INSTITUTE FOR OPEN

LEARNING
STUDY MANUAL
INTRODUCTION TO REGIONAL
ECONOMICS (SADC) /
NAMIBIAN AND REGIONAL
ECONOMICS
CODE: FIN 1127 / FIN - 111
IUM FIN 1127 / FIN - 111 1
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TABLE OF CONTENTS
Study unit Title
Syllabus
1 Introduction to Economics
a. What is economics
b. Macro and micro-economics
c. Economics terminologies and their respective definitions
2 amibian Macro-Economic !nalysis
a. !nalysis of amibia"s main economic sectors
b. !nalysis of amibian government structure
c. #overnment $ong and short term plans
% S!&' Macro-Economic 'omparative !nalysis
a. !nalysis of S!&' countries economies
( amibia"s 'ompetitiveness and International !ffiliations
a. )actors determining amibia"s competitiveness
b. amibia"s sta*e in International bodies
c. amibia"s E+,
IUM FIN 1127 / FIN - 111 %
M+%u$ Ou'7+/$"
!nalysis regional economic policies
+lan the best course of action to ta*e in order to avoid economic
debacle
)ormulate viable economic policies for the country
P)+.)*//$ C+('$(' *(% L$*)(!(. Ob@$7'!,$"
A-'$) 7+/6$'!(. '#$ 6)+.)*//$2 "'u%$('" "#+u% b$ *b$ '+ :
1 &efine economics and *ey -ords in the definition
i. &ifferent definitions of economics
ii. &efinitions of *ey -ords such as scarcity and opportunity
cost
iii. 'ompare and contrast various economics concepts
2 !nalysis of amibian main economic sectors
i. &iscuss and analyse Mining. )ishing. !griculture.
Tourism and Manufacturing. being the main economic
sectors of amibia.
ii. /nderstand other sectors of the economy li*e 0an*ing
and Insurance. Transport and 'ommunication.
iii. &efine money. *no- the financial institutions and their
role and functions.
iv. E1plain the main input and output of each sector.
v. Identify the main challenges faced in each sector.
vi. Ma*e recommendations on the course of action to be
underta*en.
vii. 'ompare and contrast the main activities and their
respective contribution to the #ross &omestic +roduct.
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viii. 2no- ho- to compute #ross ational +roduct. #ross
ational Income and E1penditure.
% !nalysis of the amibian government structure
i. #eneral understanding of forms of governments
ii. 'ompare amibia to other countries or *ingdoms
iii. &iscuss the three main branches of government namely
$egislature. 3udiciary and the E1ecutive.
iv. Institutions. *ey roles and functions of each branch
( S!&' Macro-Economic !nalysis
i. Tabulate and *no- all the S!&' member states
ii. Identify and *no- the main economic activities of each
S!&' country
iii. 'ompare and contrast the main strengths and endo-ment
of each S!&' country.
iv. Tabulate a comparative analysis of S!&' countries
4 'ompetitive !dvantage
i. Why amibia
ii. What ma*es amibia an investment destination
iii. Salient features of amibia"s competitiveness
5 amibia"s sta*e in international organisations 6S!&'. S!'/.
'7MES!. WT7. and !#7!8
i. !nalysis of amibia"s sta*e in international
organisations
ii. Identify the international organisations amibia is a
member or an affiliate of
iii. &iscuss the aims and ob9ectives and:or strategies of each
body amibia is a part of.
; E1port +rocessing ,ones 6E+,8
i. &efine E+,
ii. <ecognise the importance of E+,
iii. &iscuss the case of E+, in amibia
iv. Incentives and benefits of E+, to various sta*eholders
v. Impact of E+, in amibia

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M$'#+%" +- A""$""/$('
'ourse -or* 6continuous assessment 6'!88 comprising of
assignments and tests. account for (=> of the overall final mar*s.
Written formal e1amination. account for 5=> of the overall final
mar*s. Time allo-ed % hours.
7verall mar* is 1==> that is (=> '! and 5=> )E.
R$7+//$(%$% T$>'"/M*'$)!*"
1. Introduction to amibia 3ournal. Ministry of Trade.
2. Trade &irectory 2==;
%. &+ 1. 2 and %.
(. ?ision 2=%=
4. +ositive Economics. <ichard $ipsey. 7r any Economics te1t boo*
5. ?arious business and economics 9ournals.
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UNIT 1
194 INTRODUCTION
This manual covers relevant materials for first year students in <egional
Economics and amibian and <egional Economics. The course focus is on
<egional economic activities in comparison to amibia.
Students are e1pected to have a good understanding and *no-ledge base of
the main economic activities -ithin the parameters of this sub9ect.
The first part of this manual introduces students to basic and common
terminologies and definitions.
1.1 UNIT OBJECTIVES
The main ob9ective of this unit is to introduce economic terms and -ords to
students. /pon completion they should *no-@
What is economics
Macro and micro-economics
Economic terminologies and their respective definitions
192 DEFINITIONS OF ECONOMICS
Economics is one of the social sciences. all of -hich are concerned -ith
different aspects of human behaviour in society.
Economics is a study of man*ind in the ordinary business of life 6!lfred
Marshall8. It deals -ith the choices people ma*e A such as -hat to eat. -hat
to -ear. -hat career to pursue.
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Economics is not only concerned -ith the 7#+!7$" that individuals ma*e. but
also studies the decisions of businesses. government and other decision
ma*ers in society.
Economics can therefore be defined as the study of the use of scarce
resources to satisfy unlimited human -ants. The central elements of
economics are therefore "7*)7!'& and 7#+!7$9
!lthough scarcity and choice lie at its heart. economics is not merely
concerned -ith the types of choice. Economics also see*s to describe. e1pB-
lain. analyse and predict a variety of phenomena such as economic gro-th.
unemployment. inflation. trade bet-een individuals and countries. the prices
of different goods and services. poverty. -ealth. money. interest rates.
e1change ratios and business cycles.
The study of economics is usually divided into t-o parts@ /!7)+$7+(+/!7"
and /*7)+$7+(+/!7". In /!7)+$7+(+/!7" the focus is on individual parts
of the economy.
M*7)+$7+(+/!7" is concerned -ith the economy as a -holeC -e focus on
the big picture. We develop an overall vie- of the economic system and -e
study total or aggregate economic behaviour.
Thus. -hile /!7)+$7+(+/!7" studies the operation of the economy at the
level -here basic decisions are made. /*7)+$7+(+/!7" focuses on
aggregate economic behaviour and the aggregate performance of the
economy.
!nother important distinction is bet-een 6+"!'!,$ and (+)/*'!,$
$7+(+/!7". ! 6+"!'!,$ statement is an ob9ective statement of fact. !
(+)/*'!,$ statement involves an opinion or value 9udgement.
It is also important to understand the central concepts of scarcity. choice and
opportunity cost.
1.3 ECONOMICS DEFINITIONS
G++%: ! tangible ob9ect that is capable of satisfying human -ants.
S$),!7$: !n intangible action that is capable of satisfying human -ants.
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S7*)7!'&: ! condition in -hich it is impossible to satisfy all human -ants
for goods and services@ the central concept in economics.
E7+(+/!7*& %!"*%,*('*.$%:
&escribing any individual -ho receives a substantially smaller share of
goods and services than average. regardless of the reason.
T)*%$-+--: The act of choosing one alternative at the e1pense of another.
O66+)'u(!'& 7+"':The value of the second best choice that is given up -hen
a first choice is ta*en.
R*'!+(* 7#+!7$: ! decision that results in the greater benefit at the least
possible cost.
C$'$)!" P*)!bu": ! phrase that means all else remain eEual or
unchanged.
19; ECONOMIC PROBLEM
The problem of resource allocation has three broad dimensions@
0#*' goods or services -ill be produced and in -hat EuantitiesF
These are output questions.
H+8 -ill each of the goods and services be producedF Go- much of
the scare resources -ill be used in the production of each goodF
These are input questions.
F+) 8#+/ -ill the various goods and services be producedF Who
-ill receive the goods and servicesF Go- much of them -ill they
receiveF !nd -here -ill the production occurF These are
distribution questions.
19: DIFFERENT CATEGORIES OF GOODS
'onsumer goods @ - &urable
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- Semi durable
- on-durable
)inal goods and intermediate goods
+rivate and public goods
Economic goods and free goods
Gomogeneous and heterogonous goods
19< FACTORS OF PRODUCTION
There are four main factors of production@
atural resources 6or land8.
$abour.
'apital and
Entrepreneurship
atural resources and labour are sometimes called +rimary factors of
production. -hile capital and entrepreneurship are called Secondary factors.
!nother possible distinction is bet-een Guman <esources 6$abour and
entrepreneurship8 and non-Guman resource 6$and and 'apital8.
1.7 PRIMARY, SECONDARY AND TERTIARY SECTORS
The production of goods and services in a country occurs in three broad
sectors@ +rimary. Secondary and Tertiary.
The 6)!/*)& sector deals -ith the production of ra- materials such
agricultural. fishing. forestry and mining.
The "$7+(%*)& sector is the manufacturing part of the economy in -hich
ra- materials and other inputs are used to produce other goods. This
includes the beneficiation of primary products 6e.g canning fruit and
vegetablesC processing minerals into minerals products such as steel8. and
the manufacturing of consumer goods 6such as clothing. foot-ear and
furniture8 and capital good 6such as machinery. buildings. roads and
rail-ays8.
The '$)'!*)& sector comprises the services and trade sections of the
economy. It is often referred to as the services sector.
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UNIT 2
291 INTRODUCTION TO NAMIBIA
amibia is often described as !frica"s optimist and -ith good reason. ot
only does it en9oy one of the continents most pleasant. peaceful and
politically stable environments but also its infrastructure rivals many
developed countries.
7ccupying an area of 2D(.25D sEuare *ilometres. and a population of
appro1imately 1.D million people. its population density of less than t-o
people per sEuare *ilometre is one of the lo-est in the -orld.
