Government will spend N$98.8 million during the current financial year to improve energy supply in the country. This was announced by Minister of Mines and Energy Obeth Kandjoze announced on Wednesday while motivating the budget of his ministry in the National Assembly.
Kandjoze said the country’s over-reliance on electricity imports poses a threat to the country’s strategic vision and industrialization. The minister assured the nation that the country is secured with electricity supply from 2016 to 2019. “The energy demand-supply balance has now evolved, and going forward we can no longer continue to rely on surplus generation from the region,” he said. He said the ministry will continue with its rural electrification programme, with N$67 million budgeted for the programme in the 2016/17 financial year. In 2015, Kandjoze said 110 public institutions, 340 households and business centres have been electrified countrywide.
Export earnings hit N$25 billion
The country’s mining sector managed to rake in N$25 billion in export earnings last year, said Kandjoze. Further announcing that N$1 billion was derived from royalties, Kandjoze warned that the continued declining commodity prices and weak demand for exports will negatively impact on the performance on the mining sector. “Effective implementation of an extraction software on an annual basis to legislate against unwanted or expedited production profiles are required urgently. Escalating electricity and water prices also increase operating costs for mining companies,” he said. Kandjoze also gave an update to parliament on the ongoing negotiations on a Sales and Marketing Agreement with De Beers that will pave the way for increased supply of rough diamonds to the local diamond manufacturing industry. He said the negotiations have been finalized. “The new agreement will supply about half of Namibia’s diamonds of all sizes, shapes and qualities to local manufacturers. This would allow factories to operate at full capacity, create more jobs and enhance their profitability and sustainability,” said an optimistic Kandjoze.
He said the new agreement will also allow for the creation of a fully state owned Diamond Sales and Marketing company. “Its mandate will be to sell a 15% representative cut of Namdeb Holdings’ rough diamond production while the same outfit will establish a Namibian diamond brand in the downstream market,” he said adding that the process of establishing the envisaged company is already underway. Kandjoze is however worried over the lack of diamond inspectors and resources, saying the precarious situation hampers government’s fight to combat illicit trade of diamonds. In the proposed budget, the ministry has set aside N$10.8 million to protect Namibia’s diamond industry through monitoring, facilitation and regulation. “Even after a century of diamond mining in Namibia, and the depletion of most diamond resources onshore, diamonds continue to contribute disproportionately to the State Revenue Fund,” said a concerned Kandjoze. According to the minister, in the last financial year Namdeb Holdings(Pty) Limited contributed N$3 billion to state coffers in the form of taxes, royalties, dividends and Non-Resident Shareholders Tax. Kandjoze said N$9 million will be spent on capital projects to upgrade and enhance prospecting and mining equipment and vessels to ensure that additional diamond resources can be unlocked.