Namibian Economics To The Point - May 2021

1 Jun 2021

Brigitte Weidlich

Winter in Namibia typically begins in May and the daytime temperatures have been quite pleasant this month, despite some chilly nights and cold early morning temperatures.

Namibia’s mobile telecommunications company MTC became the country's ‘Most Admired Brand’ for the second year running. This was announced by organisation Brand Africa Leadership during a virtual event, end of this month.

The well-known Safari Hotel has been sold. Announcing the sale, the former owners explained that the internationally known Mövenpick Hospitality Company bought the Safari Court Hotel and Conference Centre of the company. The Safari Hotel on the same premises was sold to Kasada and will become part of the Ibis Styles chain.

Namibia plans more exports to the USA over the next five years.

The Indian mining giant Vedanta Resources intend to expand its zinc processing facilities in southern Namibia.

The Kunene Region has received very little rain during the just ended rainy season and is still in the grip of a severe drought. The Kunene governor Marius Sheya said the situation remained dire for humans, livestock and wildlife. The government sends food support and fodder for livestock, supported by the private sector.

Inflation in Namibia increased to 3.9 percent in April, according to the National Statistics Agency (March: 3.1%).

More Namibian products to the USA by 2026

The Minister of Industrialisation and Trade (MIT), Lucia Iipumbu officially launched Namibia’s African Growth and Opportunity Act (AGOA) utilisation strategy to increase Namibia’s exports under this US law, AGOA provides qualifying African countries tariff-free export opportunities. Namibia can export over 6,400 products tariff-free to the US.

The AGOA strategy is a collaboration between the MIT and other stakeholders, including Namibia’s private sector, with support from the US Agency for International Development (USAID). It sets out a prioritised roadmap on how Namibia can increase its exports to the US under AGOA duty-free market access. A body composed of private and public sector representatives will drive the implementation of the AGOA strategy. The Priority sectors for short-term exports like beef and fish, semi-precious stones, grapes, dates and devil’s claw plant) to medium-term like specialty foods/organic pearl millet products, handicrafts and leather products, and long-term export potential. Namib already exports minerals, beef and beer to the US.

EU an important market for Namibian products

The European Union remains an important market for Namibian goods. This was said on Europe Day on 9 May. The Executive Director of the Ministry of International Relations, Penda Naanda said that in 2019, Namibia exported goods valued at over N$19 billion (about 1.2 billion Euros). This included agricultural products, fish and mining commodities. During the same year, European exports to Namibia were valued at over N$7.2 billion (about 600 million Euros); which demonstrated the good trading relations between the EU and Namibia."

Speaking at the celebrative event, the EU Ambassador to Namibia, Sinikka Antila, said: “We also work with civil society and grassroots organizations in Namibia. We coordinate closely and work together with EU member states and with the United Nations. One example was the cooperation with Germany and the Namibian Government in the area of vocational training.

Vedanta to expand zinc refinery at Rosh Pinah

The Indian mining company Vedanta Resources is going ahead with its plans to modify its existing refinery at Rosh Pinah in southern Namibia to produce refined zinc. Its subsidiary Vedanta Zinc International has called for expression of interest (EOI) from large companies to carry out the N$6.5 billion (about 450 million Euros) project in southern Namibia. Vedanta acquired the Skorpion Zinc mine with its refinery at Rosh Pinah several years ago. Vedanta also mines zinc just across the border in South Africa’s Northern Cape province. The zinc ore will be trucked from there to Rosh Pinah. The existing refinery at Rosh Pinah will be expanded to enable the treatment of zinc sulphide concentrate. The finished product, refined, special high-grade (SHG) zinc will be exported via the port of Lüderitz. Some 2000 jobs will be created during the project phase. “Once completed Namibia will be the only African country exporting this product”, Vedanta announced.

The zinc refinery at Rosh Pinah. Photo: Windhoek Observer

Vedanta bought Skorpion Zinc as part of the acquisition of Anglo American’s zinc business in 2011. In 2019, the mine exported 67,925 tonnes of semi-refined zinc.

Canada’s Recon Africa company in the limelight

The Canadian oil and gas company Reconnaissance Energy Africa (ReconAfrica); which has explored one test well in the Okavango-East Region and found a “workable presence” of oil and gas, says allegations about alleged malpractices in their activities are "categorically untrue".

In a statement end of May, the company said, "Recon Africa adheres fully to the legal obligations within all territories in which it operates”. This comes after allegations that the oil company is illegally occupying and drilling on land at the Kawe and Mbambi villages. According to a notice published by the Kavango East Regional Council in a local newspaper this month, the company only now applied for occupation of the land it currently uses to search for oil. A family at Mbambi filed a court case in the Windhoek high court against Recon Africa, alleging that the land where the second test well is drilled is the family's ancestral land.

The renowned US magazine National Geographic published an extensive article this month, alleging Recon Africa might have fraudulently “misled investors” by allegedly misrepresenting its work on the project. This is according to various experts with allegations in a complaint filed with the US Securities and Exchange Commission (SEC) by a whistle-blower. According to the US magazine, the whistle-blower allowed it to look at the 44-page confidential complaint filed on 5 May. The whistle-blower acknowledged having submitted the report confidentially to avoid harassment. Recon Africa called the article “false and defamatory”.

Lawsuit filed for removal of veterinary fence

The mayor of Windhoek, Job Amupanda has started a constitutional lawsuit against the agriculture ministry in the high court of Windhoek about the veterinary cordon fence, which he finds discriminatory. The fence divides all northern regions via a double fence from the commercial farming areas to prevent the spread of animal diseases. The fence is also called ‘red line’ and was started over a century ago during the German colonial era after devastating ‘rinderpest’ (cattle disease) in 1896.

Namibia exports beef from freeranging cattle to Europe, China and the USA. Photo: Meatco.

It secures Namibia’s lucrative beef exports to Europe, China and the USA. Amupanda is also the founder and leader of the Affirmative Repositioning (AR) Movement. In the court papers submitted at the end of May, he noted the red line was used to divide, rule and restrict the movement of black people and their livestock during the colonial era. The Namibian government decided a few years ago in principle to move the veterinary cordon fenced to the Angolan border. Negotiations with the government in Luanda have been dragging their feet.

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