Commodity Flow in Namibia

Commodity Flow in Namibia September 2012 JAPAN INTERNATIONAL COOPERATION AGENCY Shinichi Mori and Miku Watanabe IMG Inc.

Table of Contents Introduction... 1 1. Food and Beverages... 2 1.1 Livestock and Meats... 2 1.2 Livestock Feed... 5 1.3 Fish and Processed Fish Products... 5 1.4 Vegetables and Root Vegetables... 5 1.5 Fruits and Nuts... 6 1.6 Beverages (including alcoholic beverages)... 6 2. Minerals... 8 2.1 Ores... 8 2.2 Zinc and Zinc Products... 8 2.3 Copper and Copper Products... 8 2.4 Iron and Steel... 9 2.5 Precious Stones... 9 3. Industrial Products... 10 3.1 Wood and Charcoal... 10 3.2 Industrial Salts, Stone, and Cement... 10 3.3 Mineral Fuels... 10 3.4 Industrial Machinery and Mechanical Appliances... 11 3.5 Electrical Machinery and Equipment... 11 3.6 Vehicles and Parts... 11 4. Daily Necessities... 12 4.1 Furniture and Bedding... 12 4.2 Rawhide and Leather (excluding Fur)... 12 4.3 Plastic Products... 12 4.4 Detergents/Candles... 12 Conclusion... 13 Exchange Rate (September 2012) 1 Namibian Dollar (NAD) = 9.51 Japanese Yen

Introduction Namibia is classified as a semi-developed country with a per-capita GDP of 4,270 USD (2010). 1 The Namibian economy is relatively stable, sustained by the exploitation of mineral resources, including diamonds and uranium, as well as the development of tertiary industries with a focus on the service sector. The Namibian economy is built around the central pillars of mining (uranium, zinc, precious stones, etc.), agriculture and livestock industry, fishery (fishing and fish processing), and tourism. Since Namibian road infrastructure is well developed and maintained, commodities from all over the world are imported across the South African border or Walvis Bay and transported to Angola, Botswana, Zambia and the Democratic Republic of Congo (DRC) via Namibia s domestic transit routes. While Namibia s logistics and distribution-related service industries have been developing rapidly, its international competitiveness in domestic manufacturing remains low. Namibia imports almost all industrial goods and half its domestic grain consumption. 2 With an extremely high unemployment rate (37.6% by the narrower definition), 3 the growth of domestic manufacturing and service industries is highly critical to Namibia s development. The Namibian government has announced a long-term national development plan entitled Vision 2030, which sets out a socio-economic development policy between 2004 and 2030. With the aim of realizing socio-economic development through industrialization, the National Development Plan 4 (NDP4, 2012-2016) sets the development of logistics capacity as one of the nation s strategic priorities along with tourism, manufacturing and agriculture. In order for the country to play a central role in the logistics and distribution networks within Southern Africa, the Namibian government plans to maintain and expand road and rail infrastructure, and develop the transport network connecting Walvis Bay and major domestic markets by 2017. The government of Japan has placed the development of Namibia s social and economic infrastructure as priority development issues, and is currently examining the possibility of assisting the development of logistics highlighted in NDP4. Given the recognition that specific information on the current situation of distribution in Namibia is lacking, JICA has requested its Advisor to the Namibia s Ministry of Trade and Industry to conduct this research study. Based on customs trade statistics and supplemental interviews, this research analyzes the flow of commodities for which gross exports exceeded 1 million Namibian dollars (NAD) in 2010. 4 1 World Bank (2010) 2 ibid. 3 Namibian Labor Force Survey (2008) 4 Commodities primarily for domestic consumption such as grain and dairy products are not discussed in the report. 1

