By Josef Kefas Sheehama
His Excellency Dr. Hage G. Geingob, President of the Republic of Namibia, announced a decisive end to the era of exporting raw materials from Namibia during his speech at the EU-Namibia Business Forum in Brussels, Belgium.
Article 100 of Namibia’s Constitution clearly asserts that “Land, water, and natural resources below and above the surface of the land and in the continental shelf and within the territorial waters and the exclusive economic zone of Namibia shall belong to the State if they are not otherwise lawfully owned.” This constitutional provision underscores the immense value of natural resources to the nation. Harvard defines a state as a political division of a body of people that occupies a territory defined by frontiers. In this context, the separation of powers assumes critical importance as it establishes a vital system of checks and balances.
The President’s decision to tighten regulations, and curb the export of raw minerals, is commendable. It signals the government’s commitment to encourage potential investors to explore value addition, fostering increased revenue and employment opportunities for the nation. This strategic shift aims to enhance the value of exports and stimulate domestic market growth, effectively addressing unemployment challenges.
In promoting economic partnerships, His Excellency demonstrates a strong commitment to building a more equitable and sustainable world by fostering cooperation and expanding areas of mutual collaboration. This approach seeks to create sustainable industrial clusters for both Namibia and the European Union. It is essential to revisit policy frameworks and solutions that provide the economy with the means to drive inclusive growth.
The investments we make today have the potential to transform current challenges into substantial opportunities with far-reaching global implications. This moment represents a significant opportunity for our country and the world.
The core objective of the policy and regulations is to halt the export of raw materials from Namibia. The rationale behind this decision is to prevent the wasteful depletion of foreign exchange, retain local jobs, and maximize the value derived from these resources. Processing raw materials locally will create wealth and bolster the nation’s economy. Therefore, this policy reform encourages foreign investors to establish processing plants within Namibia, inevitably leading to job creation and economic diversification.
Namibia’s mining sector remains a vital driver of sustainable economic development, significantly contributing to exports and fostering critical linkages with other sectors. It’s imperative to acknowledge that our mining industry is underdeveloped, resulting in the export of raw materials. The capital and technological resources required for large-scale mineral exploration, extraction, processing, and marketing are often insufficient.
While some may express concerns about the potential impact of reduced mineral trade volume, especially with other African partners, the long-term success of the policy depends on effective implementation. It is crucial to recognize that Africa is a significant source of raw materials used in various industries, including green technology. Africa’s ability to control the pace of importing and exporting such materials can be a powerful force.
The export of raw materials is unsustainable, and potential investors should create jobs and transfer skills to benefit Namibians. While policymaking is in place, the real challenge lies in implementation. If policy reform discourages raw mineral exports, additional measures must be taken to ensure that Namibians reap more from their resources.
This policy shift is designed to encourage the development of value chains. According to the United Nations trade database, Namibia exported raw materials worth N$88.8 million (US$4.9 million) to Australia in 2021, while the EU imported raw materials valued at N$129 million, along with fuels and mining products worth N$2.2 billion from Namibia. This trend leads to a loss in revenue, as raw material exports fetch lower prices compared to finished products, which are imported at significantly higher costs.
To empower traders to add value, Namibia’s Minerals Policy should undergo reform. This reform will encourage foreign investors to embrace value addition, effectively transforming traders into industrialists and boosting domestic economic activities. The ban on raw material exports will stimulate the construction of processing facilities in Namibia, enabling the nation to claim a more substantial share of the value chain. Namibia, a leading producer of zinc with reserves of fluorspar, is estimated to become the third-largest lithium producer in Africa by 2026.
Thus, a strategic partnership centred on critical minerals promises to be mutually beneficial, fostering an economically transformative alliance.
