ENTREPRENEURIAL ENERGY AT ITS PEAK
THE Ministry of Trade and Industry (MTI) drew a first with its “open door” policy when it ran a series of Open Day public consultations for the local business community across the country during the course of 2010.
During these consultations, the Minister, Dr. Hage Geingob, led his staff to all the 13 regions of the country where he met and interacted with the business community and general public on matters pertaining to trade and industry.
Members of the public had their queries answered on the spot by the minister and the departments that directly deal with the issues on which the queries were raised.
Besides taking the ministry’s service closer to the people, the Open Day exercise also enabled the minister and the ministry to have a better and closer understanding of the nature of the challenges faced by the business people in various parts of the countries, especially SMEs, and their specific needs.
According to the Deputy Permanent The ministry is exploring the possibility of opening one-point business information centres in all the regions as a result of these public consultation events.
The Open Day was first held in Windhoek (Khomas Region) in June 2009, followed by Ongwediva (Oshana Region) in August 2009.
All the remaining regions were visited during 2010, with the Erongo Region (Swakopmund) being the last one to be visited on December 8, 2010.
The business community and general public expressed great appreciation for the Open Day consultations and the valuable services rendered in the process. This public outreach initiative has showed that Namibia has significant entrepreneurial energy. As such, it will be continued in the coming year, albeit in a slightly improved form.
The other major activities that were carried out by the minister and the Ministry staff during the year under review are as follows:
Investment Promotion and Facilitation
One the major highlights of 2010 in the area of Investment Promotion and Facilitation is that the minister, with approval from Cabinet, published a gazetted notice that prohibits foreign investments in the sectors of retail, in-town transport, hair dressing and salons, with the aim of removing competition from foreign players against Namibians in these generally low capital-intensive sectors.
The year also saw the facilitation of some 21 Foreign Direct Investments (FDI) into the country in the sectors of construction, automotive services, tourism and agriculture with a combined investment capital value of N$ 1, 2 billion.
Such investments have created some 1,150 direct jobs.
The year under review also saw the facilitation and hosting of 12 inward trade and investment promotion and exploratory missions from countries such as China, USA, Japan, Slovak Republic, Poland, Turkey, Germany and South Africa.
There was intense mobilisation and facilitation of some 13 outward trade and investment promotion and seeking missions from Namibia to countries such as Brazil, Ghana, China, Tanzania, Turkey, RSA, USA, and Zambia.
Such missions provided exposure and opportunities to Namibian entrepreneurs to forge joint venture partnerships as well as to establish new sources of imported products and market for their products, thus providing alternatives to the current or traditional markets and sources of imports.
The year also saw the commissioning of the drafting of a new Law on Investment with technical assistance from the United Nations Conference on Trade and Development (UNCTAD), which unlike the current Foreign Investment Act, 1990, will provide for the promotion and facilitation of both domestic and foreign direct investment.
The law will also unambiguously spell out the economic sectors or activities, which, in response to the wishes of the Namibian government and public, will exclusively be reserved for Namibians and those where foreign investments will be required or allowed with or without local joint venture partners. This legal framework will also make it a requirement for all investors to register with the ministry’s Investment Centre for statistical and regulatory purposes, a provision which is not explicitly provided for in the current law.
The ministry produced about 9,000 CD promotional materials that were used to market Namibia as an attractive investment location on the African continent. The materials were used during scheduled investment promotion seminars at home and abroad, while others were disseminated through the Namibian diplomatic missions and commercial offices that are stationed in various parts of the world.
The main activities planned for 2011 under this aspect include the restructuring of the ministry’s organisational structure to ensure that it is in line with and will enable the execution of the assigned mandate as well as to the re-alignment of its departments and agencies in order to ensure improved operational coordination, performance, and service delivery.
The ministry also plans to develop a more comprehensive Investment Promotion and Marketing Strategy that will target both domestic and foreign investors, and focus on the promotional effort in selected economic sectors such as manufacturing and the services sectors. The strategy also looked at countries that were identified as the main sources of outward investment and the specific companies that have a demonstrated interest and involvement in the identified sectors.
This targeted investment promotion approach is more effective and can yield better results than the open seminar/workshop approach, although the latter will still be used in some instances.
In the coming year (2011) there will be a completion of the drafting of a new law and regulations on investment; increased stakeholders’ consultation and creation of an investment stakeholders advocacy consultative platform and the re-alignment of the various agencies and departments responsible for investment and business promotion and facilitation, in order to ensure a more effective execution of the function and improved results.
International Trade and Export Development and Promotion
There were major highlights in the area of Regional Economic Integration and Market Diversification under International Trade and Export Development and Promotion in 2010.
The successful hosting of the first ever Summit of Heads of State and Government in August, as well as the celebrations of SACU’s 100th Anniversary and the launch of the new SACU Vision and Mission in April, as well as the unveiling of the site on which the SACU headquarters will be constructed in Windhoek, mirrored the year.
The 30th Jubilee SADC Summit in August 2010 in Windhoek saw President Hifikepunye Pohamba and Dr Geingob assume the chairmanship of both SADC and the SADC Council of Ministers, respectively.