! vast country. even by !frica standards. amibia is situated on the south-
-estern !tlantic coast of the sub-continent. bordering !ngola. ,ambia and.
for a short distance. ,imbab-e. to the north. South !frica to the south and
0ots-ana to the east.
29191 OBAECTIBES
Students must have good understanding and be able to analyse the main
economic sectors and activities of amibia. Students must also be able to
e1plain and discuss@
amibian Macro-Economic !nalysis
!nalyse amibia"s main economic sectors
!nalyse amibian government structures
#overnment long and short term plans
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This unit covers the medium and long term plans of amibia under
the auspices of the ational +lanning 'ommission
29294 FACTS ABOUT NAMIBIA
amibia has one of the most stable political environments in !frica. <uled
by a multi-party system. it has a democratic constitution highly regarded by
the international community. Its president is voted in directly by the
electorate for a five year term -ith a ma1imum of t-o terms and supported
by a prime minister and cabinet. +arliament comprises of t-o houses@ one is
directly elected and the other indirectly by the country"s regions.
The country has an abundance of natural resources. !mong these are a -ide
range of mineral deposits. including -orld class diamonds and uraniumC
copper. lead. Iinc. gold. semi precious stones. industrial minerals. salt and
fluorspar. Its rich fishing grounds. -ith their stoc*s of both demersal and
pelagic species. place the country among the top 1= nations in the
international fishing industry.
Such valuable resources mean that mining and fishing are t-o of the most
important economic sectors. together -ith agriculture and tourism. Ma9or
crops include pearl millet. -heat. maiIe. groundnuts. beans and cotton. and
there is a thriving red meat industry. Tourism is a rapidly gro-ing sector.
and is becoming a ma9or foreign e1change earner and generator of income
for the nation.
amibia offers e1cellent opportunities for investment across all these and
other sectors. Most of the country"s primary resources are e1ported. -hile
almost all of its consumer goods are imported. This is particular scope for
investment in manufacturing for both local and international mar*ets.
!s one of the 1( members states of the Southern !frican &evelopment
'ommunity 6S!&'8. amibia has preferential trade lin*s to the %== million
inhabitants of the sub-region. than*s to its e1cellent transport infrastructure.
S!&' membership is complemented by that of the 'ommon Mar*et for
Eastern and Southern !frica 6'7MES!8. -ith its 2D= million consumers.
amibia also belongs to the Southern !frica 'ustoms /nion 6S!'/8.
affording duty and Euota free access to the mar*et in South !frica and
others.
IUM FIN 1127 / FIN - 111 12
In addition. it is a signatory to the 'otonou !greement. giving duty free
access to the European /nion for a -ide range of manufactured goods and
agricultural products. amibia also has duty and Euota free access to the
lucrative /S mar*et under the !frica #ro-th and 7pportunity !ct 6!#7!8.
2.3 Economic System an Economic !isto"y o# Nami$ia
Economic system is the -ay in -hich the economy of a country is
organised. The government plays an important role in any economic system
and the influence of the government on the economy partially determines
economic system in use. It is important for every amibian citiIen to really
*no-n the pros and cons of different systems in order to be able to choose
the best system for our country. 7nly -ith proper *no-ledge of all the
different economic systems. can a responsible choice or decision be made.
When deciding on the effectiveness of an economic system. the follo-ing
t-o aspects should be considered.
6a8 'reating Ma1imum -ealth
6b8 EEual distribution of -ealth
F!(*(7!* I("'!'u'!+("
The <eserve 0an* of amibia too* over all functions of central ban*ing that
-ere previously handled by the <eserve 0an* of South !frica. in 1HH=. The
0an* of amibia became fully operative after introducing amibia"s o-n
currency in September 1HH%.
In 1HHD. the 0an*ing Supervision !ct -as enacted to strengthen ban*ing
supervision. 0y incorporating the 0asle core principles into the !ct. the
amibian authorities sought to align the countryJs ban*ing practices and
standards -ith those accepted internationally. !mong the prominent
issues dealt -ith in the !ct. is the limitation on money laundering and close
supervision of pyramid schemes.
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There are no- five commercial ban*s operating in amibia in addition to
the +ost 7ffice savings 0an*. The ban*ing industry in amibia is highly
competitive as evidenced by the similarity in interest rates and service fees
charged by these ban*s. )irst ational 0an* of amibia and Standard 0an*
amibia are the t-o largest ban*s in terms of mar*et capitalisation. 7ther
financial institutions include building societies. insurance companies and
public finance institutions. including the &evelopment )und of amibia and
the !gricultural 0an* of amibia.
!ll ban*s provide comprehensive domestic and international services. Short-
term and life insurance. estate planning and factoring are some of the
ancillary services provided by the ban*ing sector.
There are plans by government. in partnership -ith the private sector. to
reform the financial mar*et system to allo- for the introduction of financial
instruments such as parastatal bills. debentures and bonds and negotiable
certificates of deposit. The changes are aimed at accelerating the
development of a domestic money mar*et. foreign e1change mar*et. and
local inter-ban* lending. -hich is still underdeveloped.
29; INBESTMENT CLIMATE
29;91 I(,$"'/$(' I(7$('!,$"
amibia offers e1cellent investment opportunities through a range of ta1
incentives. a liberal investment climate and natural resource endo-ments. Its
E+, policy positions the country as an ideal focal point for regional trade
-ithin Southern !frican. The primary focus has been on promoting
manufacturing. fishing. mining. agriculture and tourism. Through a number
of trade agreements. amibia offers vast opportunities to investors in e1cess
of original benefits from the E+, status and ta1 incentives. With the
e1ception of S!'/. the country has entered into agreements and is part of
numerous other regional structures such as '7MES!. the $omK I?
'onvention and S!&'.0ilateral trade agreements also e1ist -ith ,imbab-e
and ,ambia.
29;92 C$)'!-!7*'$ +- S'*'u" I(,$"'/$('
IUM FIN 1127 / FIN - 111 1(
0enefits accruing to holders of such certificates consist of@
+referential access to foreign e1change to repay foreign debt. royalty or
similar charges. remit branch profits and dividends as -ell as proceeds of
sale of an enterprise.
The right to retain abroad foreign e1change earnings from e1ports.
E1emptions from restrictions regarding categories of business reserved for
amibians.
+rotection against e1propriation of business.
29: S6$7!* I(7$('!,$" -+) M*(u-*7'u)!(. E('$)6)!"$"
The follo-ing incentives apply eEually to local and foreign companies
registered as manufacturers.
4=> corporate ta1 abatement for 4 yearsC linear phasing out over a further
1= years.
e- investment:relocation pac*age A a further negotiated ta1 pac*age.
!ccelerated depreciation on factory buildings - -ritten off over 1= years.
E1port promotion costs ta1 deductible at 124 -1;4>.
Training costs ta1 deductible at 124>.
&irect production -ages deductible at 124>.
Industrial studies available at 4=> of cost.
'ash grants loans of 4=> of approved e1port promotion e1penses.
29< E>6+)' I(7$('!,$"
The E1porters Incentive grants an D=> allo-ance on ta1able income derived
from the e1port of manufactured goods. -ith the e1ception of fish and meat
products. irrespective of -hether the goods have been produced in amibia
or not.
2.7 ECONOMIC SYSTEMS
!n economics system is a set of rules or understandings that govern ho-
scarce resources are used to produce goods and service that satisfy human
-ants.
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Throughout history all communities have had economic systems. These
economic systems include capitalism. command and mi1ed economies.
2.7.1 Ca%ita&ism Economic System
'apitalism is an economic system in -hich the factors of production are
o-ned and controlled by private citiIens 6people8.
Go-ever one needs to understand a range of economic assumptions and
concepts before they are able to fully appreciate the -ay capitalism
functions either in theory or reality.
)or capitalism to function. the conditions and institutions described in the
follo-ing section must e1ist.
+rofit motive
+rivaty property
)reedom of choice
'ompetition
$imited role for government
&ecentraliIed &ecision ma*ing
'apitalism is an economic system -here there is no central planning and all
production functions are privately o-ned -ith minimal state control.
C#*)*7'$)!"'!7" +- 7*6!'*!"/
6a8 P)+6$)'& !" *).$& 6)!,*'$& +8($%9
!ll factors of production are o-ned by private individuals. -ho may buy
and sell as much as they -ant. +rivate o-nership. opposed to state
o-nership. is one of the cornerstones of the fees mar*et system.
6b8 F)$$%+/ +- 7#+!7$
Every individual is free to choose his occupation -ithin the limits of his
e1perience. training and Eualification.
The consumer has the freedom to choose -hat he -ants to buy -ith his
limited income.
IUM FIN 1127 / FIN - 111 15
Every individual has freedom to choose bet-een savings and immediate
consumption.
6c8 N+ 7$(')* 6*(
+roduction and consumption as -ell as the remuneration of the production
factors are planned and organised by individuals. -ith no government
interference.
6d8 C+/6$'!'!+(
!ny product can enter a profitable production line. in other -ords different
producers can supply the same product.
Advantages o Ca!"ta#"s$
1. ! capitalist system leads to economic efficiency due to the profit
motive.
2. ! capitalist system offers an individual freedom of choice because
there are no elements of force.
%. This system contributes to rapid development of Technology and the
creation of increased production for the -hole community.
(. This system sho-s better results in the allocation of resources and the
optional distribution of goods and services.
%"sadvantages o Ca!"ta#"s$
6a8 Self-interest -eighs more heavily than the interest of the
community.
6b8 Mar*et forces determine employment not government. high
employment levels cannot al-ays be maintained.
6c8 The capitalist system leads to economic fluctuations li*e
recession. depression and inflation.
6d8 In the capitalist system there is an uneven distribution of
-ealth. -hich leads to ineEuality of economic and political
po-er.