1. Food and Beverages 1.1 Livestock and Meats The livestock industry plays a central role in the Namibian economy, accounting for 75% of gross agricultural production (2009). 5 In 2010, the gross export value of livestock was NAD 872 million (64,000 tons) with South Africa (96%), Angola (2%), and DRC (2%) being the primary destinations (cattle accounted for 79% of gross export value followed by sheep and goats at 21%). As for meat (excluding the below-mentioned processed products), Namibia exports mainly beef (26,000 tons) and mutton (13,000 tons). Beef and mutton exports accounted for a gross export value of NAD 1,300 million (45,000 tons), far exceeding the export value of livestock. 6 Of this total gross export volume, 78% was exported to South Africa, 17 % to the United Kingdom (U.K.), 2% to the Netherlands and 1% to Norway. Meat imports totaled NAD 576 million (40,000 tons) in 2010 with chicken accounting for 77% of meat import value, of which 75 % was frozen chicken. The originating countries for meat imports were South Africa (86% of imports value), Argentina (4%), the U.S.A (3%), Denmark (2%), and Brazil (2%). Table 1. Export Values and the Import Values of Livestock and Meat Export Import Amount Weight Amount Weight Livestock 872 million NAD 64,000 tons 50 million NAD 2,100 tons Meat 1,300 million NAD 45,000 tons 576 million NAD 40,000 tons Source: Central Bureau of Statistics in Namibia (2010) (a) Cattle/Beef Namibian cattle are pastured naturally for 2 years until they have grown to a size adequate for shipment. Since cattle are not given chemical feed, such as hormone preparations, and the quality of the meat is high, Namibian meat is traded at premium prices in European and South African markets. Namibia exports 26,000 tons of beef annually to EU nations, Norway, South Africa and Southern African nations, and 190,000 head of cattle to South Africa and Southern African countries. 7 Since the colonial era under the South African regime, Namibia has divided its land into 3 animal disease control zones with veterinary cordon fences (VCF) in order to protect cattle from the infectious diseases in wild animal populations. 8 Table 2, below, sets out the type of meat product and their export volumes and main destinations by district. 5 Agricultural Statistics Bulletin (2000-2009). 6 Central Bureau of Statistics in Namibia (2010). 7 Meat Board of Namibia (2010). 8 The first zone (FMD High-Risk Zone) includes Caprivi and the Mukwe and Ndiyona constituencies, located in the eastern Kavango. The second district (FMD Protection Zone) includes the western Kavango, the north of Tsumeb in Oshikoto, Ohangwena, Oshana, Omusati, and Kunene. Other areas are specified as FMD Free Zone. 2

Table 2. Meat Products, Export Volume, and Main Destinations of Each Production District Production Districts Products Foot-and-Mouth Disease (FMD) Free Zone Beef (boneless) Live Cattle FMD Protection Zone Export Volume 9,815 tons 44,875 tons 10,294 tons Destinations EU, Norway South Africa South Africa 3 FMD High-Risk Zone Beef Beef (bone-in, boneless) (bone-in, boneless) Approximately 10,000 tons (includes domestic consumption) Southern African countries except for South Africa Source: Meat Board of Namibia (2010) The transporting of livestock out of the Foot-and-Mouth Disease (FMD) High-Risk Zone or FMD Protection Zone is prohibited. As a result, all cattle exported to South Africa have been raised in the FMD Free Zone. Beef exported to EU nations are raised and slaughtered in the FMD Free Zone since beef slaughtered in the FMD Protection Zone are banned from export to the EU. 9 Consequently, the majority of beef from the FMD Protection Zone is exported to South Africa and the rest domestically consumed. Beef raised and slaughtered in the FMD High-Risk Zone is banned from export to either South Africa or EU nations, and therefore, are exported to other Southern African countries such as DRC, Angola, Zambia and also partly consumed domestically. Namibian households typically purchase beef either from local small-scale butcheries or supermarkets. Meats sold at supermarkets are mostly low-priced products imported from South Africa and partially Namibian highquality beef. 10, 11 Since South African cattle are typically raised on feedlots over a relatively short period of time (i.e. 3-5 months) before shipment, the quality of meat is only at an ordinary standard as compared to Namibian beef, resulting in South African beef being imported and provided to Namibian consumers at lower prices. (b) Mutton Mutton, being the second largest export in terms of volume after beef, accounted for 840,000 head (100,000 tons) being exported primarily to Angola and South Africa in 2010. 12 Due to a limited number of slaughterhouses available in the country, Namibia had previously exported live sheep to South Africa, and then imported the slaughtered and processed mutton for domestic consumption. In 2004 the Namibian government enacted the Small Stock Promotion Scheme in order to promote domestic mutton processing (slaughtering and packaging) with a view to increasing employment opportunities. 13 The policy imposed on farmhouses the requirement that 6 head of sheep be domestically slaughtered in order to export 1 head of live sheep. Since that time, small slaughterhouses have been established throughout the country and the number of sheep slaughtered in the country has increased dramatically. This has resulted in an increase in the consumption of domestically slaughtered mutton, and the import of mutton has been decreasing from between 1,400-2,000 tons in 2007 to 9 EU countries prohibit the import of the meat with bones, therefore, all the meat exported to EU countries including beef and muttons are boneless. 10 The import volume of meat was 3,300 tons in 2010 (FAO STATS). 11 Meat Board of Namibia (2010). 12 ibid. 13 The Scheme originally enforced a farmhouse to domestically slaughter one head of sheep to export one head of live sheep. The ratio of domestic slaughtering was increased to the current ratio of 6 to 1 in 2006.

