Trade deficit widens between Nam, SA
President Hage Geingob on Thursday reiterated that South Africa has always been Namibia’s top trading partner for both imports and exports, although he also took stock of the fact that the existing trade deficit has tilted disproportionately in favour of the country now ranked Africa’s second largest economy.
To underscore his statement, Geingob said Namibian imports from South Africa were recorded at N$51 billion in 2014, while the value of the goods Namibia exported to South Africa was only N$8 billion, which created a trade imbalance of N$43 billion.
Last year the trade deficit widened to N$50.6 billion – again in favour of South Africa – after Namibia was only able to export goods worth N$11.4 billion against imports of N$62 billion from the economic powerhouse south of the Orange River.
“South Africa has always been Namibia’s top trading partner for both imports and exports. I must, however, note that the trade deficit disproportionately tilts in favour of South Africa,” he said at the three-day international trade conference underway in Johannesburg.
“In addition, Namibia contributed around N$110 billion in investments to South Africa in the form of pension funds,
long term insurance and other investments in 2015,” Geingob told the Invest in Namibia International Conference that started yesterday at Emperor’s Palace in South Africa and ends tomorrow.
The meeting is being attended by Minister in the Presidency of South Africa Jeff Radebe, Premier of Gauteng David Makhura, president of the Johannesburg Chamber of Commerce and Industry Ernest Mahlaule and senior officials accompanying Geingob.
Namibia’s main exports to South Africa include beverages, livestock, meat products, fish and minerals, while South Africa’s main exports to Namibia consist of vehicles, machinery, pharmaceuticals, processed food, clothes, cement, petroleum and petroleum products and iron and steel.
Geingob, however, said he is convinced that given the levels of South African industrialisation Namibia should be able to benefit by leveraging the opportunities that the South African economy provides.
“For example, why should we purchase a Puma helicopter from France when these helicopters are also produced under license and assembled in South Africa? By doing so, we will have the benefit of the vehicle or machine quoted in South African Rand and benefit from the advantage of paying in local currency. Furthermore, spare parts are only two hours away,” Geingob told the gathering.
He further said by properly leveraging the proximity of and friendship with South Africa both countries’ historically and still intertwined economies would benefit greatly from such cooperation and went on to assure his hosts that there is no doubt about the appetite for increased trade and business relations between the two neighbouring countries.
“We should not only focus on pursuing win-win relationships with our international partners, but let us pursue and build win-win partnerships amongst ourselves as neighbours, as friends and as Africans. Namibia remains committed to creating the enabling environment for the full participation of the private sector in our economy,” Geingob told the high-profile business gathering.
He said to this end Namibia is undertaking a number of sweeping reforms to facilitate the ease of doing business for both local and international investors, while South African business people will in future and on arrival receive multiple-entry visas “with minimum hassle”.
The planned multiple far-reaching reforms will be implemented through Geingob’s Harambee Prosperity Plan, launched in April to enhance flexibility and expedite the set action plans, while at the same time ensuring that all Namibians can participate in the country’s economic activities and are not left out.
“In conclusion, I would like to state that South Africa and Namibia will always share strong fraternal bonds. We must strive to use our friendship to create favourable conditions for our people. President Nelson Mandela once said: ‘As long as poverty, injustice and gross inequality persist in out world, none of us can truly rest.’
“Let the words of this great icon spur us on to work without rest until we create an economically strong Namibia, an economically strong South Africa, and bring an end to the inequality that threatens to turn our people against each other,” he advised.