6e8 +ressure groups may be formed by producers 6called
monopolies8 by employees 6called trade unions8 or even by
IUM FIN 1127 / FIN - 111 1;
consumers. These pressure groups may e1clude or harm other
groups and ma*e competition impossible
Cont&o##ed Ca!"ta#"s$
+ure capitalism does not e1ist any-here in the -orld. because there is
al-ays some -ay that the government interferes.
Desc"i%tion o# Cont"o&&e Ca%ita&ism
The system could be described as a combination of the private and public
sector. but -ith very little intervention from the state.
2.7.2 Comman Economic System
It is an economic system that relies on a central authority to o-n most
resources and to ma*e the three central economic decisions. 7n the other
hand. socialism is an economic system in -hich government o-ns and
controls the factors of production.
2979C S+7!*!"/
)actors of production are o-ned and controlled by the government 6people8
-hose basis for operation is@
Service motive
+ublic property
'ommunity
'entralised decision ma*ing
A%,*('*.$" +- S+7!*!"/
'ommunity concern
+eople driven economy
o unhealthy competition
Economic stability
Inclusive economy
IUM FIN 1127 / FIN - 111 1D
3ob security due to the fact that #overnment is fully involved and very
active
D!"*%,*('*.$" +- S+7!*!"/
$imited individual freedoms in running of the economy
Inefficiency due to semi and:or uns*illed labour
0loated labour force due to allegiance and government obligation to
create employment for all
)alsified economic indictors
$imited choice on the mar*et
2979; M!>$% E7+(+/&
0oth private and public institutions e1ercise control of the factors of
production for basically t-o reasons@
Ma1imum creation of -ealth
EEual distribution of -ealth
Mi'e Economic System
!n economic system that is similar to capitalism but has some
characteristics of other economic systems. 0oth public and private
institutions e1ercise economic control.
2.( NAMI)IAN *O+ERNMENT STR,CT,RE
T#)$$ b)*(7#$" +- .+,$)(/$('
The 'onstitution sets up three branches of government@ The e1ecutive
6+resident and 'abinet8. the legislature 6+arliament8 the 9udiciary 6the
courts8
The legislative branch ma*es la-s. the e1ecutive branch puts them into
action. and the 9udicial branch interprets and enforces them.
IUM FIN 1127 / FIN - 111 1H
The po-er to run the government is divided up amongst three different
branches so that there can be a system of chec*s and balances. This means
that the three branches *eep an eye on each other and share duties. This
helps to ma*e sure that no one in the government becomes too po-erful. and
that the governmentJs po-er is not abused.
The central plan* of our 'onstitution is the separation of po-ers bet-een
the $egislature. the E1ecutive and the 3udiciary. -ith in-built chec*s and
balances. )or the proper development of our country. there must be
continuous interaction bet-een the three branches of State. !ll three
branches must -or* in concert to defend and protect our fragile democracy
E>$7u'!,$ b)*(7#
The e1ecutive branch of government consists primarily of the +resident. the
+rime Minister and 'abinet. It puts into action the la-s that are made.
P)$"!%$('
The +resident is the Gead of State. -hich means that he or she is in charge
of the e1ecutive branch of the government. The +resident is also the
'ommander-in-'hief of the amibia &efence )orce.
!ny man or -oman -ho is at least %4 years old and -ho -as born in
amibia or has a amibian parent can try to be elected as +resident.
The +resident is elected directly by eligible citiIens of amibia through
voter casting using secret ballots. The +resident must get more than half of
all votes cast to be elected. The +resident remains in office for a term of five
years and can only serve for t-o terms.
The +resident appoints the +rime Minister and the &eputy +rime Minister.
The +resident also establishes ministries and appoints Ministers and &eputy
Ministers to direct them. !ll Ministers and &eputy Ministers must be
members of the ational !ssembly. This means that many of the most
important government officials -ill be people -ho serve as the
representatives of the people.
IUM FIN 1127 / FIN - 111 2=
The +resident also appoints many other important government officials.
including the !ttorney-#eneral and the 7mbudsman. E1perts must advise
the +resident on -hich people have the right s*ills for certain government
positions.
The +resident also has other po-ers and duties. such as accrediting
!mbassadors and Gigh 'ommissioners from other countries. negotiating
and signing international agreements and presenting special a-ards to
people -ho have served amibia -ell.
The +resident is not a Member of +arliament but attends the house on
special occasions. such as the opening of +arliament at the beginning of each
year. and to give the annual State of the ation !ddress. The +resident has
no vote in +arliament.
If the +resident becomes too ill to function. or dies -hile in officeC the +rime
Minister -ill act as +resident for the remainder of the term. or until the
+resident is able to resume his or her duties. If the +rime Minister is
unavailable. the duties are performed by the &eputy +rime Minister. If the
&eputy +rime Minister is not available. the 'abinet ma*es an appointment.
The +resident must ta*e an oath to uphold. protect and defend the
'onstitution as the Supreme $a- of amibia. The ational !ssembly can
remove a +resident from office if the +resident disobeys the 'onstitution or
any other la-. or is impeached. T-o-thirds of the members of the ational
!ssembly must decide that the +resident should be removed. 6This po-er to
remove the +resident is one of the -ays that the legislative branch *eeps a
chec* on the po-er of the e1ecutive branch.8
!ny action ta*en by the +resident can be revie-ed and changed by the
ational !ssembly. if t-o-thirds of the members of the ational !ssembly
thin* that this is necessary. This is another part of the balance of po-er
bet-een the e1ecutive branch and the legislative branch.
C*b!($'
The 'abinet is a group of government officials -ho advise the +resident.
The members of the 'abinet are the +resident. the +rime Minister. the
&eputy +rime Minister and the Ministers of each government department.
IUM FIN 1127 / FIN - 111 21
Some of the duties of the 'abinet are@
to advise the +resident
to supervise the -or* of ministries. government departments and
parastatals and to ma*e a budget for the government each year
to ma*e plans for the development of amibiaJs economy
to give draft la-s called LbillsL to the ational !ssembly. -hich may
decide to ma*e them into la-s
to ma*e decisions about foreign policy 6the political and economic
relationships bet-een amibia and other countries8
to advise the +resident on -hich international agreements amibia
should agree to as -ell as on matters related to national security and the
maintenance of la- and order
to ma*e sure that apartheid. tribalism and colonialism never return to
amibia. and to decide ho- to help people -ho have suffered from these
-rongs in the past.
to attend meetings of the ational !ssembly and to be available for the
purposes of any Eueries and debates pertaining to the legitimacy. -isdom.
effectiveness and direction of #overnment policies.
L$.!"*'!,$ b)*(7#
P*)!*/$('
+arliament has t-o parts@ the ational !ssembly and the ational 'ouncil.
These t-o form +arliament.
N*'!+(* A""$/b&
The ational !ssembly has the po-er to ma*e la-s for amibia. The
ational !ssembly consists of ;2 members -ho represent political parties
elected by the voters. and 5 non-voting members appointed by the +resident.
The members of the ational !ssembly must represent all the people of
amibia. They must be guided in their decisions by the 'onstitution. by the
public interest and by their o-n conscience.
IUM FIN 1127 / FIN - 111 22
The ;2 members of the ational !ssembly are elected every five years on a
proportional representation. +roportional representation means that each
political party submits a list of its preferred candidates before an election.
?oters cast their ballots for a party and not for a candidate. !fter the
election. parties -ill be represented in the ational !ssembly in proportion
to the support they received. In other -ords. if a political party receives 5=>
of the vote. it -ill receive 5=> of the seats in the ational !ssembly.
The advantage of this system is that it ma*es it possible for small parties to
be represented in government. The disadvantage is that members of the
ational !ssembly may have stronger loyalties to their political party than
to the voters.
The ational !ssembly has the po-er to ma*e any la-s that are in the best
interests of the people of amibia. so long as the la-s are not in conflict
-ith the 'onstitution.
The ational !ssembly also has the po-er to approve the budget for the
government each year and to decide ho- much individuals and businesses
should be ta1ed. It must approve all agreements bet-een amibia and other
countries.
The ational !ssembly must ta*e -hatever steps are necessary to uphold
and defend the 'onstitution. It has a duty to ma*e sure that apartheid.
tribalism and colonialism .do not return to amibia. and it must decide ho-
to help people -ho have suffered from these -rongs in the past.
The ational !ssembly has the po-er to decide to hold a referendum on
Euestions of national concern. It is li*e an election. e1cept that the voters
choose an opinion rather than a political party.
N*'!+(* C+u(7!
The ational 'ouncil helps the ational !ssembly -ith its tas* of ma*ing
la-s.
The ational 'ouncil has t-o members from each of the 1% regions of
IUM FIN 1127 / FIN - 111 2%
amibia. ma*ing a total of 25 members.
Shortly after independence. the +resident appointed a group of e1perts
*no-n as the &elimitation 'ommission to decide -here to dra- the
boundaries of the ne- regions. This 'ommission recommended that there
should be 1% regions. This &elimitation 'ommission also decided ho- to
divide the regions up into constituencies. The +resident reappoints a
&elimitation 'ommission periodically to re-e1amine the -division of the
regions into constituencies. ! &elimitation 'ommission must be appointed
bet-een si1 to t-elve years after the last 'ommission -as appointed.
The residents of each region elect people from to the <egional 'ouncil. Each
<egional 'ouncil then chooses t-o of its members to serve on the ational
'ouncil for si1 years.
While the members of the ational !ssembly represent people in every part
of amibia. the members of the ational 'ouncil represent only the people
in their region. This system helps to balance the interests of each part of the
nation against the interests of the nation as a -hole.
The members. having been elected by the people in the various regions. are
the representatives of the people. The establishment of the house means that
the po-er has no- truly been ta*en to the people. 'onseEuently. the
representatives of the people. as representatives of the various regions. are
directly accountable to the people.
Au%!7!* b)*(7#
The 9udiciary includes all the courts of la- in amibia - the Supreme 'ourt.
the Gigh 'ourt and the $o-er 'ourts.
