Local must be even more ‘lekker’

Jo-Maré Duddy – The devastating consequences of the Covid-19 crisis has highlighted the need for Namibia to focus on strategies that reduce its dependency on imports and ensure greater self-reliance.

It has also emphasised the importance to engage those who are not sufficiently part of the formal economy and especially focusing on initiatives to increasingly support local businesses, says the account director of Team Namibia, Bärbel Kirchner.

Team Namibia is a member-based non-profit organisation aimed at mobilising Namibian consumers to buy local, as well as promoting the production of quality local products.

Kirchner says it is pivotal that Namibia once again looks at increasing local production, manufacturing and industrialisation so that eventually imports can be substituted to reduce dependency on external source countries or import partners.

“This will help to change Namibia’s position as being predominantly a producer and exporter of primary commodities and importer of value-added manufactured goods,” she says.

Kirchner points out that Namibia needs to have a “detailed understanding of the products that are being imported and the respective source countries, and establish what can be made in Namibia”.

It is also necessary to establish how value can be added to Namibian raw materials, where available, and determine how products can be developed that are unique and customised to needs of the local population, she adds.

“If we can strategically review and plan for alternatives or substitutions of products that were previously imported, we might be in the position to build new businesses. There might be even opportunities for smaller businesses to make products for niche markets,” Kirchner elaborates.

Incentives

However, this will require an increasing awareness that the right incentives for local production are crucial in order for businesses to get off the ground or to expand.

“This would be particularly relevant for businesses that actually produce products that previously were imported, but also for established businesses in order for them to find it easier to remain competitive,” Kirchner says.

According to her, concerted efforts to secure the right incentives for local production and manufacturing include attempts to repeal the manufacturing incentives through amendment of the income tax legislation, which must be considered with circumspection. Simultaneously, the continuous supply, availability and costs of utilities needs to be reviewed, Kirchner says.

“Related innovations would require access to financial resources, and possibly affordable interest rates and terms, underpinned by monetary policies, as Namibia has witnessed as part of the government’s economic stimulus package.”

Kirchner says the focus of government on further capacitating SMEs and developing entrepreneurs will also provide new business opportunities.

“In particular, addressing the major financial stumbling block, i.e. limited access to finance, can help small businesses to get off the ground. The N$500 million government-guaranteed SME loan scheme at the Development Bank of Namibia, as part of the economic stimulus package, will contribute to providing the necessary finance.”

Market

Namibia sits with the predicament of a small domestic market, Kirchner says.

“One therefore should aspire to access the regional, if not global markets. With greater regional integration and also considering the prospects of the African Continental Free Trade Area (AfCFTA), this can become more easily attainable,” she adds.

Kirchner cautions that manufacturers should not solely focus on production of end products, but indeed also how local production can become part of regional or global value chain.

“Regardless, it is important that optimal standards and quality of products can be secured, through effective innovation strategies, which should further facilitate global market access.

“In the same vein, in order to reduce Namibia’s dependency on food imports and also increasing the prospects of exporting food products, is important that efforts are made that one consistently focuses on improving the quality of produce by local farmers, so that it can be used for agro-processing,” she says.

Any changes of Namibia’s import substitution and export capacity it will require time, Kirchner says.

“Now more than ever, it is critically important that Namibian consumers and institutional buyers, especially government, support local businesses. Products and services must be bought from local businesses,” she stresses.

Consumer

The current crisis - with a reduction of income due to underemployment or unemployment through the introduction of short working hours or retrenchment - has led to a major change of consumptive patterns, Kirchner says.

“Consumers are spending less and differently, either due to not having any money at their disposal or due to fear of a possible future lack of income. Many consumers are focussing only on essential purchases and luxuries such as eating out, travelling and personal grooming expenditure, have become a low priority.”

A collaborative switch in consumption patterns with preference to local products will help improve Namibia’s trade balance, as the demand and price for the country’s commodities has been significantly affected due to the global pandemic, Kirchner points out.

“It will also ensure that any money spent, remains circulating in the local economy.”

“Furthermore, this can help to alleviate unemployment, which now stands at an unprecedented all-time high. It once again can help to create local jobs, because when local businesses are continually supported, through buying their products and services, it leads sustainable economic development, which can reduce poverty in turn.

“Buying local alongside the Covid-19-related economic stimulus packages offered by government, can make a big difference,” Kirchner says.

Think differently

“Through shopping, buying, procuring local, we can impact the economy. This is as relevant when we buy groceries and consumer goods, as when we decide where we spend our holidays,” Kirchner says.

“How businesses and authorities buy their products and services also has an enormous impact, whether this relates to office supplies, corporate clothing or uniforms, IT services or indeed construction services. Of course, of particular relevance is now the personal protective equipment,” she adds.

All this might require a “change in our value system and that we become aware with what we identify ourselves”, Kirchner says.

“Considering where the majority of people on this earth find themselves - in abject poverty – should one really desire to associate oneself with luxury brands to subconsciously increase one’s self-worth? How about creating our own strong designs and brands and value our own?”

Kirchner continues: “What if we were to imagine the impact we can make if all uniforms, school uniforms and corporate clothing were to be produced locally? What if we were to imagine the purchasing power of our civil servants and the difference it could make if all government employees were to very strategically and patriotically buy only locally produced products and services, to meet not only the professional needs but also the personal needs of themselves and their families?

“What if we were to imagine if we as Namibians were to very deliberately support our local tourism and hospitality industry? With this sector still being affected by international border controls and travel restrictions of tourism source countries, we as Namibians want to support our local industry and sojourn and linger at places in our own country, instead of exploring overseas destination.

“What if we really were to feel morally inclined to support our local tourism and hospitality industry through this crisis?” she says.

Kirchner concludes: “At the end of the day, we can get through this extremely difficult times by strategising and reducing our vulnerabilities, diversifying our economy, engaging more of the economically inactive of our society and in particular, supporting our own.”