Ready For Another Bumpy Ride?

THE road from the northeastern Chinese city of Changchun to Windhoek is long.

But that’s where your next generation of luxury cars and coaches will come from – thanks to a deal signed between Namibia Contract Haulage (NCH) and China First Automotive Works (FAW) during a recent visit to Namibia by Chinese President Hu Jintao. We understand that the deal has been in the making since last year when NCH officials visited China to cement this.One cannot help but to commend the people at NCH for treading where others have not.But as a business deal one has to make sure all the necessary pieces are in place before going ahead.Already one of the directors at NCH, Elias Shanyengana, is urging Namibians to place their orders for ‘these’ Chinese vehicles.Forget about the fact that he doesn’t know their prices as yet and you probably haven’t seen the cars either.It all reminds me of those ‘olden’ days when we used to order stuff from Mahomedays.Well, sometimes one would end up with a bra instead of boxer – if you were a man that is! So, when your new Sagitar or Hongqi arrives at Walvis Bay port, open the hood to make sure it has an engine.Well, on a more serious note, why does this deal remind me of Barden International? Not that I’m arguing that history repeats itself.No.But the main persona in both stories is the same – former President Sam Nujoma.In the latest deal he plays the role of a Swapo President and in the previous one, Namibia’s President.I don’t know what role the Swapo President has on the business front of the party but I’m sure a deal of this nature would probably go through his fine business comb.What is the difference between these two deals? Well, the latest one involves a private entity – the Swapo-owned NCH and FAW.And let me make a small, albeit necessary, correction here.The First Automotive Works is government-owned and not a private company as was referred to in Nujoma’s speech at the signing ceremony.China has other carmakers, all state-owned – a point I was trying to emphasise in my last column about state involvement in economic activities.For example, and this is an aside, a French state-owned company, Areva, has won a tender to build two nuclear plants in China for a staggering amount of $5 billion.So, Government shouldn’t listen to the IMF and the World Bank telling it not to poke its nose into businesses.But let’s hit the road again.The Barden International deal was a government-private joint venture as well.That time Namibia and Barden/General Motors were the players.But it was a deal that went badly wrong and it probably left a bad taste in the mouths of those responsible for it.How such a deal came into being has always puzzled me.But given Namibia’s politics of fear; you will probably never get to know how this decision was arrived at.It seems to have been a one-man show though.But that’s history now.Namibian taxpayers paid dearly for it.The GM processing facility was built to the tune of around N$63 million.Government bought close to 800 vehicles for about N$136 million.Now add to that the servicing and spare parts.Then the spare parts stopped coming in and the Chevies came to a screeching halt and were eventually grounded.I understand President Pohamba has traded the Chevies for Toyotas.Was the Barden deal an investment or not? It’s simple.Before GM and Namibia came together, Mr Don Barden was not in the motor industry.So, here was a businessman who saw a loophole somewhere in a distant African country called Namibia, and he simply exploited it.This was a simple sales agreement with the proviso that the cars are assembled in Namibia.And that does perhaps explain why he could not continue with it because there were no other takers in the region – he tried to strike a similar sales deal with the Swazi government but to no avail.Despite all this, this deal was touted as one of the biggest direct foreign investments by an American company.The statements by Nujoma, Hidipo Hamutenya, then Trade Minister, and Theo-Ben Gurirab, then Foreign Affairs Minister, at the opening of the Barden plant in Prosperita make for interesting reading in retrospect.The NCH-FAW deal is cast precisely in the same language.”The initiative complements our government’s efforts to fast-track the industrialisation of our national economy and enhance the living standards of all Namibians,” said Nujoma at the ceremony.Here is another car assembly plant and a big investment making its way to Namibia.The same language used during the GM launch is being used here too.But you might say, so what? This is a private venture and if it goes sour it won’t affect you as a taxpayer.The catch is this: we are told the tripper trucks would be rented out to the Roads Contractor Company.Surely? Don’t be surprised when Government agencies go Chinese too.As was the case with Barden, the NCH is eyeing a sprawling SADC market and beyond.But let’s be real, people in the rest of the region take a hard look at things before putting pen to paper.Sometimes, I think we Namibians try to be too enterprising and in the process we end up looking ignorant and perhaps naive.That’s why Government keeps on losing money to con-men so cheaply – N$100 million at ODC/NDC, N$30 million at SSC and N$3 million at the Defence Ministry, among others.In fact, FAW is targeting to sell two million cars per year by 2010 worldwide.So a hundred or so sold in Namibia would be a