These courts can decide criminal cases 6-hen someone has been arrested for
committing a crime8 and civil cases 6disputes bet-een t-o individuals. such
as a divorce or an argument about -ho should pay for a car accident8. They
also interpret the la-.
!ll the courts are independent. This means that they follo- only the
'onstitution and the la-. o one can tell the courts ho- to decide a case. not
IUM FIN 1127 / FIN - 111 2(
even someone from one of the other branches of the government.
Su6)$/$ C+u)'
The highest court in amibia is the Supreme 'ourt. The head of this court is
called 'hief 3ustice. !t least three 9udges must -or* together to decide any
case in the Supreme 'ourt.
! decision of the Supreme 'ourt must be obeyed by all the other courts and
by all people in amibia. The Supreme 'ourt can hear cases -hich are
appeals from the Gigh 'ourt. It also has the special duty of ma*ing final
decisions on any Euestions about the 'onstitution and the fundamental rights
and freedoms that the 'onstitution protects.
H!.# C+u)'
The ne1t highest court in amibia is the Gigh 'ourt headed by the 3udge
+resident. The Gigh 'ourt listens to serious cases and ma*es decisions on
appeals from the $o-er 'ourts.
Su6)$/$ C+u)' *(% H!.# C+u)' @u%.$"
The +resident appoints all the 9udges of the Supreme 'ourt and the Gigh
'ourt. ! group of legal e1perts *no-n as the 3udicial Service 'ommission
recommends people -ith the right s*ills to be 9udges. and the +resident
ma*es the final decision.
!ll 9udges must ta*e an oath to defend and uphold the 'onstitution and to
fearlessly give 9ustice to all people -ithout pre9udice.
L+8$) C+u)'"
0elo- the Supreme 'ourt and the Gigh 'ourt are the $o-er 'ourts. These
courts decide cases that are not too serious.
Some $o-er 'ourts are magistrateJs courts. The decision-ma*er in these
courts is a magistrate. Magistrates are appointed by the MagistrateJs
'ommission in terms of the Magistrates !ct % of 2==%. The Magistrates
IUM FIN 1127 / FIN - 111 24
'ommission must ensure that magistrates are properly Eualified and
competent persons. It sets the pay. Eualifications. and other conditions of
service of magistrates. It is responsible for ensuring that appointment.
promotion. transfer and dismissal of magistrates ta*e place -ithout favour or
pre9udice. It must also ensure that magistrates are not improperly influenced
or victimised. This is intended to ensure that all magistrates act impartially
and independently -hen ma*ing their decisions.
7ther $o-er 'ourts are community courts. The 'ommunity 'ourts !ct 1=
of 2==% transforms traditional tribunals into the ne- community courts.
'ommunity courts have the authority to hear and decide cases arising under
customary la-. They apply the customary la- of the traditional community
in the areas -here they operate.
295 N*'!+(* P*((!(. C+//!""!+(
!rticle 12H of the 'onstitution reEuires the government to establish a
ational +lanning 'ommission to ma*e plans for national development. The
head of the ational +lanning 'ommission is the &irector-#eneral. -ho is
appointed by the +resident. The &irector-#eneral is the principal advisor to
the +resident on economic planning and can attend 'abinet meetings at the
reEuest of the +resident. The ational +lanning 'ommission !ct 14 of 1HH(
contains more details about the operation of this body.
The functions of the ational +lanning 'ommission include@
designing and monitoring economic and social plans and policies
planning for national and regional development
developing employment strategies
budgeting
carrying out economic and social research
collecting statistics and other data reEuired for planning 6such as the
regular national population censuses8
managing and coordinating international aid to amibia
The ational +lanning 'ommission is also in the process of developing a
policy on partnership bet-een government and civil society. The draft
IUM FIN 1127 / FIN - 111 25
policy. published in 7ctober 2==%. contains four ob9ectives@
to create a greater commitment for civic participation through the
promotion and encouragement of active citiIenship
to enhance the environment for civic participation and partnership
to bring government closer to the people and create partnership
opportunities that benefit government. civic organisations and civil
society
to enhance the capacity of partners 6government and civic organisations8
to enter into partnerships and 9ointly respond to development challenges
and opportunities in an efficient. effective and sustainable fashion.
29591 N*'!+(* D$,$+6/$(' P*("
The #overnment of amibia has adopted the practice of setting out five year
national development strategies. This process is spearheaded by the ational
+lanning 'ommission.
The )irst ational &evelopment +lan 6&+18 covered the period 1HH4:1HH5
to 1-HHH:2===. The Second ational &evelopment +lan 6&+28 covers the
period 2==1:2==2 to 2==4:2==5.
&+1 focused on reviving and sustaining economic gro-th. It set goals of
4> average gro-th in the gross domestic product. increasing investment.
increasing the real gross national income by 12>. and diversifying e1port
and import mar*ets to reduce the share of trade -ith South !frica. It also set
targets for employment levels. reducing ineEuities in income distribution and
reducing poverty.
&+2 continues and broadens the plan established in &+1. The ational
+lanning 'ommission conducted meetings and -or*shops -ith sta*eholders
to determine the issues and threats to sustainable development in amibia.
The ational +lanning 'ommission. line ministries. and sta*eholders
-or*ed together to create a plan that ta*es environmental and sustainability
issues into account -hen dealing -ith sectoral. cross-sectoral and regional
development.
IUM FIN 1127 / FIN - 111 2;
&+2 outlines policies that bring together different sectors of the amibian
economy. /nli*e &+1. &+2 loo*s at regional development issues.
)inally. &+2 also deals -ith other issues not addressed in &+1. including
poverty reduction. income distribution. GI?:!I&S. science and technology.
and private sector development.
29592 BISION 24C4
Since independence. the amibian government has regularly adopted 4-year
development plans. L?ision 2=%=L is a more long-term development frame-
-or* developed by the ational +lanning 'ommission. The long-term goal
for amibia is stated in ?ision 2=%= as follo-s@
The VISION for Namibia in 2030 is that the people of Namibia are
well developed, prosperous, health and !onfident in an atmosphere
of interpersonal harmon, pea!e and politi!al stabilit" and as a
soverei#n nation, Namibia is a developed !ountr to be re!$oned with
as a hi#h a!hiever in the !omit of nations. Namibia en%os&
'rosperit, Interpersonal (armon, 'ea!e and 'oliti!al Stabilit
The follo-ing eight themes have been identified as the ma9or issues for
future planning@
1. IneEualities and social -elfare
2. +eace and political stability
%. Guman resources. institutional and capacity building Macro-economic
issues
(. +opulation. health and development
4. atural resources and environment
5. 2no-ledge. information and technology
;. )actors of the e1ternal environment.
2.-.3 Fi"st Nationa& De.e&o%ment %&an /NDP10 /1--121--34
1---225550
IUM FIN 1127 / FIN - 111 2D
Ob@$7'!,$"
Stimulating and sustaining economic gro-th
'reating employment
<educing ineEualities in income distribution
<educing poverty.
S')*'$.!$"
+roviding an enabling environment for sustained economic development
Investing in human resources
+romoting participatory development and eEuity
Ensuring that development is sustainable
&efining and promoting amibiaJs international role
Ensuring that government supports +ublic Sector Investment +rogramme
6+SI+8
S$7+(% N*'!+(* D$,$+6/$(' P*( (NDP2)(2444/2441-244:/244<)
Its vision is LSustainable and eEuitable improvement in the Euality of life of
all the people in amibiaL
Ob@$7'!,$"
1. To reduce poverty
2. To create employment
%. To promote economic empo-erment
(. To reduce ineEualities in income distribution
4. To stimulate and sustain economic gro-th
5. To reduce regional development ineEualities
;. To promote gender eEuality and eEuity
D. To combat the further spread of GI?:!I&S
H. To enhance environmental and ecological sustainability
S')*'$.!$"
+romoting and strengthening an enabling environment for economic
gro-th and development
+romoting sustainable use of natural resources and environmental
IUM FIN 1127 / FIN - 111 2H
management
+romoting participatory development and eEuity
UNIT C
C91 SOUTHERN AFRICAN DEBELOPMENT COMMUNITYDS
ECONOMIES
C9191 OBAECTIBES
This unit unveils and e1poses students to S!&' countries" main economic
activities and related topics. Therefore students must *no-@
The S!&' Member state
!ims and ob9ectives of S!&'
The main economic activities of the respective countries
!nd compare and contrast the natural endo-ment of each country
ANGOLA
Situated at the north of amibia. Its land area is 1.2(; === sEuare
*ilometers. Its climate conditions are tropical and humid in the north and
sub-tropical -ith lo-er rainfall in the south. Its population according to
2==1 census is 1%.55 million. Its literacy level is (=>. #&+ is /SM H.H54
IUM FIN 1127 / FIN - 111 %=
billion and the #&+ per capital is /SM 545 billion in 2===. The main e1port
commodities are crude oil. diamonds. refined petrol 6high value
commodities8. The value of e1port -as /SM ;.H21 billion in 2===. Its main
e1port destinations are /S!. 0elgium. 'hina and Tai-an.
I/6+)'"
!ngola e1ports mainly the consumer capital. intermediate goods and food.
Its main import origin is South !frica. +ortugal. South 2orea. /S! and
)rance.
E7+(+/!7 P$)-+)/*(7$9
&espite the abundance of natural resources. !ngolaJs economy has been
devastated by decades of continuous -ar. !griculture. mining and
manufacturing sectors. -hich are the bac*bone of the countryJs economy.
have been -ea*ened by the -ar. !ngola -as rated the fourth largest
diamond producer in the -orld. has a siIeable iron mining industry and
thriving manufacturing sector. 0ut due to lac* of inadeEuate s*illed
personnel. absence of sound economic policies and -ar. the confusion result
has been a sever loss of economic gro-th.
The country has the potential to become one of the most important nations in
the S!&' region if the peace process continues and sound economic
policies are put in place.
The plan to build a larger refinery in the southern part of the country is a
positive step to-ards economic reconstruction.
