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Saturday 16 December 2017
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Namibia’s elusive retail dream

Though the Namibia Trade Forum’s (NTF), recently formulated retail charter will go a long way in reducing Namibia’s overreliance of exports for basic commodities and consumables, its benchmark is still elusive due to low demand of local products and under-capitalisation for start-up Small and Medium Enterprises, an in-house survey has found.
Ironically, the overeliance on exports has in most cases left Namibia exposed to external inflationary pressures from South Africa which supplies the bulk of the consumables to Namibia.
A survey conducted by The Patriot at one of the local supermarkets in Windhoek indicates that, the influx of foreign goods is squeezing out local products from the shelves creating a challenge for local manufactures who struggle to sell their produce. This is so because, locally produced consumables have a low demand and are generally more expensive than imports. Thus, locally produced products are unable to meet the retail charter benchmark of 20%.
NTF Chief Executive Officer, Ndiitah Nghipondoka-Robiati however reiterated that the retail charter will address the deficit between Namibia’s imports and exports especially from South Africa which contributes 75% of Namibia’s consumables because of Namibia’s lack of a viable manufacturing industry since independence.
Although Namibia has been pushing initiatives including the growth at home policy, the drive has not fully stimulated the country’s full production in terms of producing for sustenance. “The retail charter though in its infancy is one of the strategies to encourage Namibians to produce, by making it a condition for retailers to source locally. The idea is that when manufacturers or producers know that the barriers to entry of their products have been removed, it gives an incentive to produce more as one will have a guaranteed demand,” she said.
The retail charter, which emerged from the successful experience of the Horticulture Sector Initiative, is aimed at raising local procurement from 6% of purchases of all retailers, traders and hospitality sectors up to 20%, thereby boosting the National Development Policy, where it sets a target to increase the shelving of Namibian products on the shelves.
The Horticulture Development Initiative through its Namibian market share promotion scheme, has seen over a 10 year period an expansion of local sourcing of horticultural products from 5% of local consumption to around 50%.
Statistics from Ministry of Trade and Industry show that Namibia’s trade on imports stands at N$17 million in the second quarter of 2017. During the 2015/16 financial year, 49 859 tonnes of farm produce which amounts to (N$503 million) were imported into the country and this, according to available data, may be attributed to the negative effects of drought experienced the past two years.
An analysis of prize comparison shows that, some of these locally produced items like olive oil, top score mealie-meal, cheese, nuts, body scrub and coffee are generally higher than imported products. Locally produced olive oil is pegged at N$123.20 vs imported one at N$89.99, Mbiri body lotion 400 ml is N$110 vs Vaseline and Nivea 400 ml body lotion which is under N$60, Mr Nuts 500g is N$188 vs South African 500g nuts under N$95 and other selected products.
Despite providing goods and services, the fundamentals of every business is to make profit and at the heart of it, is costing. Utilities in Namibia are expensive because the system has not expanded in tandem with the population or industrial growth.
“The reason why Namibians products are generally more expensive than imports, especially in case of poultry is that, the production cost which is stock feed is imported at cost that includes tariffs, an additional level that is charged on imported like products. For this reason, a quantitative restriction measure is used which allows imports of products that we are not capable to produce in that range”, explained Nghipondoka- Robiati.
The survey further indicated that local products are not able to sustain a family of four on basic consumables on a trolley basket pegged at N$4,500 per month. In response to questions send by this publication, Ministry of Agriculture, Water and Forestry (MAWF) Permanent Secretary, Percy Misika assured consumers in respect of horticultural produce that, “through the policy and strategic framework of the Agricultural ministry, the government has programmes like Green Schemes Projects, Conservation Agriculture and Dry Land Crop Production aimed at increasing food production as well as productivity. For this reason, we are providing farmers with affordable subsided ploughing and weeding services and inputs such as improved seeds and fertilizers.”
The skewed trade deficit has in the past created severe pressure for the country to maintain sufficient forex reserves which are normally pegged at three months’ worth of import cover especially now when Namibia is experiencing a liquidity squeeze.




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