African Arguments spoke to Namibia's Industrialisation and Trade Minister about industrial strategy, unjust trade, and green hydrogen controversies.
Namibia exports mostly unprocessed goods - like minerals, beef, and fish - and imports almost all its consumer goods. How is your ministry attempting to change this imbalance?
We are now looking at interventions to make sure much of what we process is grown locally, has value-added locally, and is distributed locally. For example, we have a school feeding programme, a drought relief programme, and green scheme projects that are producing wheat. All these products are now being processed, packaged, and distributed for local consumption.
We also passed a policy last year and are busy with a law that is about to be enacted for special economic zones. We will then be able to designate specific areas in specific regions for specific industrial activities in manufacturing and the biggest sectors of our economy - mining, fishing, agriculture. We have looked at the specific areas and designated them for their competitive advantage.
On mining, we recently passed a mineral beneficiation strategy to add value locally. In the past, everything was exported in raw form. Now we are saying let's do the value addition at home. Even if we are not ending finished products, at least we've done the first level of value addition. We have large deposits of lithium and, last year, there was a moratorium on exporting raw products.
How will you confront the many challenges to these strategies such as the skills gap and the need to build infrastructure, both of which have long been barriers to growth in Namibia?
At independence in 1990, if there is one thing that Namibia looked at and realised we had to address it was a deficiency in skills. What were technical institutes and colleges of education got transformed into the University of Namibia. Now we also have the University of Science and Technology and the International University of Management as well private institutions coming on board to complement the efforts of government.
As we are evolving, we are looking at the technical practicality of our skills gap. We are talking about green hydrogen in the ammonia sector and oil and gas. To my knowledge, we do not have the skills in these sectors yet, but our existing institutions have already introduced programmes that are developing skills in this specific evolving field. We already have trainees in our various local institutions and some are also sent abroad to capacitate themselves in those industries.
On infrastructure, we expanded our port 6-7 years ago that increased the container terminal to three times its size. We have developed various development corridors. We are revamping our main international airport. Namibia is well known in southern Africa to be the one with the best roads.
What about trade deals, such as European Partnership Agreements with the European Union, which have been accused of undermining the industrialisation of African countries due to their enforced deregulation and liberalisation of trade?
Trade agreements are a give and take, as in a marriage. Before Namibia subscribes to any trade agreement, we do our thorough due diligence. What are we benefiting from? What are we losing? A trade agreement should be win-win.
Liberalisation is not a challenge for us. We know we have some sensitive sectors that we need to protect, where we don't want job losses, that we know that are holding up the economy. We need to make sure they remain impactful. But in all these aspects, we thoroughly deliberate before we enter into any agreement.
Some would say these are not always marriages of equals and, even if they are, some measures that affect trade are implemented unilaterally such as the EU's Carbon Border Adjustment Mechanism, a tariff on carbon-intensive imports that some say will cut Africa's GDP by $25 billion.
We have to look at the requirements that are contained in CBAM versus what we would expect as a country. The regulations contained cover some sectors that are very critical to our economy. When we go negotiations, such as at the EU-Africa Summit, we make it clear that there are certain mechanisms and requirements that we can comply with but not all, because we also have our own interests to protect. This should be a win-win partnership that does not leave others behind. You can't wake up today and go to Africa and start telling an African to stop cooking with fire because you are contaminating the environment. You have to find a mechanism of gradual progression from perhaps graduating from a coal to eventually renewable energy.
Namibia has huge ambitions for developing green hydrogen and is seeking $20 billion in investments for projects that would see the country use its vast renewable energy potential to produce ammonia - that can be converted into hydrogen fuel - for export. What do you say to criticisms that this will not transform but replicate colonial dynamics of Namibia's resources primarily benefiting the Global North, while electricity access in the country itself is just 45%?
All of us have started from somewhere. We currently import half our electricity from neighbouring countries and any effort to enhance local energy generation is a commendable effort.
Namibia's approach to energy generation is not focusing only on green hydrogen. Solar energy could even be the one to come first, but then you look the blessing of the strip we have with abundant sun and proximity to the ocean, where you can have these gases developed onshore and then other initiatives offshore. These are initiatives - along with biomass and various other sources of energy - that would complement the general energy generation that would supplement what we get from the grid.
Green hydrogen in Europe perhaps is something that you have had for quite a number of years but it's now complementing the various other energy sources. All the aspects of energy generation are speaking to each other, and we are able to generate enough consumption and perhaps even surpass the requirements.
So you're saying you are doing both at the same time - developing renewable energy for export and for domestic use?
Yes, we have clean energy projects that have already taken off in Walvis Bay that have started filling some trucks with gas instead of oil. Those activities are already ongoing along with the conversion of some engines into the electronic modes and evolving into electrical vehicles.
The $10 billion EU-backed green hydrogen deal struck with the company Hyphen has faced several criticisms. Civil society group say the tender process was opaque. The CEO of Hyphen was previously banned from doing certain deals in the UK after being found to have behaved dishonestly. The financial structure of the deal, through tax havens, has raised concerns over Namibia's ability to levy taxes on profits. What do you say to these concerns?
Wherever you go and whatever you do, other people will always have their opinions about you and about what you do. But what matters is for you to focus on what you believe is delivering for your country. Whether it's Hyphen or any other company we would have chosen to hold our hand in evolving this very critical sector, there were always going to be comments. If you choose to focus on the personalities of who is leading the various initiatives, you will miss the point. The ball will be moving in the other direction while you are scrutinising the personalities and their histories. I believe in the present and whether the deal we can strike will be workable.
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So far, I have not come across challenges that indicate our choice of Hyphen was a misfortune. The commencement of feasibility studies and all the activities they have done thus far do not leave me with question marks. For each and every relationship that you build, especially the business relationships, there will be those that will be taking joy in them and there will always be those that will criticise them.
What do you say to concerns that the development will threaten areas of high biodiversity, potentially exacerbating the biodiversity crisis as well as undermining fishing and tourism activities?
If we were going to listen to the environmental pressure groups, if I may call them as such, we would not have food to eat or commodities to trade with or exchange of goods and services between countries. In every sector of our economy, the environmentalists embrace their concerns. They have a role to play, but we must put everything on the scale and balance the equation in making sure that we do not concentrate on environmental impacts without focusing on energy deficiency. It's one thing to worry about the environment. It's another thing to not be able to sustain your industries because of energy deficiency.
James Wan is the Managing & Climate Editor of African Arguments. He is the former Acting Editor of African Business Magazine and Senior Editor at Think Africa Press. He has written for Aljazeera, New Humanitarian, BBC, The Guardian (UK) and other outlets. He is a fellow of the Wits University China-Africa Reporting Project and former member of the African Studies Association-UK council.