!ngola has richest agricultural land and -as previously self-sufficient in
food production. State o-ned farming enterprises become unsuccessful
-hen -ar bro*e out coffee and sugar industries disappeared. To step up
economic recovery the government plans to be a member of the international
coffee organiIation. This -ill be done through an overhaul of the sector over
a t-o year period through liEuidation of some state o-ned coffee companies
and an invitation of investors to bid for largest plantation.
F!"#$)!$"
IUM FIN 1127 / FIN - 111 %1
!n attempt is currently being made to rehabilitate and moderniIe the
domestic fishing industry through donor assistance.
F+)$"')&
Timber production fell dramatically during the -ar and about 14====
hectors of eucalyptus. 'yprus and pine plantations are -aiting to be
rehabilitated.
T+u)!"/
This sector has been neglected despite the countryJs tropical climate. The
country is rich -ith beaches. rivers. mountains. -ildlife and cultural
attractions. The -ar has severely affected this sector and as a result the
-ildlife resources have been depleted and the hotel industry is run do-n.
Go-ever. refurbishment of e1isting hotels is under-ay and there are
opportunities for construction of ne- ones.
BOTS0ANA
0ots-ana is situated at the center of the S!&' region. sharing its borders
-ith amibia. ,ambia. South !frica and ,imbab-e. Its population is 1.5H
millions -ith a #&+ of /SM4.=% billions. #&+ per capita is /SM2H;5. Its
e1port value is /SM1.15 billion and an import value of /SM1.2 billion. Its
literacy is 5D.%>.
E>6+)'
The country"s principal e1port commodities comprise of diamonds. copper.
nic*el. beef and soda ash. The countryJs e1port destination is mainly the
European /nion.
I/6+)'
The principal import commodities are machinery. transport eEuipment. food
and beverages.
E7+(+/!7 P$)-+)/*(7$
IUM FIN 1127 / FIN - 111 %2
0ots-anaJs economy is doing very -ell according to the information above.
The country has policies and programmes aimed to-ards the full realisation
of a prosperous. productive and innovative nation. The uninterrupted gro-th
and soaring per capita since its independence in 1HH5 sho-s good economic
performance.
Go-ever. the countryJs efforts to diversify the economy are threatened by
the GI?: !I&S scourge -hich is a big challenge. The problem of GI? :
!I&S underlines the need for a continued thrust to-ards economic
diversification as a strategy for development.
D$/+7)*'!7 R$6ub!7 +- C+(.+ (DRC)
The &<' is situated at the central part of !frica. north east of !ngola. Its
area occupies 2.%(4.(1= sEuare *ilometers. Its climate is tropical. hot and
humid in eEuatorial river basin. cooler and drier in the southern highland and
cooler -etter in the eastern highlandJs north of the eEuator.
N*'u)* R$"+u)7$"
The country has cobalt. copper. petroleum. cadmium. industrial and gem
diamonds. gold. silver. Iinc. manganese. tin. germanium. uranium. radium.
bau1ites. iron ore. coal. hydropo-er and timber.
P+6u*'!+(
The country has a population of 45.524.=%H 62==%8. There is e1cess
mortality due to the GI?:!I&S Epidemic resulted in lo-er e1pectancy and
lo-er population gro-th. +opulation gro-th in 2==% stood at 2.H>. $ife
e1pectancy for men is (5 and 41 for -omen.
E7+(+/!7" +,$),!$8
The nation is endo-ed -ith a vast potential for -ealth. The #&+ is /M %(
billion 62==2 est.8 #&+ per capital is /M5==. #&+ composition by sector is@
!griculture 44> Industry 11 > and Services %( > in 2==2.
E>6+)'
IUM FIN 1127 / FIN - 111 %%
The country e1port value is /M1.2 billion in 2==% and the e1port
commodities are@ diamonds. copper. crude oil. coffee and cobalt. The e1port
partners in 2==2 -ere@
0elgium 5(.(> /S! 1%.(> ,imbab-e 5.;> and )inland (.H>
I/6+)'
Its import value stood at MDH= million in 2==2. The import commodities
-ere goods. mining machinery. transport eEuipment and fuels. Import
partners are@ 0elgium. South !frica. igeria. )rance. #ermany. etherlands
and 2enya.
0ased on the above findings one may conclude that this is a forgotten
paradise. a country -ith all the -ealth that e1ists on earth. yet the country is
poor. It has all the minerals on earth and the most fertile land -ith enough
-ater resources. The country"s potential -ealth declined and drastically
reduced the national output.
There has been an increase in corruption. inflation and lac* of openness in
government. &espite richness in natural resources. the devastation of -ar.
undeveloped economic infrastructure. and political instability hampers
economic development. The political uncertainty deters the potential
investors.
LESOTHO
It has a population of 2.2 million and its #&+ is /SM =.D1 billion. #&+ per
capita is /SM %5D 62==18. Its main e1ports are manufacture. food and live
animals. -ool and mohair. The e1port destinations are /S!. S!'/ and E/.
Its natural resources are diamonds. -ildlife. mohair. -ool and -ater. The
value of e1port is $M7 .25 billion.
I/6+)'
The country imports mainly capital goods. food and beverages. fuel and
energy. The imports originate mostly from S!'/. !sia. E/. and /S!. Its
economic productive sectors are mining. Though believed to have mineral
deposits. attempts to e1ploit them are limited due to lac* of investors.
IUM FIN 1127 / FIN - 111 %(
A.)!7u'u)$
!gricultural production declined over past decades. and its contribution to
14.(> in 2==1. This is due to the populationJs dependence on agriculture for
livelihood. therefore agriculture production is mostly for subsistence. The
shortfall -as also facilitated by the drought conditions that affected most of
the S!&' region. Several strategies -ere put in place in order to reduce
dependence on food import from S! and protect domestic producers.
$ivestoc* production contributes substantially to rural income. 'attle e1port
accounted for one third of e1port.
F!"#$)!$"
)ish production is limited to village level fishpond pro9ects.
I(%u"')&
The manufacturing sector e1perienced gro-th in 2==1 of ;.=> the
depreciation of $oti aided the performance -hich as a result boosted demand
for manufactured e1port. The duty free access to the /nited State of !merica
mar*et offered under !#7! resulted in an increase in investments.
T+u)!"/
Tourist accommodation is being continually developed. and there are
number of hotels. mountain lodges. national par* and a variety of
restaurants. Efforts to develop the tourism industry aim at 9ob creation and a
boost of foreign currency earnings. They plan to promote small holder
agriculture and support the handicraft industry.
MALA0I
It has a population of 12.H2 million. #&+ is /SM1.D billion and #&+ per
capita is /SM1(1.==. E1port commodities include tobacco. tea. sugar.
ground nuts and rice. Its e1port value is /SM7 .D% billion. It imports mainly
IUM FIN 1127 / FIN - 111 %4
consists of fuel. machinery and eEuipment. The value of import rates is
/SM=.(D billion. This sho-s a good economic position. The e1port
destinations are <S!. /S!. #ermany. etherlands. 3apan and /2. The
country receives its main imports from <S!. ,imbab-e. ,ambia. /2. 3apan
and #ermany. 0ased on the above information the country is sho-ing good
economic independence. The country is mainly dependent on the
agricultural sector for both e1port earnings and subsistence farming in the
rural areas. +rivate sector is revie-ed as the main economic engine of
gro-th. Go-ever the performance has been unsatisfactory in recent years
due to macro-economic instability. high transport and infrastructure costs.
management constraints and involvement in the economy by the government
through statutory corporations. Through the government"s various support
programmes and liberal economic regime. the country stands to benefit from
international trade. The favourable economic policies give investors an ideal
investment environment. for economic development.
MAURITIUS
Mauritius is an independent island republic situated in the Indian 7cean to
the east of Madagascar. It forms part of the Indian 7cean island group
associated -ith !frica. Its population 1.2 million and its land area is 2.=2=
sEuare *ilometers. The principal sectors are manufacturing. tourism te1tile
and sugar cane processing. The countryJs population is educated.
hard-or*ing and governed by sound economic policies. !lthough the
agriculture and manufacturing industries are significant in Mauritius.
tourism and te1tiles ma*es up the bul* of the countryJs income.
#&+ M (.4 billion in 2==2 #&+ per capita M%.=== #&+ annual gro-th 5>
E1port M2%.% million 61HH28
Import M1%5.;million 61HH28
E>6+)'
The main e1ports include sugar. tea. coffee. te1tile and *nit-ear. timepieces
and parts. tobacco. cut and uncut diamonds. electric appliances and parts.
I/6+)'
IUM FIN 1127 / FIN - 111 %5
Its imports include cement. chemical products. cotton. fuel. gem stones. iron
steel and petroleum products. The European /nion is the largest mar*et for
Mauritius goods and the free mar*et economy is operated by very active
participation of the private sector.
)rom observing the economic indicators. the countryJs economy is heavily
dependent on e1ternal trade despite very -ell educated and hard-or*ing
people. Go-ever. -ith sound economic policies on trade it sho-s the
government commitment to-ards economic sustainability and development.
MOEAMBIFUE
I(%!7'+)"
+opulation is 1;.54 million 62==18
#&+ /SM %.%; billion
#&+ per capita /SM 2=2s
E1ports /SM =.%; billion
Imports /SM 1.24 billion
$iteracy rate 2D>
+rincipal e1ports are pra-ns. cashe- nuts. sugar. cotton. copra. citrus. -hile
principal import are machine. transport eEuipment. food product and
petroleum.
The main e1port destinations are South !frica. /S!. 3apan. Spain. +ortugal
and ,imbab-e. Main imports 7rigins@ S!. /S!. 3apan. +ortugal and
,imbab-e. The natural resources are pra-ns. fish. marine resources.
coconuts. coal and gems.
0ased on the above indicators. the country is doing relatively poorly and
more effort is needed if viable economic gro-th is to be realised. !lthough
the country has achieved virtual self sufficiency in grain. cereal and cassava
production -ith the latter t-o e1ceed national needs. agriculture
productivity remains -ell belo- the regional average and the sector has
considerable une1ploited potential.
