Major sectors and business opportunities

Livestock and horticulture

Livestock ranching (cattle, sheep and ostriches) takes place throughout the inland central plateau and accounts for the bulk of commercial farm output. While most cattle and sheep are sold live to South Africa, since independence an increasing proportion of cattle are marketed to export approved abattoirs which sell processed beef predominantly to EU countries under a 13,000 tonnes annual quota. Sheep are farmed mainly in the south for mutton and karakul pelts. With lower prices commercial farmers have diversified into ostrich breeding and an export abattoir was opened in 1997. Considerable potential for horticultural developments -. including melons, guavas, dates and strawberries has been identified and the government owns underdeveloped farmland with relatively good potential, which it will make available under long-term lease to suitable investors.

The National Development Corporation (NDC) is seeking commercial partners to manage several irrigated farms along the Okavango River, previously used for supplying food to South African colonial forces. Several small-scale irrigation schemes for vegetables and fruits (and wheat) have proved successful and funding from the Commonwealth Development Corporation (CDC) and China has enabled the expansion of citrus and off-season table grape production from Aussenkjer farms on the Orange River.

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Fisheries

Namibia has access to the rich fishing grounds of the south-east Atlantic where the Benguela current system supports a range of commercially-exploitable fish, including pilchard,anchovy, mackerel,tuna and hake,along with rock lobster,crab and recently-discovered rare bottom-dwelling species such as the orange roughy.However,the system is subject to major oceanic currents,which cause large variations in fishing conditions, particularly for the most lucrative species,hake and pilchard.These can have significant adverse short-term effects on commercial activities and make small-scale fishing generally not viable.At independence Namibia established a 200-mile exclusive economic zone(EEZ)where it operates a conservationist fisheries management regime based on sustainable catch levels.The activities of foreign vessels were restricted and all fishing now takes place under licence.Some 85 per cent of the fishing fleet is now made up of Namibian vessels,compared with 50 per cent at independence.Total allowable catches and rights holders'quotas for six species are set annually by the Fisheries and Marine Resources Ministry in line with regular scientific surveys on the size and conditions of fish stocks.Sustainable fishing has successfully boosted fish stocks already and the catch of hake is likely to be lifted in 1999 to 200,000 tonnes from 165,000 tones in 1998.

The catches of pilchards and mackerel are also likely to be lifted.The government has also expanded shore-based processing capacity, adding to existing value-adding activities such as pilchard canning and fishmeal/oil production. The contribution of fisheries to GDP rose to 10.1 per cent in 1998, compared to less than 4 per cent at independence, the Minister of Fisheries and Martne-Resources,Dr Abraham Jyambo said in June 1999. The ministry has targeted an 11 per cent contribution to GDP by 2001.Of the 1998 figure,4.2 per cent came from catching fish while 5.9 per cent came from processing, Dr Jyambo said. In money terms, the value of the industry has risen from R300 million at independence to about R2.2 billion at the end of 1998.

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Mining

Namibia is the fourth largest exporter of non-fuel minerals in Africa and has one of the continent's longest-established mining industries. Copper has been mined commercially since the turn of the century and an African railway worker near the southern port of Luderitz discovered the first diamonds in 1908. About 90 per cent of Namibia's diamonds are produced by Namdeb Diamond Corporation,the government's 50:50 joint partnership with De Beers. However, falling global demand for diamonds has forced the Central Selling Organisation to restrict purchases from a number of countries, including Namibia.

In addition, Namdeb's onshore resources are depleted so production is likely to have fallen to about 1.25 million carats in 1998,down from 1.36 million carats in 1997.While the major onshore deposits are now nearing exhaustion, Namdeb's deepwater contractor De Beers Marine (Debmarine) has increased its offshore recoveries to more than 500,000 carats from 481,000 carats in 1997.In spite of weak global demand, the company has just commissioned a fifth mining ship worth N$260 million and will continue to increase output to offset Namdeb's depleted onshore resources.The UK-based Namibian Minerals Corp. (Namco),now Namibia's second largest producer, achieved its initial production target of 150,000 carats a year at the end of 1998,just 10 months after starting commercial operations.

