NO production will take place at the Peugeot-Opel assembly plant at Walvis Bay until the Ministry of Finance approves the policy of calculating rebates under the South African Customs Union (Sacu) policy on rules of origin.
This is according to the deputy executive director of trade and industrialisation, Michael Humavindu.
He says the vehicle plant will not close or relocate elsewhere.
He says the Ministry of Industrialisation and Trade was working with the Ministry of Finance to ensure the plant, in which government owns a 49% stake and French automaker Groupe PSA has a majority 51% share, starts exporting vehicles that are competitive in the market.
Humavindu says when a Southern African Customs Union (Sacu) member country assembles cars and brings in the knocked down parts, the 60/40 rules-of-origin policy applies, meaning 40% of parts must be sourced locally.
"An additional 18% tax has to be added to the price of the vehicle, which then makes that vehicle uncompetitive on the market," he says.
Humavindu says Namibia literally imports 100% vehicle components as the country does not manufacture any, however, under the rules of origin, local means within Sacu countries.
This means Namibia can source the local 40% from within Sacu.
Addressing a public public consultation on national policy on sustainable special economic zones (SSEZ) in November last year, the minister of industrialisation and trade, Lucia Iipumbu, said the 18% tax was among the challenges that had bogged down progress at the N$190 million assembly plant.
"However, with Sacu rules, this can be reduced to 1% through a system of rebates allowed under the Automotive Production and Development Programme (APDP).
"We have domesticated this policy, and we were able to do calculations which we submitted to Namra to give us the go-ahead to export the cars competitively," Humavindu says.
The APDP is a Sacu production-incentive scheme for the motor industry aimed at promoting production volumes in the specified motor-vehicle industry, promoting added value in the automotive component industry, thus creating employment across the automotive value chain.
Humavindu says this policy was introduced in 1994, and of all Sacu countries, only South Africa has adopted it and has been benefiting it.
"We adopted the policy guidelines in 2021, which gave Namibia the mandate to make rebate calculations," he says.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
"We cannot blame South Africa, but only ourselves for not adopting the policy on time as it allows the country to develop its investments in the automotive sector," he says.
Humavindu says the APDP policy allows the minister of trade to give the assembly plant incentives as well as recommends that the minister of finance calculate tax rebates on vehicles.
"Without that policy update you cannot calculate the rebates, because it is against Sacu policy, which has to be adopted first," he says.
Humavindu dismisses claims that South Africans particularly the Congress of South Africa Trade Unions, want the plant, which was set up mainly to export cars to South Africa, to be relocated to that country to create jobs there.
"We have not heard of it. Not even from the (trade) minister or trade unions. Remember, when we talk of local we mean Sacu, and we can therefore source components from manufacturers in South Africa. That would make the plant their market."
He says Namibia is a transit economy with some South African vehicles being exported through Namibia, and they would not want to jeopardise that trade.
The deputy executive director says there is growing interest among government agencies to buy Peugeot vehicles in line with a Cabinet directive, and he has made a presentation to the Windhoek City Police, which are interested in acquiring some of the vehicles.
Since the plant was officially opened by president Hage Geingob in 2018, at least 150 vehicles have been assembled.
The municipality of Walvis Bay was among the first to purchase two Peugeots to replace the mayoral Mercedes Benz and a Volkswagen Jetta.
Email: [email protected]