The civil -ar that destroyed the transport system and other infrastructure
contributed to slo- development in the industrial sector. The #&+ per capita
sho-s a lo- living standard. The lo- level of education is also a setbac*.
NAMIBIA
IUM FIN 1127 / FIN - 111 %;
amibia is situated in the south -est of !frica. She has an area of D2(25D
sEuare *ilometers and has a population of 1.D%=%%= million of -hich 41.2>
is female. The annual population gro-th rate according to 2==1 census is
2.5>
C!/*'$
Throughout most of the country climate is arid. sub-arid and changing to
sub-tropical in the far northeast.
E7+(+/!7 +,$),!$8
amibia is blessed -ith rich natural resources. -ell developed infrastructure
and political stability. Go-ever amibiaJs economy is still strained by the
old colonial structures. It products are not consumed internally and imports
most of the manufactured goods including food. amibiaJs economy is
heavily dependant on climate conditions and -orld mar*et prices. #&+ -as
%.1= billion /SM in 2==1 and #&+ per capital -as 1H1; /SM in 2===.
!griculture. mining. fishing. based manufacturing. tourism and transport and
communication constitute important productive sectors in amibia.
In 2==2 the inflation rate average 11.% and decreased -ith a record lo- of
%.H in 7ctober 2==% and remained constant thereafter.
E>6+)'
The main e1port bet-een 1HH% and 2==1 -ere done in the area of minerals
42> of -hich ;=> -ere diamonds. )ish products amounted to 24> and
livestoc* 6animals8. meat and animal products amounted to 1%>. amibia
also e1ported other high value products li*e uranium. The value of
amibiaJs e1port is /SM1.2 billion in 2===. amibiaJs main e1port
destinations are the /S!. /nited 2ingdom. South !frica. Spain. #ermany.
Italy. )rance. !ngola. S-itIerland. the etherlands and 3apan.
I/6+)'
amibia imports most of the manufacturing goods. The value of import is
/SM 1.2D billion dollars. a figure that sho-s a deficit. S.!. #ermany. )rance.
Italy. 3apan. /nited 2ingdom and /S! are amibiaJs import origins -ith
S.! constituting the main source of import. The amibian economy is
IUM FIN 1127 / FIN - 111 %D
heavily depended on South !fricaJs main import. 'ommodities are food.
staff. oil. machinery and chemicals.
amibia is a peaceful environment -ith a lo- crime rate. friendly people.
natural attractions. modem services and -ell-established infrastructure and
up to date telecommunication services. These ma*e amibia an ideal
location for investors. The country en9oys easy access to a regional mar*et
of over %4= million consumers as -ell as access to -orld mar*et through its
trading partners E/. S!'/. S!&'. 'omesa and 'otonov agreement.
The construction of the Trans 2alahari and Trans 'aprivi high-ays provides
a fast and comfortable lin* bet-een amibiaJs port of Walvis 0ay on the
!tlantic coast and landloc*ed neighbouring countries. The high-ay provides
a regional transport corridor. The rail-ay net-or* also plays a vital role in
amibiaJs economy.
The modem telecommunication infrastructure in amibia is HD> digital and
provides direct dialing facilities of the -orld. The ultimate goal is of this
combined effort is to develop businesses and promote trade in the S!&'
region. 0ased on the factors mentioned above. the conclusion is that
amibiaJs economy is -ell managed despite the fact that little processing is
ta*ing place and the country is a main e1porter of ra- materials.
There are ne- mining opportunities through cutting and processing of
precious stone.
E%u7*'!+(
The amibian education system provides education for all. !t least H=> of
all children attend school. Go-ever. more effort needs to be put on sectors
that are vital to economic gro-th e.g. agriculture. mining. fishing.
engineering etc.
SEYCHELLES
This is a tiny Island in the Indian 7cean. Its population is =.=D= million. Its
population gro-th is =.(H=>. The land area is (44 sEuare *ilometres. #&+
is /SM(D=.= million. #&+ gro-th is D.44>. #&+ per capita is /SM5.=24.
E1port values /SM=.12 billions. Import /SM=.%( billions.
IUM FIN 1127 / FIN - 111 %H
N*'u)* R$"+u)7$"
Sea and marine resources.
E>6+)'
The principal e1ports are canned tuna. fish. and cinnamon bar*. The main
e1port destinations are /2. )rance. Italy. #ermany and 3apan.
I/6+)'
The principal imports include consumer goods. machinery chemicals. fuel
and food. Most of its imports originate from Italy. <S!. )rance. /2.
Singapore and 3apan.
E7+(+/!7 P$)-+)/*(7$
The economy e1perience a fall in 2=== at a rate of 4.(> due to decline in the
high-end tourist business. Manufacturing increased only -ith 1.4> o-ing to
e1pansion of the Indian 7cean tuna company and e1pansion of construction
etc. The government is running a large deficit to the range of 14> #&+ and
these deficits are largely due to domestic borro-ing and dra- do-ns in the
reserve. The country"s vulnerability to e1ternal shoc*s particularly the recent
do-n turn in tourist activities affect the countryJs economy. Go-ever the
government is see*ing to strengthen the bilateral ties -ith their neighbours
and India. The country desperately needs economic policies and reforms
despite a -ea* global tourism mar*et.
SOUTH AFRICA
South !frica is one of the highly developed countries in !frica. +opulation
is ((.DD million 62==18. #&+ is /SM155.;= billion. #&+ per capita is
/SM%;l(. E1port value is /SM%1(% billions. Import value is /SM2;.2=
billions.
E>6+)'
IUM FIN 1127 / FIN - 111 (=
Main e1ports are metal. gold. diamonds. machinery and transport
eEuipment. The e1port destinations are /2. /S!. 3apan and #ermany. <S!
e1port comprises of high value commodities and it is self-sufficient -hen it
comes to food production and for consumption giving the countryJs economy
stability.
I/6+)'"
South !frican imports include machinery and transport eEuipment.
chemicals and fuels. The import origins are /2. #ermany. /S! and 3apan.
E7+(+/!7 P$)-+)/*(7$
The countryJs economic indicator sho-s that the country is doing relatively
-ell. The good #&+ per capita indicates good standards of living. The #&+
and balance of payment is an indication that the country has some reserves
that -ill sustain good living standard of its vast population.
The country has an abundant supply of resources. -ell-developed financial.
legal. communication. and energy and transport sectors. Modem
infrastructures and a stoc* vibrant e1change ran*s among the ten largest in
the -orld. The government"s development strategy in the area of education.
health. social development. security. land reform and poverty eradication is a
positive move.
S0AEILAND
It is the smallest country in !frica. +opulation is 1.1= million. +opulation
gro-th is 1.H(>. #&+ is /SM1.22 billion. #&+ per capita is /SM1.I=H.
E1port is /SM=.D2 billion. Import is /SM=.H% billion. $iteracy level is ;H>.
The country is the second largest sugar cane producer and gro-s other
important cash crops li*e citrus fruits and cotton. It has the most forest
plantation in !frica -hich gro-s non-native pine and Eucalyptus. These t-o
have been instrumental in the development of the papers and -ood product
industries. There are also sections of surviving natural forests. The mineral
sector is in transition as most of high-grade iron ore has been mined out.
Tourism attracts large numbers of both Europeans and South !fricans
ma*ing it a ma9or industry.
E>6+)'
IUM FIN 1127 / FIN - 111 (1
These include soft drin* concentrate. sugar -ood pulp and refrigerators.
Main e1port destinations are <S!. /S!. MoIambiEue. ,imbab-e and /2.
I/6+)'
They include manufactured goods. machinery and eEuipment and food.
Main import origins are <S!. Gong 2ong. 3apan. Tai-an and MoIambiEue.
E7+(+/!7 P$)-+)/*(7$
The country #&+ gro-th fell to 2> in 1HHH resulting in decline in #&+ per
capita. &espite a trade deficit. the current account balance for the last fe-
years has been positive as a result of intra regional tariff. remittances an
foreign direct investment. The %.1> gro-th in <S! economy -ill help
improve gro-th in S-aIiland. !nalysis of the sectoral performance of the
economy sho-s an increase in output in the manufacturing sector in 2==2.
Sugar industry recorded a significant increase in output. The country is
highly infected by the GI?:!I&S epidemic -ith one of the -orld"s highest
infection rates.
TANEANIA
)ormed up by the union of the former colonial territories of Tanganyi*a and
,anIibar. It is situated in east !frica. Its population is %5 2%2 =;( million in
2==1. Its area is H(4 =D; sEuare *ilometres.
E7+(+/&
TanIaniaJs economy is a reflection of its relatively stable political situation.
The economy has progressed steadily since the implementation of
macroeconomic stabilisation and structural reform programmes in the H=s.
The main sectors are agriculture. tourism. telecommunication. mining.
fishing. forestry. manufacturing and energy industries. !griculture
accounted for D=> of its e1port and (;.5> of #&+ and is the main source of
many opportunities including employment. TanIania has many energy
resources li*e natural gas. biomes. hydro po-er. geothermal. coal. solar and
-ind po-er. Go-ever these resources remain un-e1ploited. The attractive
foreign Investment !ct of 1HH; led to the creation of TanIania Investment
IUM FIN 1127 / FIN - 111 (2
'entre -hich identifies possible investment opportunities and helps potential
investors in navigating any procedural barriers that might e1ist.
E>6+)'
It"s e1ports include sisal. tea. manufacturing goods. cotton. cashe- nuts.
minerals and tobacco products. 'offee farming is the main e1port product.
The e1port destinations are India. /2. #ermany. 3apan. The etherlands and
0elgium.
I/6+)'
The country imports consumer goods. machinery and transport. crude oil
and industrial ra- materials. The import origin is <S!. 3apan. /S! and
India.
