Africa must industrialise Trade finished goods with China: Nam Minister

> Magreth Nunuhe

Windhoek – The bilateral economic cooperation between China and Africa can be a window of opportunity for the exchange of technological skills, capital          and raw materials that can benefit the two partners equally.

But if Africa only continues to export raw materials from the continent without adding value to them, then industrialisation will take longer than needed, says the Namibian Minister of Economic Planning in the Presidency and Director-General of the National Planning Commission (NPC), Tom Alweendo.

“We have minerals to industrialise, but what we need is Chinese technology, Chinese capital, therefore we need to add value to those commodities that we have on the continent,” Alweendo said during an interview with the Namibian Broadcasting Corporation’s Business Today program on 7 December 2015.

The Minister was reflecting on the recently held 6th Forum on China-Africa Cooperation that was held in Johannesburg, South Africa on 4-5 December 2015, where political leaders from China and Africa deliberated on issues under the theme “Africa-China Progressing Together: Win-Win Cooperation for Common Development”.

Alweendo said that China now has the second largest economy in the world but not long ago it was regarded as a backward economy that nobody thought much about.

“Now everybody is talking about what they are doing,” he added, saying that there were lessons to be learned from China.

Equally, the minister noted that China would need resources from Africa for its economy but that could only happen when African policy makers ensure that whatever agreements they sign with China are win-win situations and not one-sided.

“Some argue China is going to colonise Africa in a way, but we should be able to say when we negotiate, this is what we gain and that is what they gain. It is really up to us,” he maintained.

Alweendo went on to say that Africa can derive benefits from the cooperation in accordance with its own African Union (AU) 2063 Agenda, which calls for Africa to industrialise.

The 2063 Agenda also calls on Africans to rededicate themselves to the continent’s accelerated development and technological progress.

The minister also gave a brief overview of Namibia’s economic performance during 2015, saying that an economic growth rate of 4.5 percent and a deficit at the rate of 5.3 percent is expected at the end of this year.

In 2014, Namibia recorded an economic growth rate of 6.4 percent.

Alweendo conceded that it was not the levels that the economy should be growing at because in terms of the 4thNational Development Plan (NDP4), the average growth should have been 6 percent.

“If we grow that way, we could most likely fall short of NDP4. We need to re-examine some of the strategies that we have in NDP4,” he said.

The NDP4, which is a five-year plan ending in March 2017, is differentiated from its three predecessors by a number of focus issues with three overarching goals, which are high and sustained economic growth, increased income equality and employment creation.

The NDP4 is one of a series of seven medium development plans towards Vision 2030, which aspires to build a prosperous and industrialised Namibia by the year 2030 and at which time the economy is expected to have grown by 9 percent.

“But we also have to realise that sometimes we have a plan but that is also influenced by other issues, therefore I don’t think that we have done a bad job because we did not reach the 6 percent.

“It could well mean that the external factors of which we don’t have control prevailed and therefore we cannot always achieve what we planned. It does also not mean that it was a bad plan marked its weight heavily,” he argued.

He said that by early next year, Namibia would only have 12 months before the introduction of NDP5, “and we really want to ensure that during the course of next year, we spend enough time on preparations for NDP5.

“One of the issues we need to look at is that this is a national development plan and it has to be accepted and embraced by all the stakeholders, whether government or private sector,” he pointed out, saying that in order to have all the stakeholders buy into the plan, they need to have formal consultations in terms of what needs to be done and why it should be done.

Alweendo further alluded to the need to industrialise, but given that Namibia is a rather small economy, it needs to look outside its borders.

“But the questions that need to be answered are not how to industrialise but who does what and what has to be done. Who decides which industry to start? And even when you decide which industry, is it the government or is it the private sector or both?” he said.

At the moment, the predominant view seems to suggest that “we should let the private sector do the work because government is inherently not suited in those industries”, he said.

He said that “while there is no denial that we need the private sector, history suggests that all the developed economies that we have today – whether American, Japanese or German economy, realised that their private sectors were too weak to be relied upon and their governments had to step in, which is something the Namibian government can emulate while waiting for the private sector to get stronger.

“It (private sector) can get stronger but the government has to make it stronger; there is nothing wrong with the government being the one to decide which industry to invest in. As long as we agree that when we do that, we do it from a distance and not as a civil service.”

Alweendo is of the opinion that government can intervene provided that they do it in a business-like manner.

“And those who normally argue that government should not intervene are the ones who are currently benefitting which makes it is easy for them to say things are going well while the majority of the unemployed people cannot wait for the private sector to create more jobs,” he said.

Furthermore, he raised concern about the general unemployment rate in Namibia, saying that it is still a worrisome situation.

He is convinced that economic growth should go hand-in-hand with employment creation.

“We need look in other areas. We do have strategies, (but) we probably need to look more at economic growth, creating new activities. We need to look at value addition, creating new industries, we do have those strategies going forward,” he said.

When quizzed about complaints from the public that the local economy was facing liquidity problems, which had impact on various government projects, Alweendo refuted that, saying the Minister of Finance, Calle Schlettwein presented a budget review in Parliament recently, which did not in any way indicate a reduction reduce in the government budget.

“Therefore, we have spent as we should have done. I cannot recall where the government did not spend because there was no money. The government is still spending the way it has been planned,” he maintained.

On income distribution, he said that it was part of the household income survey done every 10 years and by the time they finish NDP4, they would have another year to measure how far they are in terms of the Gini coefficient, which measure income inequality.

But in general, Alweendo says that he is convinced that Namibia is not doing too badly and he is looking at 2016 with optimism, because the world economy is recovering and there is general mood that the economy is going to be much better going forward.

December 2015
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