This means that Namibia will drive the agenda of the regional body for the next 12 months, effective August 2010.
Namibia also took part in the Shanghai World Expo 2010, where its pavilion attracted a lot of visitors from China and other participating countries. During the course of the Expo, Geingob led an 89-member Namibian official and business delegation to Shanghai to participate in the Namibia Business Week, which took place from 21-29 August 2010.
The event was attended by over 100 Chinese business people and was used to showcase various business, touristic and cultural aspects of Namibia.
MTI continues to lead Namibia’s participation in the negotiations of an Economic Partnership Agreement (EPA) with the European Union as part of the SADC group.
Namibia has initialled but not signed the Interim EPA due to a number of concerns about the likely negative implications of certain provisions of the proposed Partnership Agreement on the country and its economic development and regional integration interests and ambitions.
Various rounds of negotiations took place during 2010, and the SADC group, to which Namibia is a member, and EC have now agreed to proceed with the negotiation of a final EPA and also that the unresolved issues that were agreed upon at the negotiation round that took place in Swakopmund in 2009 will be included in the final EPA. The ministry views this development as crucial and a major step towards the conclusion of the EPA negotiations.
In November, Namibia hosted the 2010 Economic Bilateral Meeting of the Heads of State and Governments of Namibia and South Africa in Windhoek.
The bilateral meeting was established to enable the Heads of State of the two neighbouring countries to consult and exchange views on economic matters of interest to the two countries.
At this year’s meeting, South Africa and Namibia agreed to not only elevate and expand the consultations beyond economic matters, but also to include all other areas of cooperation. In this regard, the consultation forum was renamed the “Bi-National Commission”.
SADC, the Common Market for Eastern and Southern Africa (COMESA) and the Eastern African Community (EAC) agreed to negotiate a tripartite free trade agreement (FTA), which if realised will provide companies in member states of the three regional economic blocks wider market access, and will be a great step towards deeper regional and continental integration.
Trade facilitation and capacity development
The highlights in the area of trade facilitation and supply-side capacity developments during 2010 were as follows:
The provision of financial and logistical support enabled local entrepreneurs, most of them SMEs, to take part in and exhibit their products and services at trade fairs and expositions in the various regions of the country Eenhana, Helao Nafidi, Gobabis, Ongwediva, Okakarara, Otjiwarongo, Rehoboth, Keetmanshoop, Katima Mulilo and Windhoek and also abroad in such countries as Angola, Zambia, Zimbabwe, South Africa, China, France and Germany.
The MTI stand at the 2010 Ongwediva Annual Trade Fair was voted the ‘Best Exhibitor’ in the Government Category.
In its new product development drive, the ministry engaged the services of a renowned South African art and craft expert to build the creativity and innovative capacity of Namibian craft producers at a workshop. The participants were drawn from all the regions of the country. The positive result of the workshop is a great improvement in the quality of the products made to the extent that the products are now been displayed at the National Arts Gallery and on sale at curio shops.
The ministry also provided advisory services to and assisted various individual producers/SMEs to improve the quality and packaging of their products in order to make them attractive to and meet quality requirements of customers and large retail shops. One of the beneficiaries of the ministry’ product development support is Tuli Line Cosmetics, which was assisted to source a cosmetics product development specialist from the Netherlands. As a result of this support, the company’s products have found a permanent space on the shelves of most retail shops in the country.
Major plans for 2011 in the area of trade facilitation and capacity development include the full establishment of the Namibia Board Trade (NBT) in keeping with SACU obligations. This will be responsible for setting and administering trade tariffs as well as investigating and taking remedial actions against anti-dumping.
The ministry also plans to construct trade centres in Angola, the Democratic Republic of the Congo (DRC) and the Republic of Congo (Brazzaville), that will be made available to Namibian entrepreneurs for the warehousing and distribution of Namibian export products into these regional markets.
As chair of the SADC organ, Namibia will host the SADC Extra-ordinary Summit in 2011 before handing over the chairmanship.
Creation of a competitive domestic economy
The MTI is always looking at ways of making Namibia a competitive domestic economy through innovative strategies in all its divisions. This means the provision of products and services that enable the growth of business in Namibia. During the course of 2010, the MTI made certain that there was ease of business and intellectual property rights registration, protection and awareness of domestic consumer issues as well as the setting up of a standards association.
As a member of the World Intellectual Property Organisation (WIPO) and the Africa regional Intellectual Property Organisation (ARIPO), Namibia undertook a number of initiatives aimed at creating awareness especially among the SMEs to issues of Intellectual Property Rights (IPRs). In this regard, Namibia hosted the ARIPO conference in August 2010 in Swakopmund, having hosted a workshop on the role of SMEs in IPRs earlier in June where over 50 SMEs attended.
In order to popularize IPR issues, the Ministry, with the consent of the World Intellectual Property Organisation (WIPO) translated and published information on IPR into the various Namibian languages. The translation booklets were launched at the workshop referred to above.
The Industrial Property Bill was also tabled in Parliament during the period under review.
In addition to the continuation of the automation and upgrading of the business and IPR registration system, the major planned activity in this area in the coming year (2011) is the establishment of a Business and IPR Authority for which approval has been obtained from Cabinet during the course of this year.