C+//u(!7*'!+( *(% I(-)*"')u7'u)$"
!lthough the country has t-o separate rail systems -ith different gauges and
authorities. they are both in poor conditions and need e1tensive repair. The
roads are in poor state and some are not even tarred. this slo-s the speed of
economic development due to limited transport connection. Go-ever. &ar es
Salaam not only for TanIania but also for other land loc*ed neighbours.
The above point indicates the countryJs economic potentiality. With the
government e1pansion of the energy industry and e1ploitation of their
energy resources. combating corruption in government. the country has
potential for economic gro-th.
EAMBIA
+opulation 11.1= millions
#&+ /SM %.;; billions
#&+ per capita /SM %(=
E1ports /SM =.D= billions 62===8
Imports /SM 1.=1 billions 62===8
IUM FIN 1127 / FIN - 111 (%
+rincipal e1ports are@ copper. cobalt. lead. ,inc and tobacco. +rincipal
imports are@ crude oil. chemicals. machinery. and food stuffs. Main e1ports
destinations@ 3apan. India. Saudi !rabia and Thailand. Main import origin@
/S!. S!. ,imbab-e. /2 and Saudi !rabia. atural resources@ 'opper.
Iinc. cobalt. lead. -ildlife and agricultural products.
$iteracy@ ;H>
!part from a deficit in balance of payments. the country has a -ell educated
population and a variety of mineral resources that could do -ell
economically. Go-ever. it has concentrated more heavily on copper
production as it -as earning good foreign e1change and ignored other
sectors.
EIMBAB0E
+opulation is 1%.DH millions. #&+ is /SMH.=5 billions. #&+ per capita is
/SM542. E1port value is /SM1.(D million. Import value is /SM1.4% million.
$iteracy is D=>.
E>6+)'
The country"s principal e1port commodities comprise of tobacco. gold.
ferroalloys and cotton. The countryJs e1port destinations is mainly <S!.
/2. /S!@ #ermany. 3apan and 'hina
I/6+)'
The principal import commodities are machinery and transport eEuipment.
chemical and petrol. The import origins are <S!. /S!. /2. 0ots-ana.
3apan and #ermany.
E7+(+/!7 P$)-+)/*(7$
The country is blessed -ith vast natural resources including minerals. arable
land and -ildlife and opportunities e1ist to e1ploit these resources.
!griculture plays an important role in the countryJs economy. !part from
e1periencing some deficit in its balance of payments -hich could do better
considering its natural resources. The government continued
implementation of its economic reform policies and the land grabbing
resulted in a hostile political and macro-economic environment. &rought
IUM FIN 1127 / FIN - 111 ((
conditions over the past year and lac* of foreign e1change left most
companies operating belo- capacity. -hile others have closed do-n. The
negative international perceptions follo-ing the implementation of the land
reform programmes have compounded the countryJs economic difficulties.
Therefore a lot needs to be done to bring the economy to standard.
UNIT ;
This unit -raps up this module by loo*ing at the main features that ma*e
amibia a preferred investment and tourism destination.
It is vital that students research to have a good understanding as to -hy
amibia is attracting )oreign &irect Investment 6)&I8 and activities
boosting economic gro-th.
;9191 OBAECTIBES
Students must *no- the follo-ing@
amibia is preferred compared to other countries -ithin the region
and beyond.
7utline and discuss the main features that ma*e amibia stand out.
2no- international organisations amibia is affiliated to or member
of and the rationale behind that.
Main aims. ob9ectives and strategies of the international organisations.
;92 0HY NAMIBIA
IUM FIN 1127 / FIN - 111 (4
+eace. stability and good governance
)irst -orld road. rail and air infrastructure
E1cellent telecommunications net-or*
<eliable. good Euality po-er supply
Wide intercontinental mar*et access
$iberal investment regime
#enerous investment ta1 incentives
)ast. efficient and transparent bureaucracy
$o- inflation
Stable foreign e1change reserves
Strategically located. lo- cost and efficient port.
;9C SOUTHERN AFRICA DEBELOPMENT COMMUNITY
The Southern !frican &evelopment 'oordination 'onference 6S!&''8.
-hich -as the forerunner of the Southern !frican &evelopment 'ommunity
6S!&'8. -as formed in $usa*a. ,ambia. on 1 !pril 1HD=. follo-ing the
adoption of the $usa*a &eclaration 6entitled Southern !frica@ To-ards
Economic $iberation8 by the nine founding member states.
The &eclaration and Treaty establishing the 'ommunity. -hich replaced the
'oordination 'onference. -as signed at the Summit of Geads of State or
#overnment on 1; !ugust 1HH2. in Windhoe*. amibia.
!ims of the S!&'
T#$ /*!( *!/" +- '#$ S+u'#$)( A-)!7*( D$,$+6/$(' C+//u(!'& *)$:
To harmonise the political and socio-economic policies and plans of
the member states.
To mobilise the people of the region and their institutions to ta*e
initiatives to develop economic. social and cultural ties across the
region. and to participate fully in the implementation of the
programmes and pro9ects of the S!&'.
To create appropriate institutions and mechanisms for the mobilisation
of reEuisite resources for the implementation of the programmes and
the operations of the S!&' and its institutions.
To develop policies aimed at the progressive elimination of obstacles
to free movement of capital and labour. goods and services. and of the
peoples of the region generally among member states.
To promote the development of human resources.
IUM FIN 1127 / FIN - 111 (5
To promote the development. transfer and mastery of technology.
To improve economic management and performance through regional
cooperation.
To promote the coordination and harmonisation of the international
relations of member states.
To secure international understanding. cooperation and support.
mobilise the inflo- of public and private resources in the region.
To develop such other activities as member states may decide in
furtherance of the ob9ectives of S!&'.
T#$ +b@$7'!,$" +- SADC *)$ '+:
!chieve development and economic gro-th. alleviate poverty.
enhance the standard and Euality of life of the people of Southern
!frica and support the socially disadvantaged through regional
integrationC
Evolve common political values. systems and institutionsC
+romote and defend peace and securityC
+romote self-sustaining development on the basis of collective self-
reliance. and the interdependence of Member StatesC
!chieve complementarity bet-een national and regional strategies
and programmesC
+romote and ma1imise productive employment and utilisation of
resources of the <egionC
!chieve sustainable utilisation of natural resources and effective
protection of the environmentC
Strengthen and consolidate the long standing historical. social and
cultural affinities and lin*s among the people of the <egion
<egional groupings such as 6Southern !frican &evelopment 'ommunity8
S!&' aim to bring neighbouring countries together. The goal is regional
integration. <egional integration is the process by -hich t-o or more nation-
states agree to co-operate and -or* closely together to achieve peace.
stability and economic development. /sually integration involves one or
more -ritten agreements that describe the areas of cooperation in detail. as
-ell as some coordinating bodies representing the countries involved.
This co-operation usually begins -ith economic integration and as it
continues. comes to include political integration. Marcomic* 62==48
IUM FIN 1127 / FIN - 111 (;
describes regional integration by considering a scale. -ith = representing no
integration at all bet-een t-o or more countries. 1= -ould represent
complete integration bet-een t-o or more countries. This means that the
integrating states -ould actually become a ne- country - in other -ords.
total integration. The intention of regional integration is to form a centre that
-ill promote the interests of all the member countries - as the old adage says
Nthere is strength in numbers".
In !frica. regional integration is necessary considering that the ma9ority of
!frican countries are small. -ea* and poor. Integrating the countries of
!frica -ill help them in dealing -ith the issues of globalisation that pose a
serious threat to poor nations. !t international stages such as the /nited
ations. World Trade 7rganisation. International Monetary )und and the
World 0an* the voices of smaller countries such as $esotho. S-aIiland.
Seychelles. 0enin. etc are not heard.
With regional integration it is assumed that smaller countries such as
S-aIiland. $esotho and 0ots-ana can come together and form one
community li*e the Southern !frica &evelopment 'ommunity 6S!&'8.
In doing this. they can form a collective po-erful force that -ill enable them
to deal -ith burning issues li*e eradication of poverty. globalisation and
social epidemics li*e GI?:!I&S.
$oo*ing at the cases of TanIania. &emocratic <epublic of the 'ongo 6&<'8
and !ngola can highlight the benefits of regional integration. The TanIanian
economy has stagnated since the eighties and failed to develop. It is only
no- that it is active member of the S!&' that its economy is beginning to
gro-. &<' and !ngola that have been ravaged by political shenanigans
-here -arlords and rebels -ere the order of the day are learning from the
other member countries li*e South !frica and 0ots-ana that are politically
stable. 'ommunities such as the S!&' have organs of politics and
economic developments A organs that deal -ith the promotion and creation
of democratic cultures -hile on the other hand facilitating economic
developments to member countries.
SADCD" D$7$(')*!"$% A66)+*7#
0efore 2==1 the countries forming the S!&' identified many common
challenges. These challenges are divided into sectors as follo-s@
Environment and $and Management
Inland )isheries. )orestry and Wildlife
IUM FIN 1127 / FIN - 111 (D
Tourism
'ulture. Information and Sport
Marine )isheries and <esources
)inance and Investment
Guman <esources &evelopment
Trade and Industry
Employment and $abour
)ood. !griculture and atural <esources
Water 'onservation and &istribution
Transport and 'ommunication
$egal !ffairs
Transport. 'ommunications and Meteorology
$egal !ffairs
Gealth
Mining
'rop +roduction
The S!&'. as of !ugust 2==1. restructured and adopted a centralised
approach in running the integration and development of its 1( member
countries. 0efore the restructuring the S!&' had divided and centralised the
sectors indicated in the diagram to all the 1( member countries. The aim of
decentralising or internationalising the sectors -as for S!&' to guide and
coordinate regional policies and programmes on a country-by-country basis.
With the restructuring S!&' no- has a more centralised approach through
-hich the sectors are grouped into four &irectorates. namelyC
Trade. Industry. )inance and Investment
Infrastructure and Services
)ood. !griculture and atural <esources
Social and Guman &evelopment and Special +rogrammes
!ll these &irectorates are based in the S!&' Gead Ouarters in #aborone.
