According to the latest statistics as provided by the Namibia Statistics Agency, it depicts that Namibia’s exports to Angola declined by 80% during the period of 2015 to 2016. This decline caused a combined trade loss of N$ 3.2 billion Namibian dollars over the two-year period. Previously from 2008 to 2009 Namibia experienced positive growth on trade with Angola but recently the situation deteriorated. Angola has a population of more than 28 million compared to Namibia’s 2 million people, which supplements the population gap.
Reductions in trade cannot be entirely blamed on Namibia’s deteriorating relationship with Angola but also other systematic and regulatory issues prompted the withdrawal of Namibian businesses from Angola.
In 2009, automotive exports were as high as N$ 1.4 billion and later reduced to a mere N$ 78 million in 2016. Our domestic automotive industry is over-saturated and can only experience growth if we maintain exports in the existing SADC market. Machinery and earthmoving exports dropped from N$ 580 million in 2014 to a mere N$ 30 million in 2016. The other export sectors that encountered losses are meat, live cattle, clothing and furniture exports.
Further statistical analysis has revealed that in 2015 alone, overall exports to Angola dropped by 44% and exports slumped by 80%, in the same year. In 2009, exports to Angola reached N$ 5.5 billion, which was equivalent to 5% of the Namibia’s GDP at the time.
To remedy this situation, Namibia should revisit its strategies and implement more resilient and favourable bilateral treaties. They should also tackle trade facilitation concerns and reduce barriers in logistics, handling, payments, funding, manufacturing, etc. Increasing exports also attracts growth in cross border services, such as medical, travel, tourism, hotel, real estate, finance, housing, education, communication, etc. Services creates a strong potential for domestic job creation. The bilateral treaties should not be one sided but promote job creation to improve livelihoods in both countries.
Trade encourages funding for infrastructure development such as roads, rail, logistics and shipping, while adjacent losses will hinder our development goals in these key sectors.
Positive trade gains motivate a country’s manufacturing sector, and bolsters the fiscal and monetary position as customs revenue will increase.
The Angolan kwanza currency is struggling to build a reputation in Namibia’s economy while 1N$ equals 12.5 Angolan Kwanza. Additionally, the withdrawal of the US dollar by the American government has left Angola with serious challenges.
Continuous efforts of linking Angolan banking presence in Namibia in attempt to smoothen currency coherence did not materialize because of non-prudential misgivings and high risks. Namibia should also adopt measures to mitigate and monitor trade fluctuations and impose interventions to protect the interest of the private sector.
Namibia’s economic footprint can grow within the SADC region with 280 million people but this requires stronger policy position that is robust enough to resist regional shocks and political instabilities. Recently, the country forked out billions of Namibian dollars to expand the Walvis Bay port and introduced a number of transport networks. The export downturn is alarming and will affect government’s development goals.
The formula for SADC’s trade wealth is within the region and government’s efforts to protect the private sector needs to be shaped with fruitful regional ties.
* Rodney Dan-Ao !Hoaeb is a Trade and Investment Researcher Committed to seeing a radical economic shake-up in Namibia.