Domestic Market Competitiveness and Consumer Protection
The Ministry of Trade and Industry continues to provide financial and technical support aimed at strengthening the capacity of the Namibia Competition Commission (NCC), the national body which is charged with promoting and ensuring competition in the Namibian marketplace by taking any appropriate measures to enhance consumer welfare and against anti-competitive practices such as price-fixing and abuse of market dominance.
Following its official launch at the end of 2009, the Commission is fully operational. During the current year, it received notifications, investigated and made rulings on some 26 merger and restrictive business practice cases.
Standards and Quality Assurance
The MTI has continued to work on improving the capacity of the Namibian Standards Institution so that it can effectively render the certification services that used to be provided by the South African Bureau of Standards (SABS).
The Institution is carrying out inspection of fish and administers the compulsory standards specifications for chilled fish, canned fish, marine molluscs and crustaceans, frozen fish and marine molluscs, frozen rock lobster, frozen shrimps, langoustines and crabs, smoked snoek as well as other regulations for other food products.
Industrial and SMEs Development
The retail sector represents the largest portion of the country’s SMEs. As a result, it is a large source of employment although its contribution to the GDP remains minimal. The government, mindful of both of these facets has sought to promote both employment creation and industrialization activities with a view to improve contribution of the SME and manufacturing sectors to the country’s GDP.
The relevant government intervention measures over the period under review include the provision of infrastructure that makes it possible for the SME sector to thrive in business.
Provision of Affordable Business Infrastructure
In response the needs of SME for trading and industrial premises and the often very high cost at which such facilities are offered by private developers, the ministry planned and constructed a number of such facilities during the year and these include the completion of a multi-purpose trade fair and business centre or park at Okakarara, Otjozondjupa Region and an SME Business Park at Okongo, Ohangwena Region; commissioning of the installation of bulk site development and construction works for the planned Agro-food processing park at Oshakati, the business park at Oshifo in Ruacana; a new community Open Market at Onethindi, Oshana Region; a new industrial park in Okahandja; and a garment factory in the northern industrial area, which is aimed at providing employment opportunities of the former Ramatex employees.
Acquisition of land and completion of the concept designs for the construction of SME Community Markets in Tsumeb, Ongenga and Keetmanshoop was also part of these initiatives.
Productive Equipment and Technology Transfer
In response to the need for productive equipment by SMEs in the country, the ministry has devised a number of targeted equipment aid and sourcing schemes to assist SMEs to procure production equipment, technology and inputs either by linking them to cost-effective suppliers and by procuring and providing such equipment on a lease basis.
During the period under review a number of entrepreneurship development initiatives were carried out and some these include the awarding of production equipment and business advisory and mentorship services to more than 150 SMEs.
Some 12 feasibility studies and business plans were financed and carried for aspiring entrepreneurs and also training workshops in tender procedures and project costing for small contractors in groups of 30 each were conducted in most of the regions.
In addition, some 24 youth were trained and successfully completed a 6-months course in gemstone cutting and polishing at the ministry’s Gemstone Centre in Karibib. The trainees were quickly taken up by existing mineral processing and jewellery making companies.
A business plan development competition was sponsored by MTI assisted by the Polytechnic’s Business Innovation Centre targeting the youth as well as an Entrepreneurship Day for Grades 8 and 9 learners at Delta Secondary School in Windhoek.
Establishment of an SME Bank
The lack of affordable financing continues to be the main inhibiting factor to the effective growth and development of our SME sector. During the period under review, the ministry pursued consultations with the Bank of Namibia (BoN) and the Ministry of Finance with a view to secure the approval of a banking licence for the envisaged SME Bank by the Bank of Namibia.
In November 2010, the Bank of Namibia granted a conditional banking license. Preparations are underway towards meeting the set conditions and for the establishment of the envisaged bank. The SME Bank is expected to be fully operational during the course of 2011.
The ministry also hopes to complete the construction as well as commissioning of the various business support parks and facilities whose construction is underway.
Industrial Development and Diversification
Manufacturing and local value-addition
Namibia’s high dependency on exports of primary commodities and imported manufactured goods are largely attributed to the country’s small industrial base and a number of supply-side constraints on the part of existing firms. In this regard, the Ministry, with technical assistance from the United Nations Conference on Trade and Development (UNCTAD) and as part of a SADC-wide industrial improvement initiative, has facilitated the development of an Industrial Upgrading and Modernisation Programme for Namibia.
The programme seeks to improve the capacity of local firms in areas of production systems and processes, quality assurance, product development and marketing. The programme will be implemented in phases starting with a pilot phase that will focus on a few sectors namely agro-food, fish and mineral processing and pharmaceuticals, which include cosmetics and Africa traditional medicines.
The ministry, in keeping with a Cabinet directive, commissioned studies aimed at profiling business and investment opportunities in the Karas and Hardap Regions for self-employment community projects and other potential investors.
Major activities planned for 2011 under this scheme include the drafting of an overarching Industrial Policy for Namibia, and the implementation of the Industrial Upgrade and Modernisation Program (IUMP).