330 tons in 2008. 14 The number of livestock exported to South Africa has also been decreasing every year, falling from 647,000 head in 2003 to 150,000 head in 2010. 15 (c) Goat With little domestic demand and few specialized slaughterhouses in the country, Namibia exports live goats to South Africa and Angola (a total of approximately 4,300 tons in 2010). 16 In South Africa the demand for goat is high due to a large Hindu population. (d) Pork For domestic pork consumption, 30% was produced domestically and the remaining 70% (3,000 tons in 2010) was imported from South Arica, Brazil, and Argentina. 17, 18 In order to expand domestic production and consumption of pork, the Namibian government launched a Pig Meat Promotion Scheme in 2012, which obligates retailers and traders to purchase Namibian pork as a condition for receiving an import permit. 19 (e) Chicken In 2010 Namibia produced 26,000 tons of chicken and imported 28,000 tons, both of which were mostly consumed in the country. 20, 21 In order to promote import substitution, domestic poultry producers have been working toward expanding the production of chicken, acquiring international quality-assurance standards, and meeting the export standards of the EU. 22 As a result, the domestic production of chicken has seen an increasing upward trend in recent years with domestic production volume having increased from 18,000 tons in 2005 to 26,000 tons in 2010; a more than 40% increase over the 5-year period. (f) Processed Meat In 2010 the export value of processed meat totaled NAD 122 million (5,200 tons) with the main export products being processed beef (43% of export value), smoked and salted beef (27%), and sausages (13%). While processed meats are exported to Southern African countries such as South Africa and Angola, these processed meat exports include transiting products such as products imported from South Africa, going through Namibia, and being exported to Angola, or entering from Walvis Bay and being exported to Angola and South Africa. 14 FAO STATS (2010). 15 Meat Board of Namibia (2010). 16 Estimated based on the data of Meat Board of Namibia (2010). 17 FAO STATS (2010). 18 According to an interview survey of the Meat Board of Namibia (2010). 19 The Meat Board issues the import permit up to triple the amount of the domestic pork purchase. (For example, if a retailer purchases 50 kilograms of the Namibian pork from a local slaughterhouse, an import permit for 150 kilograms of pork is issued). 20 FAO STATS (2010). 21 The import amount was estimated based on the data of Central Bureau of Statistics in Namibia (2010). The export volume of chicken was 570 tons (Central Bureau of Statistics in Namibia, 2010). 22 The Namibian: Namibian Chicken Up to standard (2010). http://www.namibian.com.na/news/fullstory.archive/2012/september/article/namibian-chicken-up-to-standard/ 4

