Manufacturing needs a shot in the arm

THE Namibian economy needs a strategy to boost the local manufacturing sector, which is weak, faces operational constraints and high input costs like electricity, transport and port charges, a researcher has said.

Manufacturing represents only 10,7 per cent of the total economy and needs to grow to 30 per cent to achieve the goals of the country’s Vision 2030 development plan, says Dr John Steytler of the Bank of Namibia’s research department. Steytler presented his findings at a seminar last week, which was organised by the Namibia Manufacturers’ Association (NMA).”About 70 per cent of all manufacturers are situated in the Khomas and Erongo regions,” Steytler noted.Although the country produces and exports school and office furniture, furs, leather products, granite tiles and automotive parts, more could be done in the meat-producing sector, he said.”Among the constraints are the high input costs, unfair competition from South Africa and low level of labour productivity,” Steytler said.Knowledge of international best practices in terms of production methods and technology was also lacking.In addition, there was a lack of data and statistics on the local manufacturing sector, according to the BoN researcher.”To establish a manufacturing strategy requires a thorough examination of all sub-sectors and clear action plans, monitoring systems and regular evaluation mechanisms,” Steytler added.According to him, leather products such as shoes, belts and jackets held great potential but research was necessary to establish how to expand the sector and where the export potential was.He recommended that the Ministry of Trade and Industry should conduct research, since the findings and statistics would allow industrial planning and formulation of a manufacturing strategy.Prime Minister Nahas Angula, who opened the workshop, said local value addition to raw materials would not only create more jobs but would allow Namibia to derive more benefits from its products.”Is Namibia’s financial market providing the necessary support for investment in value addition? If not, this requires action,” Angula said.”We must ask ourselves if the country has an infrastructure for market research and development.”According to Deputy Trade and Industry Minister Bernhard Esau, 22 000 people were employed in the manufacturing sector, but this number had hardly increased over the past 10 years.”Food and beverages dominate and this must be addressed, because we need more diversification,” the Deputy Minister said.The sector needed new management methods and Namibia could learn from Japan in this regard.”We are also examining if we need new incentives for our manufacturing sector, we are doing this with the World Bank,” Esau noted.Presently manufacturers only pay 18 per cent corporate tax instead of 35 per cent.”Ought we not jointly start to look at the setting up of a productivity institute?” he asked.The Ministry was ready to assist the NMA in the acquisition of technical assistance for the setting up of such a centre, Esau said.Steytler presented his findings at a seminar last week, which was organised by the Namibia Manufacturers’ Association (NMA).”About 70 per cent of all manufacturers are situated in the Khomas and Erongo regions,” Steytler noted.Although the country produces and exports school and office furniture, furs, leather products, granite tiles and automotive parts, more could be done in the meat-producing sector, he said.”Among the constraints are the high input costs, unfair competition from South Africa and low level of labour productivity,” Steytler said.Knowledge of international best practices in terms of production methods and technology was also lacking.In addition, there was a lack of data and statistics on the local manufacturing sector, according to the BoN researcher.”To establish a manufacturing strategy requires a thorough examination of all sub-sectors and clear action plans, monitoring systems and regular evaluation mechanisms,” Steytler added.According to him, leather products such as shoes, belts and jackets held great potential but research was necessary to establish how to expand the sector and where the export potential was.He recommended that the Ministry of Trade and Industry should conduct research, since the findings and statistics would allow industrial planning and formulation of a manufacturing strategy.Prime Minister Nahas Angula, who opened the workshop, said local value addition to raw materials would not only create more jobs but would allow Namibia to derive more benefits from its products.”Is Namibia’s financial market providing the necessary support for investment in value addition? If not, this requires action,” Angula said.”We must ask ourselves if the country has an infrastructure for market research and development.”According to Deputy Trade and Industry Minister Bernhard Esau, 22 000 people were employed in the manufacturing sector, but this number had hardly increased over the past 10 years.”Food and beverages dominate and this must be addressed, because we need more diversification,” the Deputy Minister said.The sector needed new management methods and Namibia could learn from Japan in this regard.”We are also examining if we need new incentives for our manufacturing sector, we are doing this with the World Bank,” Esau noted.Presently manufacturers only pay 18 per cent corporate tax instead of 35 per cent.”Ought we not jointly start to look at the setting up of a productivity institute?” he asked.The Ministry was ready to assist the NMA in the acquisition of technical assistance for the setting up of such a centre, Esau said.