drop in the ocean – it’s more political than business.We’ll be looking to the year 3019 to reap the real economic benefits, as Paul and Evelyn Leonard put it in a New Era article!We understand that the deal has been in the making since last year when NCH officials visited China to cement this.One cannot help but to commend the people at NCH for treading where others have not.But as a business deal one has to make sure all the necessary pieces are in place before going ahead.Already one of the directors at NCH, Elias Shanyengana, is urging Namibians to place their orders for ‘these’ Chinese vehicles.Forget about the fact that he doesn’t know their prices as yet and you probably haven’t seen the cars either.It all reminds me of those ‘olden’ days when we used to order stuff from Mahomedays.Well, sometimes one would end up with a bra instead of boxer – if you were a man that is! So, when your new Sagitar or Hongqi arrives at Walvis Bay port, open the hood to make sure it has an engine.Well, on a more serious note, why does this deal remind me of Barden International? Not that I’m arguing that history repeats itself.No.But the main persona in both stories is the same – former President Sam Nujoma.In the latest deal he plays the role of a Swapo President and in the previous one, Namibia’s President.I don’t know what role the Swapo President has on the business front of the party but I’m sure a deal of this nature would probably go through his fine business comb.What is the difference between these two deals? Well, the latest one involves a private entity – the Swapo-owned NCH and FAW.And let me make a small, albeit necessary, correction here.The First Automotive Works is government-owned and not a private company as was referred to in Nujoma’s speech at the signing ceremony.China has other carmakers, all state-owned – a point I was trying to emphasise in my last column about state involvement in economic activities.For example, and this is an aside, a French state-owned company, Areva, has won a tender to build two nuclear plants in China for a staggering amount of $5 billion.So, Government shouldn’t listen to the IMF and the World Bank telling it not to poke its nose into businesses.But let’s hit the road again.The Barden International deal was a government-private joint venture as well.That time Namibia and Barden/General Motors were the players.But it was a deal that went badly wrong and it probably left a bad taste in the mouths of those responsible for it.How such a deal came into being has always puzzled me.But given Namibia’s politics of fear; you will probably never get to know how this decision was arrived at.It seems to have been a one-man show though.But that’s history n
ow.Namibian taxpayers paid dearly for it.The GM processing facility was built to the tune of around N$63 million.Government bought close to 800 vehicles for about N$136 million.Now add to that the servicing and spare parts.Then the spare parts stopped coming in and the Chevies came to a screeching halt and were eventually grounded.I understand President Pohamba has traded the Chevies for Toyotas. Was the Barden deal an investment or not? It’s simple.Before GM and Namibia came together, Mr Don Barden was not in the motor industry.So, here was a businessman who saw a loophole somewhere in a distant African country called Namibia, and he simply exploited it.This was a simple sales agreement with the proviso that the cars are assembled in Namibia.And that does perhaps explain why he could not continue with it because there were no other takers in the region – he tried to strike a similar sales deal with the Swazi government but to no avail.Despite all this, this deal was touted as one of the biggest direct foreign investments by an American company.The statements by Nujoma, Hidipo Hamutenya, then Trade Minister, and Theo-Ben Gurirab, then Foreign Affairs Minister, at the opening of the Barden plant in Prosperita make for interesting reading in retrospect.The NCH-FAW deal is cast precisely in the same language.”The initiative complements our government’s efforts to fast-track the industrialisation of our national economy and enhance the living standards of all Namibians,” said Nujoma at the ceremony.Here is another car assembly plant and a big investment making its way to Namibia.The same language used during the GM launch is being used here too.But you might say, so what? This is a private venture and if it goes sour it won’t affect you as a taxpayer.The catch is this: we are told the tripper trucks would be rented out to the Roads Contractor Company.Surely? Don’t be surprised when Government agencies go Chinese too.As was the case with Barden, the NCH is eyeing a sprawling SADC market and beyond.But let’s be real, people in the rest of the region take a hard look at things before putting pen to paper.Sometimes, I think we Namibians try to be too enterprising and in the process we end up looking ignorant and perhaps naive.That’s why Government keeps on losing money to con-men so cheaply – N$100 million at ODC/NDC, N$30 million at SSC and N$3 million at the Defence Ministry, among others.In fact, FAW is targeting to sell two million cars per year by 2010 worldwide.So a hundred or so sold in Namibia would be a drop in the ocean – it’s more political than business.We’ll be looking to the year 3019 to reap the real economic benefits, as Paul and Evelyn Leonard put it in a New Era article!