1.2 Livestock Feed Although Namibia annually produces and consumes approximately 90,000 tons of feed, 23 the feed production volume is insufficient to support the domestic livestock industry. In 2010 Namibia imported approximately 160,000 tons of livestock feed (81% of the import volume was from South Africa; 12% from Zambia; and 6% from Angola). 24 The primary import is fodder (88,000 tons). 25 Export volumes totaled approximately 28,000 tons (200 million NAD in 2010) with major exports being fishmeal (15,000 tons), fodder (10,000 tons), and offal (2,600 tons). 26 The primary destinations for livestock feed were South Africa (67% of export volume), China (13%), Japan (6%), and Zambia (7%). Fishmeal and offal were primarily exported to South Africa and Asia while fodder was mainly exported to Zambia. 1.3 Fish and Processed Fish Products Despite abundant fishing resources and large catches, Namibia has limited domestic seafood consumption due to its small population and meat-oriented diet, leading to Namibia exporting approximately 90% of the gross fish catch. 27 Most of the fish from the Atlantic Ocean are exported after being headed, cleaned, sliced and packaged by fish processing companies in Walvis Bay and Lüderitz. In 2010 the gross export value of seafood was approximately NAD 4,800 million (260,000 tons). Major destinations for these exports were Spain (40% of export value), South Africa (17%), Italy (13%), and DRC (8%). Exports to Spain are partially consumed within Spain with the rest being further exported to Portugal, France, Italy, the Netherlands, and Germany. 28 The major commodities for the European market are hakes and soles; exported at NAD 20-50 per kilogram. Namibia primarily exports horse mackerel at NAD 7-14 per kilogram to South Africa. The gross value of fish and fish product imports is approximately NAD 260 million (40,000 tons), accounting for only 5% of the total export value. Namibia imports tuna and salmon from South Africa (34% of import value), Spain (32%), China (11%), and Morocco (9%). The gross export value of processed fish products was NAD 397 million (25,000 tons) in 2010. 29 Namibia exports processed sardines (15,000 tons), processed mackerels (2,100 tons), and other processed seafood products (3,400 tons) to neighboring countries such as South Africa, Angola, and Botswana. 30 Imports of processed sardines and tuna as well as smoked salmon are primarily received from South Africa with an import value of NAD 122 million. 1.4 Vegetables and Root Vegetables Namibia produced onions (19,800 tons), beans (19,100 tons), potatoes (12,500 tons), tomatoes (8,500 tons), cabbages (6,500 tons), and carrots (1,900 tons) in 2010. 31 A total of 22,000 tons (NAD 102 million) of Namibian produce was exported annually with onions and potatoes accounting for 75% of the gross export value. 32 The major destinations for these exports were Angola (51% of export value), South Africa (29%), and 23 Feed Master. http://www.feedmaster.com.na/ 24 Central Bureau of Statistics in Namibia (2010). 25 Ibid. The second largest imports after fodder is dog food and cat food, imported 22,000 tons in 2010. 26 Central Bureau of Statistics in Namibia (2010). 27 FAO Fishery Country Profile, http://www.fao.org/fi/oldsite/fcp/en/nam/profile.htm 28 ibid. 29 Central Bureau of Statistics in Namibia (2010). 30 FAO Fisheries and Aquaculture Department (2010). 31 FAO STATS (2010). 32 Central Bureau of Statistics in Namibia (2010). 5

the Netherlands (19%). 33 With a large amount of vegetables being transported to northern Namibia from South Africa, exports to Angola include vegetables produced both in Namibia and South Africa. Exports from Namibia to South Africa, on the other hand, are mainly surplus crops such as onions and potatoes that do not require refrigerated cargo transport. Usually, when trucks have vacant space returning from Namibia to South Africa, they are loaded with surplus crops. 34 The vegetable import volume now totals approximately 43,000 tons (NAD 261 million), almost double that of exports, with almost all of that volume coming from South Africa. 35 While a variety of vegetables are imported, primary imports are composed of potatoes (30% of import volume), frozen mixed vegetables (11%), onions (8%), and tomatoes (6%). 1.5 Fruits and Nuts Namibia produces grapes (21,500 tons a year), watermelons (4,000 tons), oranges (1,200 tons), melons (550 tons), and dates (375 tons). 36 In 2010 the gross export volume was 24,000 tons (NAD 275 million) of which grapes accounted for 81% (19,000 tons). 37 Namibian grapes are exported to Europe at a premium since they are harvested and shipped 2 months earlier than South African grapes. In southern Namibia, table grapes are cultivated as export-bound products; 88% of the gross domestic production amount is exported. 38 Due to the larger number of cargo ships departing from Cape Town as compared to Lüderitz and Walvis Bay, a large amount of agricultural products produced in Karas are transported to Cape Town via land route and exported from Cape Town ports to Europe. 39 The primary destinations for fruits are the Netherlands (45% of gross export volume), U.K. (20%), South Africa (18%), Russia (6%), and Angola (7%). 40 In addition to grapes, Namibia also exports apples (600 tons a year), plums (270 tons), watermelons (270 tons), and oranges (240 tons). 41 As apples and plums were not domestically produced, they are likely being imported from South Africa and then exported to Europe and Angola via Namibia. As for imports, Namibia imports various kinds of fruits and nuts such as apples, bananas, oranges and pears with the gross import volume of the fruits and nuts in 2010 being approximately 20,000 tons (NAD 151 million). 42 While fruits and nuts are imported exclusively from South Africa, those imports include products produced in South Africa as well as imported from third countries through South Africa. 1.6 Beverages (including alcoholic beverages) In 2010 the import volume of beverages was 76,000 tons (NAD 735 million), of which 87% was wine, beer, and juices imported from South Africa followed by beer and other types of beverages from European countries including Germany, the U.K., and Austria. 43 The gross export value for beverages, on the other hand, was 33 ibid. 34 According to the interview to the Namibia Agronomic Board (2012). 35 Central Bureau of Statistics in Namibia (2010). 36 FAO STATS (2010). Grapes and date palms are produced in the south. Oranges are produced in the north. Watermelons and melons are produced nationwide (According to the interview to the Namibia Agronomic Board, 2012). 37 FAO STATS (2010). 38 ibid. 39 According to the interview to the Namibia Agronomic Board (2012). 40 Central Bureau of Statistics in Namibia (2010). 41 FAO STATS (2010). 42 Central Bureau of Statistics in Namibia (2010). 43 ibid. 6