0ots-ana. With the previous decentralised strategy. each member country
-as allocated a sector to coordinate. Each country -as tas*ed -ith a
particular sector or sectors. The responsibility for the country charged -ith
particular sectors involved proposing sector policies. development strategies.
setting priorities. and processing pro9ects for inclusion in the sectoral
programme. monitoring progress and reporting to the S!&' Gead Ouarters.
Sectors -ere allocated to each member country based on the countryJs
perceived strengths and opportunities.
IUM FIN 1127 / FIN - 111 (H
The follo-ing is an illustration of ho- sectors -ere allocated to each
member country based on strengths and opportunities found in that
particular country.
1. !ngola Sector responsibility@ Energy Strengths@ !ngola is rich in mineral
resources e.g. oil
2. 0ots-ana Sector responsibility@ !gricultural <esearch Strengths@
0ots-ana is mainly a farming country.
%. $esotho Sector responsibility@ Environment and $and Management
Strengths@ $esotho is mountainous -ith many rivers
(. Mala-i Sector responsibility@ Inland )isheries. )orestry and Wildlife
Strengths@ $a*es yasa and ?ictoria
4. Mauritius Sector responsibility@ Tourism Strengths@ Mauritius is
essentially a tourism country
5. MoIambiEue Sector responsibility@ 'ulture. Information and Sport
Strengths@ MoIal Transport. communications and meteorology
;. amibia Sector responsibility@ Marine )isheries and <esources
D. South !frica Sector responsibility@ )inance and Investment Strengths@
!dvanced medical facilities
H. S-aIiland Sector responsibility@ Guman <esources &evelopment
Strengths@
1=. TanIania Sector responsibility@ Industry and Trade Strengths@
11. ,ambia Sector responsibility@ Employment and $abour Strenghts@
Mining
12. ,imbab-e Sector responsibility@ )ood agriculture and natural resources
Strengths@ 'rop production
The centralised or global strategy has seen all these sectors grouped into four
&irectorates and based in S!&' Gead Ouarters in #aborone. 0ots-ana. as
already indicated. The four &irectorates are the core activities of the S!&'
headEuarters. The previous decentralised policy appeared to promote
regional integration and to ensure that each countryJs strengths and
opportunities are e1plored. The previous system also appeared to have been
-or*ing considering that a country that is lac*ing in a particular area can
rely on the other country that has strengths on that area. Say for e1ample. if
S-aIiland is e1periencing -ater shortages. it can source -ater supply from
$esotho -ith its large rivers.
When S!&' follo-ed the decentralised approach it reasoned along the
follo-ing lines@
IUM FIN 1127 / FIN - 111 4=
1. To offload -or* done at the S!&' Gead Ouarters to the 1( member
countries. allo-ing the S!&' Secretariat time to focus on critical issues.
2. To give each member country a sense of control and a feel of belonging to
the community by giving responsibilities in each member country.
%. The S!&' also realised that there is fle1ibility in the decentralisation of
S!&' functions. more rapid local responsiveness and attuning the
'ommunity to local conditions of each member country.
&ecentralisation ensured that the decisions ta*en are influenced by
conditions and cultures of each member country. &ecisions ta*en are often
informed decisions. evertheless on the operational level the decentralised
country by country sectors -ere too comple1 to manage and coordinate.
+ro9ects -ere initiated but in most of the cases they -ere not completed.
The decentralised approach also involved large sums of money that -ere not
al-ays available. With the decentralised approach. member countries -ere.
instead of integrating became more polarised since each country -as
focusing in developing sectors in their o-n countries and sa- little benefits
in -or*ing -ith other member countries. With the decentralised approach. in
reality and practice. there -as no integration. These are reasons that forced
S!&' to re-loo* the decentralised approach and eventually restructured
itself by 2==1.
R$"')u7'u)$% SADC: D$,$+6/$('" *(% *7#!$,$/$('"
With the restructuring of the S!&'. the entire 21 sectors -ere grouped and
centralised. 7ut of this restructuring process emerged four directorates all
based in #aborone. 0ots-ana.
The main reasons -hy the S!&' centralised its functions are the follo-ing@
S!&' -anted to facilitate coordination. S!&' sa- the decentralised
1( sectors dispersed in the 1( member countries difficult to
coordinate.
To ensure that decisions are consistent -ithin the entire S!&'
system. When decisions are dispersed around 1( countries. country
managers can ma*e decisions at variance -ith those at the S!&'
Gead Ouarters in 0ots-ana. 'entralisation of functions reduces this
ris*.
IUM FIN 1127 / FIN - 111 41
0y centralising all the functions in S!&' Gead Ouarters in 0ots-ana.
the Secretariat may find it easier to speed up the integration process
-ithout circulating document decisions to various dispersed sectors.
With the present centralised strategy. and through the <egional Indicative
Strategic &evelopment +lan S!&' has mapped out a strategy that -ould
allo- member countries" economies to gro- steadily to reach the targeted ;
per cent gro-th rate. This strategy centres on the t-in pillars of good
economic governance and good political governance.
Some Member countries have emerged as continental leaders in terms of
macroeconomic policies. and poverty reduction strategies. and institutional
building. These are@ 0ots-ana. Mauritius. amibia and South !frica. In
terms of the economic performance -ithin the <egion. !ngola is leading the
-ay -ith a 1%.D> gro-th rate. follo-ed by MoIambiEue -ith D> and
TanIania -ith 5.2>.
Improvements in gro-th rates have also been -itnessed in $esotho. amibia
and South !frica. 7n the +ublic Inde1 <an*ings. as contained in the #lobal
'ompetitiveness <eport. four S!&' Member States ran*ed among the top
ten. -ith 0ots-ana ran*ing first. The other three are South !frica. Mauritius
and TanIania 6<amsamy. 2==%8.
These developments and achievements reflect the success of a restructured
S!&'.
;9; EGPORT PROCESSING EONES
amibia offers some of the most attractive fiscal incentives in !frica via its
E1port +rocessing ,ones 6E+,8 regime. This provides a ta1 haven for
manufacturers. importers and e1porters. as -ell as a -ide range of
concession and benefits. 'ompanies granted E+, status can set up operation
any-here in amibia. In addition. there are specially developed industrial
par*s they can en9oy the same advantages. These are at Walvis 0ay. -here
the estate is run by an E+, management companyC at 7shi*ango. near the
!ngolan borderC and at 2atima Mulilo. at the eastern end of the 'aprivi
Strip.
There are no restrictions on industrial sector. !ny form of manufacturing or
value-added process is eligible. provided it is focused on e1ports outside the
S!'/ region 6amibia. 0ots-ana. South !frica. $esotho and S-aIiland8.
IUM FIN 1127 / FIN - 111 42
Sales to local mar*ets of up to %= per cent production may be allo-ed on
reEuest.
! company -hich e1ports 9ust one of its productions can also apply for E+,
status by separating its e1port activities into a separate company.
Warehousing and pac*aging companies. other than those involved in fish
and meat processing. can also apply for E+, status.
The pac*age of benefits and incentives. -hich apply indefinitely. includes@
o corporate ta1
o import duties on imported capital eEuipment ra- materials
o ?!T. stamp or transfer duties
+ermission to hold foreign currency accounts in local ban*s
;9;91 E>6+)' P)+7$""!(. E+($ I(7$('!,$"
The flagship of amibia"s ta1 based incentives is the E+,-regime. $aunched
in 1HH5 by the E+, !ct. the E+, is no- vibrant and represents a -hole ne-
territory for the investor to e1ploit. In its short life span. amibia"s E+, has
attracted good response from countries as far as #ermany. 'hina. 0ritain.
'hile. Italy. Saudi !rabia. India. 'anada. 7man and $ebanon. 7ver 51
companies have been granted E+, status. 7f these. 14 E+, companies are
fully operational producing goods ranging from car parts to ostrich leather
products.
Enterprises -hich underta*e manufacturing. assembly. re-pac*aging and
brea*-bul* operations. -hich gear all or almost all of their production for
e1port mar*ets outside of S!'/. and -hich earn foreign e1change and
employ amibians. -ill be eligible for E+, status. They en9oy an attractive
range of both ta1 and non-ta1 benefits of unlimited duration.
Enterprises -ith E+, status do not pay corporate ta1. import duties. sales
ta1es. stamp or transfer duties. It is a totally ta1-free regime.
E+, enterprises may be eligible for a #overnment grant covering a part
of the direct training costs on the basis of pre-approved training plans.
once training is complete.
IUM FIN 1127 / FIN - 111 4%
E+, enterprises are allo-ed to hold foreign currency accounts in local
ban*s.
They also en9oy industrial calm as no stri*es or loc*-outs are allo-ed in
the E+,-regime.
'ompanies operating under the regime are free to locate their operations
any-here in amibia.
Through the 7ffshore &evelopment 'ompany. E+, enterprises have
access to factory facilities rented at economical rates.
'ee&en(es)
1. M(Co&$"(*+ J. T,e E-&o!ean Un"on) .o#"t"(s and .o#"("es. /estv"e0
.&ess) Bo-#de& Co#o&ado+ 1111.
2.'a$sa$2+ .&ega 2334 5#o6a# !a&tne&s,"! o& A&"(a. .&esentat"on at
T,e ,-$an &"g,ts (one&en(e on g#o6a# !a&tne&s,"!s o& A&"(a7s
deve#o!$ent+ 5a6o&one) SA%C
4.Int&od-(t"on to Na$"6"a Jo-&na#+ M"n"st&2 o T&ade.
8.Na$"6"a T&ade %"&e(to&2 2337
9.Nat"ona# %eve#o!$ent .#an 1 +2
:Na$"6"a7s.V"s"on 2343
7..os"t"ve E(ono$"(s+ '"(,a&d ;"!se2
IUM FIN 1127 / FIN - 111 4(