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 Southern Customs Union (SACU) and Southern African Development Community (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.
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 labor force, abundant land, and rich minerals.
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.
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.
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.
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.
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 favorable environment for the production of cheap solar salt.
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.