NAD 1,338 million; almost double that of imports. Major destinations for these exports were South Africa (65%), Angola (15%), Botswana (8%), Zambia (7%), and Southern African countries. 44 Exports were comprised primarily of Namibian beers to South Africa while for other Southern African countries exports were comprised of South African and European beverages in addition to Namibian beers. 44 Central Bureau of Statistics in Namibia (2010). 7

2. Minerals The production of the mining industry, including mineral resources such as diamond and uranium, totaled NAD 7,700 million and accounted for 8% of GDP in 2012. 45, 46 Diamond mining accounted for NAD 2,800 million while other types of mining represented NAD 4,900 million. 47 The gross export value for mining products reached NAD 10,900 million in 2009, accounting for 44% of gross export value of the country. 48 2.1 Ores In 2010 the export value of uranium ore was NAD 5,400 million, accounting for 86% of the gross ore export value (NAD 6,200 million). Uranium ore, mined near Swakopmund, is formed into yellow cake (roughly refined uranium ore) and exported to uranium processing factories all over the world. The second largest export, in terms of value, is zinc ore (NAD 750 million), mined mainly in the southern regions. The primary destinations for ores were France (29% of export value), Canada (29%), the U.S.A. (16%), China (13%), and South Africa (12%). 49 2.2 Zinc and Zinc Products Namibia produces 150,000 tons of zinc annually in Rosh Pinah, a town along the border with South Africa. Zinc is exported from Lüderitz to the world following refinement in refineries near the quarry. 50 In 2010, the export value of zinc and zinc products totaled NAD 2,604 million (157,000 tons). 51 The primary destinations for zinc and zinc products were Italy (44% of export value), the Netherlands (28%), the United Arab Emirates (6%), Malaysia (6%) and China (5%) 52. 2.3 Copper and Copper Products Namibia has copper mines in the central and the northeastern part of the country with copper being extracted mainly from mines in central Namibia. There is only one company mining copper in Namibia; Ongopolo Mining and Processing with the Matchless mine (located at 30 kilometers west of Windhoek), the Otjihare mine (located at 30 kilometers east of Windhoek), and the Kombat mine in Tsumeb. Copper ore extracted from these mines is transported by freight train to the refinery of the Namibia Custom Smelters (owned by Dundee Precious Metals) in Tsumeb. This refinery also refines copper ores from Zambia, South Africa, Zimbabwe, and Chile. Of the copper ores refined at the refinery, 40% are produced domestically and 60% imported. However, the refinery is currently operating at only half operational capacity. 53 Copper products refined in Tsumeb are exported overseas from Walvis Bay with the volume of those exports demonstrating an upward trend over the 45 Chamber of Mines of Namibia. http://www.chamberomines.org.na/main/about-us/about-us.html 46 CIA World Factbook (2012). 47 Chamber of Mines of Namibia. http://www.chamberomines.org.na/main/about-us/about-us.html 48 ibid. 49 Central Bureau of Statistics in Namibia (2010). 50 The major zinc mining companies are Exxaro (possessed 95% by Kumba Resources Pty Ltd. and 5% by PE Minerals) (http://www.exxaro.com/) and Skorpion Zinc Mine (possessed by AMBASE Pty Ltd) (http://www.skorpionzinc.com.na/). Each of them possesses 50% of the Rosh Pinah mine. 51 Central Bureau of Statistics in Namibia (2010). 52 ibid. 53 The refinery of Namibia Custom Smelters in Tsumeb has a refining capacity of 110,000 tons of copper annually. Since the refinery currently refines only 50,000 tons annually, it has a high potential to expand the production, import, and refinement of copper. (Namibia Custom Smelters. http://www.tsumeb.com.na/businessdirectly/industry/namibia-custom-smelters) 8