Output at the Rossing mine,the world's largest open cast uranium oxide mine, fell by 5 per cent in 1998 because of weak global demand. Rossing's sales revenue rose by 7 per cent however,to US$1 S4million because of strong prices during the first half of 1998.That is enough to allow Rossing to defer redundancies until the end of 2000. The government has been trying to sell the Tsumeb Corporation Ltd. (TLC),which is in liquidation.Talks have been held with the Australian-based Metals and Mining Corporation (MMC),which offered N$147 million for the base and precious metals mines, but made no provision for cleaning up the pollution caused by 50 years of operating a copper/lead smelter complex at the mines.A second offer worth N$160 million came from a local consortium Namibia Mining and Processing (NMP).NMP offered to put N$200 million into a trust fund for environmental rehabilitation, but by June 1999 the company had failed to provide any financial guarantees.

Namibia is the fourth largest exporter of non-fuel minerals in Africa and has one of the continent's longest-established mining industries.Copper has been mined commercially since the turn of the century and an African railway worker near the southern port of Luderitz discovered the first diamonds in 1908. Two large-scale ventures which may develop into important mining operations are the Haib copper project near the Orange river and the nearby Skorpion zinc project operated by Australia's Copper Mines,Metals and UK-based Reunion Mining respectively.Haib was scheduled to start operations in early 1999 to produce some 100,000 tonnes annually of copper cathode, the first fully-finished mineral product to be exported from Namibia. However, plans for this project have been shelved pending a sustained upturn in world copper prices. The Skorpion mine is expected to begin operations within the next year after the government granted Export Processing Zone (EPZ) status to the refinery project in October 1998. Namzinc, which is part of the Skorpion project, plans to invest about N$l.3 billion to set up the refinery.

Energy Namibia currently imports all its petroleum requirements, but it could become a net energy exporter if the planned development of the Kudu offshore gas field and a second hydropower station on the Kunene go ahead. Several petroleum consortia are prospecting for oil offshore and a third licensing round took place late in 1998. Although no commercial oil deposits have been located, more comprehensive seismic data has been acquired for distribution to interested firms. It is estimated that the Kudu gas field could hold reserves of as much as 20 trillion cubic feet of gas, making it one of the largest fields in Africa.

Development of the field could produce the first gas in 2000, but plans hang in the balance after one of the partners, South Africa's Eskom, withdrew from the project in early 1999. Shell had announced plans jointly with Namibian Power Corporation (Nampower), National Power of the United Kingdom and Eskom to build a 750-MW combined-cycle power station at a cost of N$2 billion.

The remaining partners now plan to sell gas to independent power stations planned for both Namibia and Cape Town, The Cape Town plant is scheduled for completion in 2005 and there are also plans to sell gas to industrial users such as Iscor and the Industrial Development Corporation's Saldanha Steel Plant. Namibia is currently largely reliant for domestic power on the 240-MW Ruacana hydroelectric power station, but this is adversely affected by low flow rates during drought. To help meet demand, the government plans to build a second 450-MW hydroelectric power station at Epupa Falls on the Kunene River, where a large catchment reservoir would ensure year-round water supplies.

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Manufacturing

Namibia's small manufacturing sector is mainly based on the processing of foodstuffs- meat, fish and milk-which along with beverages account for 80 per cent of output by value. Other products include soap and detergents, paper and plastic packaging, clothing, leather products, furniture, construction materials, with cement being the only established heavy industry Namibia Breweries (Nambrew) is likely to double its exports to South Africa to 400,000 hectolitres in 1999. The increase follows changes to the law, which have released South African Breweries' grip on the distribution network in South Africa. Changes in the calculation of beer excise duty in SACU also favour Nambrew.

The export processing zone (EPZ) scheme, introduced in 1995 to encourage local and foreign investment in manufacturing for export, has failed to attract substantial investment. So far 19 EPZ companies are operational and have invested a combined total of N$244 million and created about 495 jobs. As at the end of April 1999, some 75 enterprises had been granted EPZ status, up from 17 at the end of 1996. Of those 75, 13 had withdrawn their EPZ status and one had completely divested from Namibia leaving a total of 61 approved projects, although it is not clear how many of these are actually in progress.

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