Probing anomalies in Namibia

By Kelvin Chiringa
December 2016 & January 2017
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The Industrialisation, Trade and SME Development ministry has set itself on a new growth trajectory for Namibia’s ten picked sectors which forms part of the support to selected manufacturing industries envisaged by the Growth at Home Strategy, a blueprint that promotes opportunities and industry competitiveness.

As the year comes to its close, Prime Focus draws attention to the country’s handicraft and charcoal industry and brings to light what the ministry has concluded as challenges facing the national growth strategy mooted by Immanuel Ngatjizeko and his team.

The industry stakeholders’ vision is such that by 2020, the Namibian craft sector will have, in a coordinated manner created a footprint, identity as well as seized national and international markets while at the same time improving products, skills and artisan livelihoods.
However, latest research has shown that in spite of the EU standing out as one of the most lucrative markets for gifts and decorative articles and ranking as among the top consumers, Namibian products still have a low presence in export markets while they are almost non-existent in the home décor market.

Observations have been made that since there is no sector brand footprint, most EU/USA buyers have no knowledge of Namibian crafts while the ministerial position is of the notion that currently small ranges are being traded in niche specialty stores.

According to a report on the Growth Strategy for the handicraft sector compiled by the Industrialization, Trade and SME Development ministry, while raw materials can often be procured in an environmentally sustainable way, there is still a lack of cooperation in the sector with regards to a joint sourcing of common inputs.

The prospects for growth are encumbered further by a technology and cutting edge innovation deficiency which translates to the current production capacities of most individual producer and small artisan groups being small and not “stable enough for exports.”

These  have been noted by the ministry as, “often insufficient for establishing business linkages with local traders, wholesale and retail,” as such the remedy has been identified as stimulating productivity by technical benchmarking information and regular exchange among producers regarding technical skills.
Further inhibitions to the sector have been linked to skill gaps, inappropriate financial services and information deficits while growth is further obstructed by poor infrastructure.

All this comes in the wake of Ngatjizeko proclaiming, “The industry growth programme is an important element of the war against poverty and a further step on Namibia’s path towards becoming a highly competitive industrialised nation with sustainable economic growth as depicted in vision 2030.”

The charcoal industry
Total production volume in charcoal is projected to grow by 60% to 200 000 tonnes by 2020 while Namibia’s international ranking as a competitive charcoal exporter has been set to be on position 10 by 2020 from 13 in 2014.

The growth course is further estimated to see the growing of direct employment in different value chain segments by at least 25% while the growth of exports by value is envisioned to grow from USD 25 million (2014) to USD 42.5 million p.a. (current prices) by 2020.

However, in spite of these ambitious projections, the charcoal sector still face challenges especially considering the fact that the majority of producers have not as yet migrated to a mechanized system of harvesting timber.

In the same light, it has been observed by captains of the industry that there are no specific finance initiatives attached to the sector from any of the major finance institutions.
Further observations made border on the notion that the local charcoal industry still lack a real technical standard-setting authority which prompts individual processors to negotiate quality parameters with buyer parties.

“The current practice of quality specifications being agreed upon between supplier and buyer do not lead to the definition and application of unified quality specifications and the establishment of common quality control mechanisms within the industry and increases transaction costs for the stakeholders,” the Industrialisation, Trade and SME Development ministry has cited.

In the meantime, the ministry is faced with the challenge of implementing, among other strategic objectives, the increasing of the industry’s contribution to debushing by means of improved production, planning and sustainable management of the natural resource base.

It also has to deal with achieving higher production efficiency while increasing local value addition and promoting cleaner production by means of successful process and product innovations.