Is Namibia on track with its industrialisation agenda?

Predictions from industrial growth modelsINDUSTRIALISATION has been identified by renowned economists as one of the ways to boost countries’ standard of living.

This measure of standard of living has remained acceptable even to-date. This article aims to answer several questions related to the subject matter: what is industrialisation? Are there measures or indicators of industrialisation? If yes to the preceding questions, what are these measures of industrialisation? Using these measures of industrialisation process, how did Namibia perform overtime? Given the aforementioned background, it is now appropriate to explain the term industrialisation for you, the reader.Many people associate this term to several industrial economists like Walt Rostow, an American Economist, in 1971.According to Rostow, any economy in its development path passes through five industrial stages that include the traditional economy; the infrastructure stage; the take-off; the drive-to-maturity stage, and mass consumption stage.Based on this understanding industrialisation is a stage in development consisting of shifting resources from agricultural to manufacturing.The reason for shifting resources away from agriculture to manufacturing is that a country needs to develop its industries in order not only employ many people but also add value to its produce for the generation of foreign exchange.Foreign exchange is needed to bridge the savings-investment-gap in a country’s domestic economy.Ways of measuring a country’s industrialisation process are provided in industrial dynamics literature.Only few indicators are given here.For a country to industrialise: employment in the manufacturing sector; the share of the manufacturing sector in total economic activities; and investment in manufacturing, among others, should be increasing overtime.In the latter part of this article, Namibia is rated against these measures.But it is important to say few things about Namibia before going to some numerical measurements.Like any other country, Namibia has a dream of being industrialised one day.Efforts that have been made over the years are numerous and are at the same time testimony to this.I can only mention few of these efforts.Perturbed by the limited industrial base in Namibia at the time of independence in 1990, the Namibian government came up with a white paper on Industrial Development in August 1992.The white paper aims to ameliorate the weak manufacturing base inherited from the South African regime at independence.More recently before the former president, Dr.Sam Nujoma, stepped out of office as President of the Namibian nation, the government launched a grand vision, Vision 2030, which is aimed at transforming the country as an industrial society by year 2030.We are now roughly 23 years from realising this grand dream.So, what are the indicators of industrialisation tell us about Namibia? To what extent are we in terms of boosting industrial firms and production in the country? What could be done to expand the industrial sector thereby supporting the country’s industrial growth and development? The following table says it all.Table: Summary of indicators of industrialisation Source: Bank of Namibia Annual Reports; National Planning Commission Namibia is doing better.Even-though the country is not industrialised yet signs of industrialisation are there.As shown earlier a country industrialises if employment and investment in and contribution of manufacturing in a country’s economy go up.Although the proportion of employment in the manufacturing sector in total employment has been stagnant at six per cent for eight years up to 2004, the stock of investment in the sector almost doubled.This means Namibia is guaranteed of more employment in the industrial sector in few years to come depending on the maturity of certain investments.Manufacturing’s contribution to the total economic activity is picking up and with this increasing trend, people in Namibia are likely going to benefit through employment, skills development and general standard of living in future.To ensure that we attain Vision 2030, championed by our visionary leaders, more fixed investments are required in sectors that are export oriented.* This article was contributed by Albert M Matongela, a Windhoek-based economic analyst.The opinions are his own and should not be associated with his employer.2004 1997 Agriculture/total employment ratio(%) 27 37 Manufacture/total employment ratio (%) 6 6 Agriculture as % of GDP 5 6 % of real fixed investment in manufacturing 18 9 % of real fixed investment in agriculture 5 6This article aims to answer several questions related to the subject matter: what is industrialisation? Are there measures or indicators of industrialisation? If yes to the preceding questions, what are these measures of industrialisation? Using these measures of industrialisation process, how did Namibia perform overtime? Given the aforementioned background, it is now appropriate to explain the term industrialisation for you, the reader.Many people associate this term to several industrial economists like Walt Rostow, an American Economist, in 1971.According to Rostow, any economy in its development path passes through five industrial stages that include the traditional economy; the infrastructure stage; the take-off; the drive-to-maturity stage, and mass consumption stage.Based on this understanding industrialisation is a stage in development consisting of shifting resources from agricultural to manufacturing.The reason for shifting resources away from agriculture to manufacturing is that a country needs to develop its industries in order not only employ many people but also add value to its produce for the generation of foreign exchange.Foreign exchange is needed to bridge the savings-investment-gap in a country’s domestic economy.Ways of measuring a country’s industrialisation process are provided in industrial dynamics literature.Only few indicators are given here.For a country to industrialise: employment in the manufacturing sector; the share of the manufacturing sector in total economic activities; and investment in manufacturing, among others, should be increasing overtime.In the latter part of this article, Namibia is rated against these measures.But it is important to say few things about Namibia before going to some numerical measurements. Like any other country, Namibia has a dream of being industrialised one day.Efforts that have been made over the years are numerous and are at the same time testimony to this.I can only mention few of these efforts.Perturbed by the limited industrial base in Namibia at the time of independence in 1990, the Namibian government came up with a white paper on Industrial Development in August 1992.The white paper aims to ameliorate the weak manufacturing base inherited from the South African regime at independence.More recently before the former president, Dr.Sam Nujoma, stepped out of office as President of the Namibian nation, the government launched a grand vision, Vision 2030, which is aimed at transforming the country as an industrial society by year 2030.We are now roughly 23 years from realising this grand dream.So, what are the indicators of industrialisation tell us about Namibia? To what extent are we in terms of boosting industrial firms and production in the country? What could be done to expand the industrial sector thereby supporting the country’s industrial growth and development? The following table says it all. Table: Summary of indicators of industrialisation Source: Bank of Namibia Annual Reports; National Planning Commission Namibia is doing better.Even-though the country is not industrialised yet signs of industrialisation are there.As shown earlier a country industrialises if employment and investment in and contribution of manufacturing in a country’s economy go up.Although the proportion of employment in the manufacturing sector in total employment has been stagnant at six per cent for eight years up to 2004, the stock of investment in the sector almost doubled.This means Namibia is guaranteed of more employment in the industrial sector in few years to come depending on the maturity of certain investments.Manufacturing’s contribution to the total economic activity is picking up and with this increasing trend, people in Namibia are likely going to benefit through employment, skills development and general standard of living in future.To ensure that we attain Vision 2030, championed by our visionary leaders, more fixed investments are required in sectors that are export oriented. * This article was contributed by Albert M Matongela, a Windhoek-based economic analyst.The opinions are his own and should not be associated with his employer.2004 1997 Agriculture/total employment ratio(%) 27 37 Manufacture/total employment ratio (%) 6 6 Agriculture as % of GDP 5 6 % of real fixed investment in manufacturing 18 9 % of real fixed investment in agriculture 5 6