Opinion – Green industrialization: Namibia’s imperatives

Michael Humavindu

The main objective of this article is to address the political context that governs productive development in Namibia, with green industrialization as a concomitant pillar.

In this paper, I delve into the policy dynamics, the enabling environment for green industrialization, as well as the associated policy dimensions, and offer a tough rebuttal on green industrialization.

Political context

In terms of political fundamentals, the Namibian government
The first national industrial policy was introduced in 2012. Before that, the country published a White Paper on Industrial Policy in 1992. A Foreign Direct Investment Law was introduced in 1991,1 and an Export Processing Zone Law was introduced in nineteen ninety five.

As a result, in collaboration with the National Treasury, necessary incentives were provided to manufacturers and exporting entities through
such published legislations.

This policy push mainly supported export-led investments with a slight bias towards manufacturing sectors. There was hardly any treatment for the service and export sectors.

In December 2014, the Namibian Cabinet approved the Namibian Implementation Strategy for Industrialization (Internal Growth Strategy) to update the 2012 National Industrial Policy. Accordingly, the following policy foundations were improved: Ten strategies were published in 2016 industry growth (for sectors such as seafood, charcoal, steel manufacturing, crafts, wildlife products and cosmetics). A SADC industrialization strategy and roadmap was introduced in 2015. Namibia ratified the Southern African Development Community (SADC) Industrialization Protocol in 2021.

A National Automobile Assemblies Development Policy was introduced in 2019.

Namibia ratified the Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer. An 11th industry growth strategy on the Invader Bush biomass/processing value chain was introduced in 2021.

A Mineral Beneficiation Strategy was developed in collaboration with the Ministry of Mines and Energy in 2021.

The key features of these industrial policy outcomes are local value added; a targeted and gradual approach to investment development; support the development of value chains; bilateral, regional and continental protection, as well as nascent industries; safeguard political space and guarantee competitiveness.

At all times, efforts were made to ensure that such sectors are aligned with the overall regional industrial aspirations in the determinations and deliberations of SADC and the Southern African Customs Union (Sacu). In December 2020, existing manufacturing incentives were withdrawn. The ministry subsequently introduced a National Sustainable Special Economic Zone Policy in October 2022 to replace the Export Processing Zone (EPZ) regime by December 2025.

The ministry is currently finalizing the special economic zone (Sez) bill, the Namibia Investment Act, as well as a National Informal Economy, StartUps and Entrepreneurship Policy. The ministry plans to finalize a new Industrial and Productive Development Policy in early 2025.

Suitable environment

The green industrialization policy, in our opinion, as a pillar within a national agenda of industrial and productive development, is to promote green growth: the trajectory of economic development based on the sustainable use of non-renewable resources that also internalizes environmental costs, especially those related to climate change.

Ultimately, the proliferation of green technologies will support production techniques that will economize exhaustible resources and help emit fewer greenhouse gases. Our main objective as advocates of industrial policy is to properly incentivize green investments in technologies that are carried out at an appropriate scale. Therefore, the green industrialization agenda is a fundamental element within industrial policy to incorporate the development of green technologies and investments.

Sectoral focus

From the perspective of the Ministry of Industrialization and Trade (MIT), it is important to appreciate that past work, such as sectoral development strategies in sectors that lend themselves to green technologies and investments, are further focused on future industrial policy.

These are sectors such as steel manufacturing and fabrication, charcoal and biomass, arts and crafts, wildlife products, seafood production and blue economy, as well as arts and crafts. The automobile sector policy and its upcoming reviews will also lend itself to the integration of green industrialization. The same applies to the Mineral Beneficiation Strategy, which supports efforts to ensure green technologies and investments.

From a regional dimension perspective, sectors such as energy are considered general sectors to ensure the sustainability imperative.

Namibia’s ratification of the Kigali Amendment to the Montreal Protocol also heralds our determination to move towards greener, low-carbon industrialization pathways.

The ministry has a National Ozone Unit with the explicit aim of not only managing the import and export of hazardous gases but also to begin supporting the development of our key industrial capabilities in the heating, ventilation and refrigeration (HVAC) sectors. From a broader systematic perspective, the ongoing collaboration on green hydrogen and critical raw materials with partners such as the EU, the German government and Japan also provides ample space to incorporate a green industrialization agenda within the National Industrial Policy resolution. . The ministry also published the Sustainable Development Goals (SDG) Investor Roadmap in 2021 that promotes investment in key sectors such as solar investments and other green technologies. This was done in partnership with the United Nations Development Program (UNDP).

Finally, in terms of Namibia’s commitment to the Paris Agreement, the nationally determined contributions (NDC) sectors identified, as part of our adaptation and mitigation efforts, invariably target sectors that are aligned with green growth, such as solar technologies, electric energy vehicles and biomass.

We can therefore testify that, based on a ministerial, national and systematic platform, we are on track to ensure that the investment climate in Namibia is favorable to the green industrialization agenda.

Policy dimensions

Fundamentally, it is important to remember that green industrialization and associated productive development are about guaranteeing the transition and transformation of our economy towards a greener growth path.

In this process, renewable energy is a key enabler.

This therefore implies a key realization around the transition from fossil fuels to renewable energy sources, increasing resource efficiency (i.e. the same amount of raw materials or energy used to make more) and the adoption of a circular economy, thus decoupling economic development from resource depletion, environmental degradation and pollution.

These ideals were rooted
independence, as Namibia’s Constitution was the first of its kind to promote environmental sustainability. Furthermore, it is important to ensure that the green industrialization agenda supports 3P (price-performance parity) outcomes, as these ensure the integration of industrial resource efficiency. Additionally, it will be critical for MIT to ensure the design and support of appropriate Sez regimes to enable value chain developments that support the scale and outcomes of the 3Ps. Finally, a key policy dimension of green industrialization is to support and help reduce our core critical challenges: poverty, inequality, unemployment, low business culture and climate change. Work on the Sez regime, as well as Business Development Policy and legislation, aims to ensure the development of effective agglomeration effects to support sustained investments.

Given this, it is worth mentioning some sectors, although the list is not exhaustive: green steel; green hydrogen and associated value chains; electric vehicles and associated value chains; sustainable mining (critical raw minerals and rare earth metals); green fertilizers; bioeconomy and blue economy; value chains related to biomass/forestry.

A harsh retort

As we work to mainstream the green industrialization policy agenda, we need to ensure that there are certain key replications that we need to keep in mind as we develop and structure, such as green investments and industrial projects.

Shifting sands, such as carbon border adjustment mechanisms and supply chain due diligence laws, are playing out globally with implications for product competitiveness and market access.

Key risks of impacts need to be managed, especially around the decent work agenda; community impact assessments and integration; labor rights, environmental management and mining rehabilitation measures, such as funds.

Greater emphasis, given the nature of our country, on water and soil management.

Industrial downstream (to increase the added value of domestic raw materials), as well as local content policy (to further support local business development and the extension of agglomeration effects).

These are some of the harsh aftershocks that the ministry and Namibia, as a collective, will seek to address, as it integrates the green industrialization agenda into the overall work on a new national industrial policy.

It is my fervent hope that he has done justice and that he will provide some guidance as we continue to work to create a viable path for Namibia’s industrialization ambitions.

*Michael Humavindu is the deputy executive director of industrialization at the Ministry of Industrialization and Commerce. This opinion has been adapted from a keynote speech given at the Namibia Green Industrialization Workshop 2024 in April 2023 in Windhoek, Namibia.