IF we are to take a critical look at the future of the life-assurance industry, an entrenched savings culture emerges as a fundamental requirement for the industry and for the creation of long-term prosperity in Namibia.

A stable economy is critical to encourage individuals to save. Two key factors influencing the future economic growth are the successful conclusion of the European Union Economic Partnership Agreement (EPA) and the completion of the Trans-Kalahari Corridor. Timeous resolution of both these issues will bring a much-needed boost to our economy.

Countries such as Botswana, Lesotho and Swaziland have put pen to paper, signing agreements individually with the European Union (EU), while Namibia, Angola and South Africa are amongst the holdouts who are still pursuing a more attractive agreement.

Namibia is unhappy about the EU's demand that export levies and taxes on Namibian goods be scrapped as the country uses these as incentives for local value addition. The EU further demands the abolition of internal quantitative restrictions on EU exports to the rest of the Southern African Customs Union (Sacu). This, it is felt, is inconsistent with the regional trade arrangements under both the Sacu and SADC agreements.

Namibia also objects to the Most Favoured Nation (MFN) clause, which obliges all EPA members to extend to each other any better market access they grant to other countries in the future.

Some of the provisions in the EPA agreement clearly conflict with the goals set out in the SADC Free Trade Area agreement, signed in August 2008.

The Free Trade Area (FTA) is supposed to be part of SADC's ongoing efforts to deepen long-term regional integration in order to accelerate economic growth and reduce poverty. The FTA programme also includes establishing a customs union by 2010, a common market by 2015, a monetary union by 2016 and a single currency by 2018.

According to the SADC agreement, negotiations with third parties are to be conducted as a bloc.

It is a principle which is violated by the fact that the EU insists on negotiating individually with countries within the grouping. The fact that certain countries have signed individually, regardless, weakens the principles of integration which is supposed to be the core of the SADC agreement.

It appears that the negotiations between the EU and Namibia have reached a point where it forces an unwelcome choice between commitment to the regional economic integration agenda, and the demands of the EU. The economic muscle of the EU, as our biggest market for commodities, as well as their economic leverage countries has exposed rifts within SADC.

The Trans-Kalahari Corridor - the route from the Walvis Bay Harbour passing through Botswana to Johannesburg, South Africa - is a vital component in the development of Namibia's economy.

It provides fast, efficient and reduces transport costs and makes the regional economy more attractive to global players as envisaged under the NEPAD initiatives.

Regional integration is critical. The size of Namibia's domestic market has forced it to look elsewhere for markets for beef, fish, grapes and other exports, but increased integration will provide access to some 275 million consumers, and a potential cumulative gross domestic product (GDP) of US$431 billion.

Membership in regional trade groupings such as SADC, Sacu and the Common Monetary Area (CMA) offers member countries the opportunity to have access of over 247 million consumers. This offers prospects to expand and diversify the country's export markets and mitigate risks to external shocks.

All these factors have to be weighed up against the prospects of favourable access to the markets of the EU and the benefits these entail.

It is clear that, before the dust settles, the strains between the imperatives of a globalised economy and the competing demands of regional and national economies will have to be negotiated carefully, in order to arrive at a solution that everyone can live with.

Jason Nandago is the Managing Director of Metropolitan Namibia.