recent years. The national gross export value of copper and copper products in 2010 was NAD 1,545 million (45,000 tons) with the major export destinations being the Netherlands (36% of export value), Germany (24%), Japan (20%), and China (9%). 54 The gross import values of copper and copper products was NAD 489 million 55, 56 (10,000 tons) in 2010. 2.4 Iron and Steel In 2010 the import value of iron and steel was NAD 523 million (58,000 tons), mainly imported from South Africa (97%). 57 Imports included iron plates, iron materials and wires, which were either South African products or products from third countries imported via South Africa. Total export value was NAD 154 million (93,000 tons in 2010), equaling only one third of total import value. Iron and steel were exported to many countries including South Africa (48% of export value), Angola (13%), India (11%), and Zambia (9%). 58 Since 60% of export products were iron scrap, 59 it is assumed that most of the exports to South Africa were of such iron scrap. Exports to other countries were of iron or steel products from South Africa via Namibia. 2.5 Precious Stones Namibia produces a wide range of precious stones, such as diamond, amethyst, topaz, rose quartz, tourmaline, garnet and emerald. Namibian diamonds in particular are highly recognized by the international market for their size and quality. Since exporting precious stones in a raw form is prohibited, stones are exported primarily to Europe after undergoing primary processing or being processed into pendants, brooches, rings or necklaces at 12 foreign-affiliated jewelry processing companies in Windhoek. In 2010 the export value of precious stones reached NAD 8,950 million (4,200 tons). The major destinations for these products were the U.K. (53% of export value), South Africa (9%), the U.S.A. (6%), Belgium (5%), and Sweden (5%). 60 Namibia also imports raw diamonds from Botswana, South Africa and Canada, and then domestically processes and exports them. The import volume for precious stones was 994 tons (NAD 1,317 million) in 2010, accounting for 24% of the export volume, of which raw diamonds accounted for 94% of the gross import value. 61 54 Central Bureau of Statistics in Namibia (2010). 55 ibid. 56 The major importing countries of copper and copper products are Zambia (90% of the gross import value) and South Africa (10%). Zambia produces the highest amount of copper in Africa. In 2011, Zambia produced 790,000 tons of copper. (http://www.businessweek.com/news/2012-01-09/zambia-2012-copper-production-maysurge-to-highest-in-decade.html) 57 Central Bureau of Statistics in Namibia (2010). 58 ibid. 59 ibid. 60 ibid. 61 ibid. 9

3. Industrial Products 3.1 Wood and Charcoal In 2010 the gross import value of wood and charcoal was NAD 420 million (71,000 tons), most of which was lumber from South Africa (92% of import value). On the other hand, the gross export value of wood and charcoal was NAD 243 million (128,000 tons), of which 69% was charcoal. 62, 63 Major destinations were South Africa (53% of export value), the U.K. (15%), Angola (8%), and Poland (7%). Since Namibian charcoal is of good quality and is in high demand in Europe, exports to South Africa seem to include charcoal to be exported onward to Europe. 3.2 Industrial Salts, Stone, and Cement Produced mainly in Walvis Bay, most industrial salts are exported to Nigeria and the DRC. 64 Namibia produces stone such as fluorspar, granite, and marble, most of which are then exported in blocks to Southern African countries, Germany, and Italy to be used as the exterior and interior walls of buildings. In 2010 the gross export value of industrial salts, stone, and cement was NAD 536 million (940,000 tons). Industrial salt (49%) accounted for almost half of gross export value, followed by fluorspar (28%), granite (5%), and marble (5%). 65 The primary destinations for these exports were South Africa (36% of export value), Germany (21%), Nigeria (10%), Italy (10%), DRC (6%), and Angola (6%). 66 In 2010 the gross import value of industrial salts, stone, and cement was NAD 490 million (190,000 tons; 98% being from South Africa) with cement accounting for 84% of the import value. 67 Although the import volume was 11,000,000 tons in 2006, it has since decreased to only 190,000 tons in 2010 as domestic construction companies transitioned to domestically produced cement and concrete products after domestic cement factories started their operation. 68 3.3 Mineral Fuels Namibia s gross import value for mineral fuels was NAD 3,700 million (892,000 tons) in 2010 with petroleum oil accounting for 83% and natural gas for 1% of such import value. The primary exporters (including transit points) for this amount were South Africa (58% of the import volume), the Netherlands (13%), the U.K. (13%), and the British Virgin Islands (8%). Most imports from South Africa were assumed to be petroleum oil transported via South Africa. The gross export value of mineral fuels on the other hand totaled only NAD 480 million (137,000 tons in 2010) with the primary destinations being Panama (22% of gross export value), Botswana (14%), Angola (9%), and Spain (5%). 69 Since 98% of the gross export value was for crude petroleum, it can be concluded that exports from Namibia are mostly crude petroleum produced in third countries and exported via Namibia though the reason behind exports to Panama and Spain are not known. 62 Central Bureau of Statistics in Namibia (2010). 63 Ibid. In Namibia, charcoal is produced in Otjiwarongo and Grootfontein in the Otjozondjupa Region, Outjo in the Kunene Region, and Tsumeb in the Oshikoto Region (Legal Assistance Centre, Charcoal Production, Practices and Implications 2010). 64 MERSK Line (2011). 65 Central Bureau of Statistics in Namibia (2010). 66 ibid. 67 ibid. 68 ibid. 69 ibid. 10

