SADC Free Trade a Boon for Namibian Market, Says Report
The Namibian, Windhoek
SADC Free Trade a Boon for Namibian Market, Says Report
1 December 2008
By Nangula Shejavali
The size of the domestic market has long been a thorn in the flesh for local businesses.
There is a perceived difficulty to support the economies of scale required by an independent business operations, they claim.
Market growth for most Namibian products can only be achieved through exports, and the Southern African Development Community (SADC) "Free Trade Area" (FTA), which became operational this year, is expected to see through this growth in markets for business expansion and success.
It is expected to present opportunities for Namibian businesses, expand markets and overcome economic challenges domestically, which is crucial to supporting and sustaining growth.
According to the Africa Economic Outlook 2008 report, two of the major challenges that Namibia faces include ensuring employment-creating growth and strengthening competitiveness.
Despite growth exceeding an average of 4 per cent per year over the past decade, the unemployment rate remains dangerously high at close to 40 per cent, and poverty and inequality remain glaring problems.
Moreover, the decreasing diamond production and the ongoing global financial crisis, growth is expected to decline, with forecasts for 2009 falling to 3 per cent.
Tokkie Nchindo of the Centre for Training and Projects Development (CTPD), believes that the SADC FTA is one of the answers to the poverty problem.
"The business opportunities emanating from the Free Trade Area will spur employment creation, and increased employment means the alleviation of poverty," she says.
The CTPD is hosting a conference beginning next week, for all Namibian enterprises and stakeholders involved in trade and the import and export process, under the theme, "Capturing the SADC FTA Business Opportunities".
The conference aims to support government’s efforts to promote a culture of business entrepreneurship, support the creation of employment opportunities, encourage the exportation of Namibian products, and motivate Namibian businesses to seize the FTA opportunities to increase market size.
"Other opportunities presented by the SADC FTA include the growth in the potential market size, increasing product lines of Namibian businesses, expanding businesses by opening new branches in other SADC states as the economy becomes more globalised, opportunities for skills sharing and/or transfer, and overall continued economic growth," says Nchindo.
The conference will cover a wide range of topics, including the institutional framework of the FTA; how the removal of trade barriers will benefit Namibian businesses; the threats and challenges posed by the SADC FTA; the use of the SADC FTA in poverty alleviation; what strategies the Namibian government is using to protect Namibian businesses in the face of a free trade area where smaller economies would have to compete with larger ones; the role of the government in promoting and supporting businesses that enter the SADC FTA market; business financing for Namibian products intended for export; and the opportunities and challenges presented by the overlapping functions of the SADC FTA, the Southern African Customs Union; and COMESA.
Implemented in 2000, the SADC FTA has already started facilitating the movement of goods by harmonising customs procedures and classifications.
The FTA is increasing customs co-operation, reducing costs by introducting a single, standardised document for customs clearance throughout the region and establishing ’one-stop’ border posts to cut down on time spent at the border, and making transhipment easier by enabling the use of a single bond when transporting goods across several borders within the SADC community.
All members of the SADC Community, except for Angola and the Democratic Republic of Congo, have ratified the SADC FTA.
In addition to the FTA established this year, the SADC regional integration programme also includes the set up of a Customs Union by 2010, a Common Market by 2015, a monetary union by 2016 and a single currency by 2018.
