Manufacturing Sector

Namibia’s long term development goal is to be “a prosperous and industrialized country, developed by her human resources, enjoying peace, harmony and political stability” by 2030. The manufacturing sector plays a strategic role in economic development and is a component of industry that presents greater opportunities for sustained growth, employment, and income inequality and poverty reduction. Manufacturing activities in the country are concentrated in the subsectors of meat processing, fish processing, other food and beverages, and mineral beneficiation. The latter largely represents the smelting of copper and zinc ore, and the cutting and polishing of rough diamonds.

Manufacturing has been identified as an economic priority in the National Development Plan as well as in the “Growth at Home” strategy with “Promotion of local value addition” being the most important feature in the strategy. Namibia’s Industrial Policy aims at improving export competitiveness, increasing domestic production and creating an enabling environment for industries.

The manufacturing sector plays a strategic role in economic development and is the component of industry that presents greater opportunities for sustained growth, employment and poverty reduction, in Namibia’s ambitions to industrialize. While the size of the domestic market is small, the potential of regional markets of its membership to SACU and SADC ensures access to a market of over 55 million and 300 million people, respectively. The Namibian Government has also signed various preferential free trade agreements with a number of countries, including the SADC region. The country therefore has the potential of engaging in the production of other manufactured products which are currently not being produced, as this allows for potentially larger market access for locally produced products.

Government Approach to Support Manufacturing Sector

The government of Namibia encourages new investments and supports the existing companies in the manufacturing sector as follows;

Provision of both fiscal and non-fiscal incentives to the sector including Export Processing Zone (EPZ) status which allows zero corporate tax to manufacturing investors meeting the EPZ criteria.

Direct subsidies to local SMEs to acquire machinery, to tax-related subsidies in the form of exemptions.
Government also promotes small and medium enterprises in rural and urban areas so as to enhance labour intensive light manufacturing activities in these areas.
Facilitate in gaining export market for locally produced products through various export development programs to promote the export of manufactured products in the region and to the rest of the world.
Provide Investor aftercare through technical advisory and policy advocacy activities to continuously improve the business environment.
Be a signatory to various bilateral and multilateral trade agreements which ensure wider regional and international markets access.

Investment Opportunities

Namibia’s manufacturing sector has considerable investment potential as the domestic economy is relatively well endowed with natural resource factors such as raw materials, required labour force, abundant land, and rich minerals.

Steel manufacturing and metal fabrication

Currently, Namibia does not have its own steel production facilities, being fully dependent on imports, which mainly come from South Africa. Opportunities have been identified to develop a Namibian steel manufacturing industry to meet the needs of the domestic market, foster the metal products manufacturing sector, develop linkages into other sectors such as the construction industry, as well as establish steel exports to neighboring countries.

Automotive parts

The Namibian automotive sector is still at a rather early stage of development. The value chains are relatively short and not very deep. With Namibia Press and Tools, an established automotive supplier is based at Walvis Bay manufacturing engine parts for various European car manufacturers, such as Volkswagen, Audi, BMW, Renault, and Opel. The majority of other enterprises are active in the automotive after-market (e.g. repair services, engines refurbishing, panel beaters, tooling, outdoor accessories, and tire services). Windhoeker Maschinenfabrik (1998) (PTY) Ltd has some experience in manufacturing vehicles, however concentrating more on military and agricultural vehicles.

Fodder and Pet Food Production

There is potential for upgrading different value chains within the agro-processing industry. There is potential for small and large scale fodder production and further commercialization of food supplement production in Namibia. In addition, options to expand feedlots and establish a pet food production.

Jewellery industry

Namibia is regarded as one of the world largest producers of high value diamond. Namibia has already successfully set up a nascent cutting and polishing industry. However, currently only 10% of domestically produced diamonds kept for cutting and polishing purposes to about 19 cutting and polishing factories. There is potential to increase the value chain in Namibia’s diamond industry through further beneficiation of cut and polished diamonds into jewellery.

Production of Chemicals

Domestic chemical industry remains in its infancy, largely restricted to manufacturing of cleaning and painting products, while a large share of Namibia’s raw materials are exported to neighboring countries for further value addition. Chemicals and chemical products constitute approximately 8% of total value added from the manufacturing sector.

There is potential in expanding Namibia’s chemical industry, in particular on the salt value chain. Namibia is a significant producer of salt in Sub-Saharan Africa. The local arid coastal climate with evaporation significantly exceeding precipitation creates a favourable environment for the production of cheap solar salt.

Manufacturing of leather, wool and textiles

Potential exists in value addition projects of the leather, wool, pelts, silk and textiles industry through enhanced collection, processing, grading and cleaning of raw hides, skins, wool and natural silk.