3.4 Industrial Machinery and Mechanical Appliances Industrial machinery and mechanical appliances are imported from more than 30 countries, including South Africa (66% of import value), Germany (14%) and China (4%). In 2010 the gross import value was NAD 4,446 million (57,000 tons). 70 Gross export value stood at NAD 616 million (15,000 tons) with the primary destinations being South Africa (43% of export value), Angola (25%), China (11%), U.S.A. (3%), and Botswana (3%). 71 Most exports were products made in third countries and exported overseas via Namibia though the reason behind exports to U.S.A. and China are not known. 3.5 Electrical Machinery and Equipment Electrical machinery and equipment is imported from more than 30 countries, including South Africa (71% of import value), China (6%), Singapore (4%), and Hong Kong (2%). In 2010 the gross import value was NAD 2,508 million (31,000 tons). 72 Namibia mainly exported electrical machinery such as televisions and radios to Angola (47% of export value), Chad (34%), and South Africa (17%) with gross export value totaling NAD 364 million (3,500 tons). 73 Similar to industrial machinery and mechanical appliances, the majority of exports are produced in third countries and exported to neighboring countries via Namibia. It is estimated that 10% of imports are transit products. 3.6 Vehicles and Parts Vehicles and parts are mainly imported from South Africa (83% of import value), the United Arab Emirates (6%), the U.S.A. (2%), and India (2%). In 2010 the gross import value was NAD 5,470 million (74,000 tons). 74 In contrast, gross export value totaled NAD 1,105 million (25,000 tons), primarily exported to African countries, including Angola (64% of export value), South Africa (20%), Chad (10%), and Botswana (2%). 75 Since South African restricts the import of secondhand cars, only new vehicles can be exported to South Africa; therefore, vehicles exported to South Africa can be said to be new vehicles produced overseas and entering Namibia through Walvis Bay. Exports to Angola, Chad and Botswana include both new and used passenger cars, trucks and two-wheeled vehicles. All products are transit products except for a small number of used vehicles that have been used in Namibia and then exported to African countries. 70 ibid. 71 ibid. 72 Central Bureau of Statistics in Namibia (2010). 73 ibid. 74 ibid. 75 ibid. 11

