How the NDP5 intend on changing the game

How the NDP5 intend on changing the game


The draft 5th National Development Plan is out. It is permeated by the principle of sustainable development. As such, the plan frames the achievement of progress within a framework of ensuring the ability of future generations to thrive. In the same spirit, NDP5 has four key goals: Achieve Inclusive, Sustainable and Equitable Economic Growth; Build Capable and Healthy Human Resources; Ensure Sustainable Environment and Enhance Resilience; and Promote Good Governance through Effective Institutions.

However, NDP5 also has what is called ‘game changers’ – economic sectors or activities that are to receive special attention and yield benefits to the country. These are energy and water, agriculture, technical and vocation training, and industrial development. This is an excerpt from the NDP5 document.

Infrastructure development: Energy and water

Why energy is a game changer?
Economic activities are heavily dependent on the availability, reliability and affordability of power supply, as a production input. Energy is argued to be that “indispensable force driving all economic activities”. Therefore, the more the economy expands the more energy it will require in order to support industrialization. Access to electricity in rural areas not only will it improve the standard of living but will trigger economic activities for rural economy. Current local electricity demand stands at, 656MW, exceeding local generation capacity at 479MW. The sector is therefore, faced with a heavy reliance on energy imports from neighboring power corporations. Due to expected increase in economic activities especially in the mining, construction and manufacturing sectors, total demand is expected to reach 755MW by 2022. It is important to have adequate infrastructure in place, in terms of generation, storage and distribution not only to ensure the smooth running of economic activities, but also to ensure reliability of energy supply. Lack of adequate infrastructure is a bottleneck towards economic development.

What will be the Benefits?
• Low business cost
• Low imports and improved balance of payment
• Sprouting rural economy
• Food preservation in rural areas to prolong usage.
What needs to be done to achieve this objective?

Promotion of Independent Power Producers (IPPs): Energy demand is expected to increase at a rate equivalent to the accelerated pace of economic activities. The mining, water pumping, manufacturing, construction and urban growth are expected to be major drivers of energy demand. To meet this demand, a strategy to promote IPPs in the electricity supply industry is required.

Transformation of the current power market structure: One of the challenges is that the energy sector faces a monopolistic market, due to a single buyer and single seller. This market structure is making power unaffordable. This strategy will seek to introduce competition in the energy sector over electricity generation, transmission and trading. This will be achieved by modifying and improving the current market structure in a way to avoid monopolistic behaviors.

Why water is a game changer?
Like many other developing countries Namibia is struggling with water shortage, this is due to drought and limited water reserves. Namibia’s water resources include ephemeral surface water, groundwater, unconventional water sources and perennial surface water are located at the borders of the country; hence all four of these rivers (Okavango, Kunene, Zambezi-Kwando/Linyati /Chobe and Orange-Senqu) form part of shared watercourses with other riparian states. Water demand has increased faster than the growth in population in many places. Water demand for economic activities and urban consumption is estimated to increase from 416.1 million cubic meters per year in 2015 to about 572.5 in 2025 while rural domestic use is estimated to increase from 10.6 million cubic meters per year in 2015 to 10.9 in 2025. Agriculture (irrigation) is the largest consumer of water and it will remain the largest consumer up to year 2030. Water is a major production input and its availability and affordability is crucial for the transformation into an industrialized economy.

What will be the Benefits?
• Improved service delivery (because not only towns far from the rivers suffers water shortages, even those on the bank of the rivers)
• Competition will bring efficiency in water management
• Increased production in agriculture and manufacturing sectors
• Improved health condition of the communities
• Making Namibia green

What needs to be done to achieve this objective?
Build a desalination plant in the coastal areas of the country. This is the insurance for continuous and reliable water for major economic activities. This may in future turn coastal areas to produce agricultural products and help in food security.

Secure underground water in the central areas by tapping water from aquifer such as Tsumeb and Stamprient trans border aquifers, to be supplemented by boreholes inland. Installation of boreholes is critical as many boreholes were drilled but not installed. Integrated planning between Ministry of Lands and Resettlement and Ministry of Agriculture Water and Forestry is crucial.

Tapping of surface water in particular flood waters from flood prone areas during flood time.

Increase productivity in agriculture

Why productivity in agriculture is a game changer?
Agriculture sector remains an important sector given that more than 70% of the population depends on it for livelihood. The sector employs one third of the total workforce, although together with fishery sector contributes only about 6 percent to GDP. Despite the sector’s achievement, in 2016 a total of 595 839 people were estimated to be faced with food deficit while poverty was estimated at 18 percent of the population. Average wages in the agricultural sector is estimated at N$2114. To realize full potential of the agricultural sector, increase food security and wages, there is need to improve productivity. Furthermore, the government’s long term goal of food security and poverty reduction depends on the productivity of the agriculture sector. Productivity growth can have an enormous effect on real output, living standards, unemployment and income distribution. In 2015, Namibia imported about 76% of maize, 98% millet and 91% wheat. The current situation of import dependency is not sustainable as it poses a food security risk and trade imbalance thus local food production need to be emphasized.

