade organisations. Chinese businesses showed interest to invest in a planned 400-hectare industrial park outside Walvis Bay.

“Namibia attaches great importance to its relations with China. Our relations have stood the test of time, remaining steadfast in times of upheaval, a true example of an all-weather friendship,” said Geingob.

President Xi Jinping stated that what mattered was not the “size of our two countries, but trust and strengthened consensus.” Geingob invited Xi Jinping to visit Namibia. 

Bonding with Iran

On 12 April, Iran's Foreign Minister Mohammad Zarif made a one-day stopover in Windhoek, accompanied by over a hundred Iranian business people. Minister Zarif told his Namibian counterpart, Netumbo Nandi-Ndaitwah that Iran wanted to conduct more trade with Africa. Namibia was the gateway to other African countries for Iran. In the same way Iran could become a gateway for Namibian products to Arabic countries. Zarif said the Islamic Republic of Iran was the first country to officially recognise the SWAPO Party, today’s ruling party, as a liberation movement and supported its struggle for independence. SWAPO had an office in Tehran. 

Zarif informed Nandi-Ndaitwah and the joint business forum with Namibian and Iranian private sector entities that his country was interested in energy, liquefied gas storage, water, construction, agriculture and modern technologies. An Iranian company plans to set up tractor assembly plant outside Windhoek. 

The Iranian government has a 15.2 percent shareholding through its Iran Foreign Investment Company (IFIC) in the Rössing uranium mine outside Swakopmund. This dates back to the days of Shah Reza Pahlavi. However, Namibia abides by the UN sanctions against Iran and does not supply uranium to that country.

25-percent NEEEF clause scrapped

The government has abandoned its plans to make it compulsory for all private sector companies to sell 25 percent of ownership for formerly disadvantaged Namibians. President Hage Geingob announced this during his annual State of the Nation Address (SONA) in Parliament in 11 April. “The 25-percent equity stake will not translate into broad-based empowerment and is done away with,” the President said. He added that the Office of the Prime Minister would provide feedback in May to stakeholders on the Cabinet decisions about the National Equitable Economic Empowerment Framework (NEEEF), which will be tabled in Parliament as a draft law before year-end. 

More investments

The agricultural supply company Agra has re-opened its renovated and enlarged branch in Maltahöhe, west of Mariental. The re-opening was celebrated with a customer day. Agra has embarked on a new concept for this particular branch and sells fresh produce there. The Maltahöhe Agra branch now supplies tourism lodges in area with fresh produce.

Sky Investments opened a new diamond cutting and polishing company in Windhoek this month. It employs 53 people. Sky is owned by the KGK Group based in Hong Kong. The Namibian diamonds processed at the Windhoek facility will be marketed in eighteen countries. 

A new mining company in Namibia, Desert Lion Energy has shipped its first ever lithium-ore destined for China through the port of Walvis Bay. The 30 000 ton consignment is the biggest single lithium concentrate shipment ever exported from Africa. Production will be ramped up to 280 000 tons annually, the Canadian company’s CEO Tim Johnston said. When that goal is reached, a lithium-carbonate factory will be erected at Walvis Bay. Lithium is crucial for the production of lithium batteries for electric cars, renewable energy plants and smart phones. The company has so far invested N$120 million (about 8 million Euros) into the mine and created one hundred jobs.

Namibia’s mining sector contributed about 12.2 percent to the country’s gross domestic product (GDP) in 2017. However, due to persistently low uranium prices over the past few years, one of three uranium mines on Namibia, Langer Heinrich Uranium (LHU) will be put under care and maintenance in early 2019. LHU is jointly owned by Australia’s Paladin Energy (75%) and China’s Overseas Uranium Holdings (25%).  The Trekkopje uranium mine, also in the Erongo Region is under care and maintenance since 2012.  

The envisaged Kudu Gas Power Station near Oranjemund will be reduced from 885 mega watt (MW) to only 442 MW according to deputy Mines and Energy Minister Kornelia Shilunga. She disclosed this during her budget speech in Parliament. The smaller power plant of 442 MW will be supplied with 60 million cubic feet of gas daily for 25 years. The gas will be brought onshore from Namibia’s Kudu gas field some 140 km off the coast. The downsizing of the gas-fired power plant was done after tow long-term gas sales contracts with Zambia and South Africa fell through.

New partnership in tourism 

Local tourism company Gondwana-Collection has announced a partnership with retailer CYMOT to jointly promote Namibia as a prime outdoor tourism destination. Founded seventy years ago, CYMOT specialises in camping equipment and supplies for outdoor living like fishing gear, hiking and mountain biking as well as automotive gear for those trips off the beaten track. Gondwana-Collection has numerous lodges and top-range camping (glamping) spots virtually the most beautiful locations in Namibia where mountain biking, fishing and hiking is offered. “Gondwana provides the location and CYMOT the equipment,” says Mannfred Goldbeck, Gondwana’s Brand and Marketing Director. “The co-work was decided upon to bring a shared vision alive to the brand Namibia,” notes Gabriela Raith, CYMOT’s Marketing Executive Consultant. Both companies will soon launch a joint website to provide information about outdoor activities in Namibia and the necessary equipment for those adventurous trips.  

Winter time finally abandoned

Namibia has done away with winter time, which was in place for 14 years and used to start in April. The country keeps its standard time of two hours plus GMT throughout the year.

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