4. Daily Necessities 4.1 Furniture and Bedding In 2010 the gross import value of furniture and beddings totaled NAD 855 million (29,000 tons), with the main countries of origin being South Africa (66% of import value), China (21%), Brazil (8%), Malaysia (2%), Germany (1%), and Norway (1%). 76 The gross export value on the other hand was NAD 264 million (2,700 tons) with exports to Angola (97%), and South Africa (3%). 77 Since domestic production is limited in Namibia, most exports to Angola are either South African or Chinese products transiting through Namibia. 4.2 Rawhide and Leather (excluding Fur) In 2010 the export value of rawhide was NAD 112 million (6,800 tons) with major destinations being South Africa (47% of export value), Italy (41%), Hong Kong (3%), and Switzerland (3%). 78 The primary commodities were cowhides (62% of import value) and sheep skin (16%). 79 4.3 Plastic Products In 2010 the gross import value of plastic products was NAD 1,160 million (60,000 tons) with the main countries of origin being South Africa (64% of import value), the U.S.A. (14%), Belgium (7%), and China (4%). 80 The gross export value was NAD 107 million (5,600 tons) with exports to Angola (63%), South Africa (25%), and Germany (6%). 81 Since Namibia does not produce plastic products, exports to Angola are likely products made in South Africa, or imports from other countries, entering Namibia through Walvis Bay before being re-exported. Exports to South Africa are likely re-exported products made in the U.S.A., Belgium, or China, which also enter Namibia through Walvis Bay. 4.4 Detergents/Candles The import volume of detergents and candles far exceeded the export volume with the import volume in 2010 being 68,000 tons (NAD 529 million). 82 The main countries of origin were South Africa (93% of import volume), Indonesia (5%), and China (1%). The export volume on the other hand was 3,500 tons (NAD 117 million), of which 97% (in value) was exported to Angola. 83 The majority of the exports to Angola were products produced either in South Africa, or third countries, and transiting via Namibia. 76 ibid. 77 ibid. 78 ibid. 79 ibid. 80 Central Bureau of Statistics in Namibia (2010). 81 ibid. 82 ibid. 83 ibid. 12

Conclusion This research has demonstrated that Southern African and European countries currently import and export a variety of products through Namibia with Namibia currently in the process of building the foundations necessary to assume a role as a distribution hub to the Southern African region. Figure 1 and Figure 2 below illustrate the import and export value of the Walvis Bay Port, Lüderitz Port and neighboring countries. Assuming that most exports to Angola, Zambia and Botswana are transit products due to the limited scale of the Namibian manufacturing industry, it can be estimated that 20% of total import value from Walvis Bay, Lüderitz, and South Africa is being re-exported to Southern African countries via Namibia. By the same token, the majority of imports from Botswana are either products from outside of Africa imported via Maputo in Mozambique or Durban in South Africa, or South African products imported via Botswana. In the future, as economic development progresses further in Southern African countries, the demand for vehicles and vehicle parts, industrial machinery and mechanical appliances, electrical machinery and equipment, and food and dairy products will expand. Likewise, domestic production of processed meat and fish is expected to expand in response to increasing demand due to the fact that these products are being exported to other Southern African countries. In relation to the mining sector, by increasing the mining and importing of copper ore, Namibia may expand the amount of copper refining and increase exports to Europe and Asia. As a result of the increasing demand for logistics and distribution services to neighboring countries, strengthening logistical capacity will be key to the economic development of Namibia. 13

Gross Import Value 39,950 million NAD Angola 1,388 million NAD Zambia 84 million NAD Walvis Bay Port 8,596 million NAD Botswana 10,059 million NAD Lüderitz Port 549 million NAD South Africa 13,625 million NAD Figure 1. Import Value from Neighboring Countries and at Major Ports Source: Calculated by the authors based on the data of Central Bureau of Statistics in Namibia (2010) Note: South Africa includes 5 customs offices along the border (Ariamsvlei, Klein Manase, Keetmanshoop, Noordoewer, and Orangemund). Angola includes 5 customs offices (Katwitwi, Omahenene, Oshikango, Oshakati, and Ruacana). In Botswana, there are 5 customs offices (Gobabis, Impalila Island, Mohembo, Ngoma, Trans Kalahari), while Zambia includes only 2 such offices (Katima Mulilo and Wenela). 14

Gross Export Value 35,953 million NAD Angola 2,631 million NAD Zambia 463 million NAD Walvis Bay Port 11,255 million NAD Botswana 1,934 million NAD Lüderitz Port 3,064 million NAD South Africa 4,698 million NAD Figure 2. Export Values from Namibia Source: Calculated by the authors based on the data of Central Bureau of Statistics in Namibia (2010) Note: South Africa includes 5 customs offices along the border (Ariamsvlei, Klein Manase, Keetmanshoop, Noordoewer, and Orangemund). Angola includes 5 customs offices (Katwitwi, Omahenene, Oshikango, Oshakati, and Ruacana). In Botswana, there are 5 customs offices (Gobabis, Impalila Island, Mohembo, Ngoma, Trans Kalahari), while Zambia includes only 2 such offices (Katima Mulilo and Wenela). 15