What are the benefits?
• Increased production, food security and income for smallholder farmers.
• Creation of opportunities for value addition and development of agro business
• Narrowing the trade deficit of the Agricultural and agricultural related products
with the rest of the world.
• Improved nutritional status of the Namibia people.

What needs to be done to achieve this objective?
Government will intensify agricultural extension services to smallholder farmers and/or communal farmers by providing information on agricultural practices. This will include information on how communal farmers could organize themselves into cooperatives, access credit and acquire agricultural implements such as tractors.

Furthermore, government will intensify the mechanization of the agriculture production. Efforts will be intensified to expand the green scheme projects, acquiring land for redistribution and supporting small scale farmers with infrastructure and access to market for their products. This should be supplemented by improving access to better seeds by communal farmers.

Increase local demand of agricultural production through encouraging local procurement supports. Government Institution procuring produce in bulk should be encouraged to source their requirement locally these include prisons, army barracks, hospitals and schools including larger companies. In addition, the Government tender system specifications will be reviewed in order to favor local producers. Support to small farmers in terms of improving quality and maintaining standard should be enhanced.

Skills development (Technical/Vocational Skills)

Why skills development a game changer?
With 37 percent of the population being youth (16-35 age group), and an unemployment rate of 28 percent, Namibia has a large pool of the labour force to achieve the economic transformation agenda. The challenge is that the youth are unskilled. Vocational Education and Training (VET) is the catalyst in driving national development agendas especially in expanding the manufacturing and value addition. Skills constraints hamper the country’s capacity to plan, build, operate and maintain infrastructures. Technical skills can unlock the Namibia’s potential to become an industrialized nation through increased productivity and competiveness. Currently enrollment in TVET is half of the enrolment of the only three Namibian universities.

What are the benefits?
• Increased self-employment- thus reduction in unemployment rates
• Increased and improved Namibia goods and services
• Increased economic activities

What needs to be done to achieve this objective?
During NDP5, the focus will be on the transformation, upgrading and expansion of TVET institutions with an objective of creating a pool of competent and skilled workers. This will be achieved by expanding the existing training centers (VTCs, COSDECs and SOE providers) and creating new training centers in areas where there is none.

The transformation and expansion programme will include physical infrastructure, equipment and programmes (programme diversification). Greater emphasis will be placed on harmonizing TVET curricula, rebranding TVET, re-modeling of some VTCs into TVET colleges, re-introduction of pre-vocational subjects in schools, attracting qualified artisans into TVET and upskilling current trainers. It will also aims at rebranding of TVET, to increase its attractiveness and to promote activities that highlight TVET as an attractive career choice. The total number of trainees enrolled at both private and public TVET institutions will be doubled from the current enrollment of 25 137 trainees.

Local industry development through local procurement support

Why local procurement support is a game changer?
It is a well-established fact that Namibia produces what it does not consume, while most of the locally consumed goods ranging from high-tech manufactured products to basic commodities are imported. The Growth at Home Strategy acknowledges that the public procurement system and the private sector procurement practices can make an important contribution towards stimulating demand for local products. The mining sector which is one of the biggest sectors in the economy presents an opportunity for upstream linkages through locally supplied inputs.

Furthermore, the government procures a lot of food products to supply school hostels and feeding programmes, hospitals, military and police, food bank etc. This therefore presents a great market for local agriculture produce. Furthermore, by encouraging and/or requiring larger private companies and retailers to merchandise local products, in particular from SMEs, this will stimulate the development and competitiveness of local industries, thus encouraging more local manufacturing and processing.

What will be the Benefits?
• Stimulation of local industries development and competitiveness
• Market access for local produce
• Reduce dependence on imports
• Improved balance of payments

What needs to be done to achieve this objective?
NDP5 will focus on strengthening and fast tracking the implementation of some of the various measures that are identified in the Growth at Home Strategy. Thus, an enabling environment will be created by enforcing the public procurement bill and full implementation of the retail charter through creating space in the local retails for local produce. In addition, the Government tender system specifications will be reviewed in order to favor local producers. Moreover, enabling infrastructure to ensure local products comply with retailer standards will be set up, while efforts will be doubled to establish Namibia’s coding system which is a requirement for most retailers.

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