!Gawaxab: ‘Prepare well for AfCFTA’
Regional integration does have some unintended consequences, but the overall and long-term benefits appear to outweigh the immediate costs.
Jo-Maré Duddy – Namibia embracing the African Continental Free Trade Area (AfCFTA) is a “no-brainer”, but the benefits and opportunities offered by the pact are not automatic.
Speaking at the 21st annual symposium of the Bank of Namibia (BoN) yesterday, the governor of the central bank, Johannes !Gawaxab, said deliberate actions are required to make sure that the country’s intentions and aspirations are transformed into practical strategies. This should start by quantifying and defining commercial opportunities and attractiveness of Namibia’s imports and exports.
The BoN 2020 symposium focused on the AfCFTA, which aims to create a single market for goods and services on the continent with free movement of people and capital.
The agreement establishing the AfCFTA has been signed by 54 of 55 African Union (AU) member states and is thus the largest free trade agreement signed since the establishment of the World Trade Organisation (WTO), !Gawaxab said. It covers 1.2 billion people and a total economy worth US$3 trillion.
OPPORTUNITY
The AfCFTA offers an opportunity to Namibia to address its economic challenges, he said. These include the smallness of the economy, over-reliance on the export of primary commodities, constricted export and manufacturing base, underdeveloped industrial and value chains, inhibitive regulatory and trade barriers, and competitiveness challenges.
“Addressing these challenges will assist and enable trade facilitation and trade creation. It therefore entails that we modernise, simplify and harmonise our export and import procedures, and ensure a friendly business environment and address bottlenecks that hinder trade,” !Gawaxab said.
Trade facilitation entails the simplification, modernisation and harmonisation of import and export procedures, the governor continued.
“Therefore, reducing bureaucracy and border delays, ensuring straightforward trade regulations, smooth cross border payments and harmonised customs processes are critical for enhancing the country’s competitiveness. Issues that increase the cost and time of doing business, such as bureaucratic delays, red tape and inefficiencies at borders must be addressed,” !Gawaxab said.
“We must expediently create an investor-friendly environment and facilitate trade through actions such as fast-tracking the implementation of the one-stop border and single-window initiatives, and by enhancing electronic and digital funds transfers,” he said.
COMPETITION
Regional integration does have some unintended consequences, !Gawaxab said, but the overall and long-term benefits appear to outweigh the immediate costs.
“Alternative import sources in Africa is likely to be associated with lower tariffs and therefore lower revenue collection for some. Similarly, the removal of trade taxes may increase imports into Namibia and result in the displacement of Namibian industries by more well-established and efficient continental producers.
“While this switch may reduce the cost of living, it has implications for macroeconomic stability. This can be through the worsening of the balance of payments and more directly by putting pressure on the international reserves of the country, and an increase in the-already high unemployment rate,” !Gawaxab said.
Everybody therefore should be well prepared to mitigate against the unintended consequences, through exploiting opportunities of the AfCFTA, ahead of time, he said.
MAXIMISE POTENTIAL
Namibia’s ability to achieve sustainable and inclusive export-led growth and exploit the opportunities offered by the AfCFTA will, by and large, depend on its ability to maximise the potential of existing industries, !Gawaxab said.
This basically entails that international trade boosts a country’s development, particularly if when that country can produce high-value products, he added.
“Notwithstanding this, we should also not be afraid to try new things, adopt new business models building on Namibia’s existing know-how and capabilities and abandon those that have not served us well in the past.”
According to !Gawaxab, the cardinal question revolves around how Namibia moves away from its current low value-added, low complexity exports.
“To diversify Namibia’s export basket and avoid over-reliance on exporting raw natural resources, Namibia needs to acquire the knowledge and find new niches in areas of manufacturing and services,” he said.
Speaking at the 21st annual symposium of the Bank of Namibia (BoN) yesterday, the governor of the central bank, Johannes !Gawaxab, said deliberate actions are required to make sure that the country’s intentions and aspirations are transformed into practical strategies. This should start by quantifying and defining commercial opportunities and attractiveness of Namibia’s imports and exports.
The BoN 2020 symposium focused on the AfCFTA, which aims to create a single market for goods and services on the continent with free movement of people and capital.
The agreement establishing the AfCFTA has been signed by 54 of 55 African Union (AU) member states and is thus the largest free trade agreement signed since the establishment of the World Trade Organisation (WTO), !Gawaxab said. It covers 1.2 billion people and a total economy worth US$3 trillion.
OPPORTUNITY
The AfCFTA offers an opportunity to Namibia to address its economic challenges, he said. These include the smallness of the economy, over-reliance on the export of primary commodities, constricted export and manufacturing base, underdeveloped industrial and value chains, inhibitive regulatory and trade barriers, and competitiveness challenges.
“Addressing these challenges will assist and enable trade facilitation and trade creation. It therefore entails that we modernise, simplify and harmonise our export and import procedures, and ensure a friendly business environment and address bottlenecks that hinder trade,” !Gawaxab said.
Trade facilitation entails the simplification, modernisation and harmonisation of import and export procedures, the governor continued.
“Therefore, reducing bureaucracy and border delays, ensuring straightforward trade regulations, smooth cross border payments and harmonised customs processes are critical for enhancing the country’s competitiveness. Issues that increase the cost and time of doing business, such as bureaucratic delays, red tape and inefficiencies at borders must be addressed,” !Gawaxab said.
“We must expediently create an investor-friendly environment and facilitate trade through actions such as fast-tracking the implementation of the one-stop border and single-window initiatives, and by enhancing electronic and digital funds transfers,” he said.
COMPETITION
Regional integration does have some unintended consequences, !Gawaxab said, but the overall and long-term benefits appear to outweigh the immediate costs.
“Alternative import sources in Africa is likely to be associated with lower tariffs and therefore lower revenue collection for some. Similarly, the removal of trade taxes may increase imports into Namibia and result in the displacement of Namibian industries by more well-established and efficient continental producers.
“While this switch may reduce the cost of living, it has implications for macroeconomic stability. This can be through the worsening of the balance of payments and more directly by putting pressure on the international reserves of the country, and an increase in the-already high unemployment rate,” !Gawaxab said.
Everybody therefore should be well prepared to mitigate against the unintended consequences, through exploiting opportunities of the AfCFTA, ahead of time, he said.
MAXIMISE POTENTIAL
Namibia’s ability to achieve sustainable and inclusive export-led growth and exploit the opportunities offered by the AfCFTA will, by and large, depend on its ability to maximise the potential of existing industries, !Gawaxab said.
This basically entails that international trade boosts a country’s development, particularly if when that country can produce high-value products, he added.
“Notwithstanding this, we should also not be afraid to try new things, adopt new business models building on Namibia’s existing know-how and capabilities and abandon those that have not served us well in the past.”
According to !Gawaxab, the cardinal question revolves around how Namibia moves away from its current low value-added, low complexity exports.
“To diversify Namibia’s export basket and avoid over-reliance on exporting raw natural resources, Namibia needs to acquire the knowledge and find new niches in areas of manufacturing and services,” he said.
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