Speaking at the opening of a new abattoir in Outapi, the Minister of Agriculture, Water and Forestry, Alpheus !Naruseb, said this week that localisation would be a game-changer for Namibia and that it could bolster the economy.
He went on to say that the government was committed to creating a market for cattle from the northern communal areas, which was why the abattoir was upgraded and one at Eenhana will soon open.
Quite correctly, the minister is urging consumers, businesses and government agencies to buy products locally. We agree with this and wonder why at 28 years old as a country, this wasn’t a priority just after independence.
None of this information about the huge value of local products destined to be sold in local stores is new.
This country has missed the bus in prioritizing this as we happily import everything from everywhere else, providing jobs and expertise in production for foreign countries rather than our own. We moan over 40 percent youth unemployment and the decline in local industries and wonder what happened while we take only baby steps towards addressing the problem.
There is no doubt that buying local products and using local services stops economic leakage, encourages home production, increases skill levels, stimulates employment, and generates a warm sense of national pride and self-sufficiency. But we must ask: Did it take this economic recession to transform talk into action on this issue?
Right now, Namibia is a colony for South African retailers as their shops and stores dominate all malls and central business districts across the country and this reality will likely remain unchanged.
New mall spaces built anywhere in the country are merely different locations for South African retailers, who only grudgingly give limited competitive shelf space to Namibian products.
Due to this situation, Namibian purchasing power employs thousands of South Africans instead of our own people.
The minister’s plea to buy local, must get a viable, but aggressive plan, a steady budget, skilled staff to implement it, and regulations to operationalise existing retail laws.
Foreign retail outlets operating in Namibia must move faster to have a percentage of local products on their shelves and invest in training and support for local product providers to ease them into their massive systems controlled from Cape Town or Johannesburg. Their profit margins are high here, so this should not be a hardship.
This doesn’t mean these foreign retailers should buy Namibian butternut squash and walk away smiling in photo ops as if they have done something special to invest in this country.
It means that they must commit to support all vegetable producers with subsidized shipping rates, preferential shelving, and assistance in marketing by offering specials to the public, training in merchandizing to local product providers and staff to handle local producers’ queries.
This can be done gradually to be sure, but it must be done on an identifiable timeline with penalties imposed for infractions.
Decisions about what is marketed in Namibian stores are made in South Africa. These chain stores shamelessly have promotions boldly advertised here, but they only apply to those living in South Africa.
They put up banners announcing specials using South African scenes, languages, names, locations and even telephone contact numbers. They don’t even bother to produce Namibian ads and visuals for the market where they earn their profits.
Those in the Land of the Brave wishing to provide products for many of these stores must have their products approved following South African regulations - Namibian guidelines are meaningless.
Local clothing stores and product providers struggle for customers when they must sell their goods at prices competitive with South African chain stores that buy their products by the millions of each item for distribution across the SADC region, while they can only buy smaller amounts for a limited local clientele.
Local designers with shops and clothing outlets like My Republik are struggling. Woolworths bankrupted the Arandis textile factory by moving its business elsewhere, yet they make tens of millions in profits selling their products in Namibia.
Why isn’t every SOE and ministry already buying their goods and services from local farmers, service providers and companies first before filling their orders in other places?
Imagine if NWR could have a large portion of its food requirements for its lodges provided primarily by local farms nearer to their facilities? The logistics are not without challenges, but the longer term rewards can offset the higher wholesale prices that buying local can entail.
SOEs are precisely in existence to add value to the Namibian economy. That value may not be an annual dividend cheque, but it can be increased downstream employment, jobs skills training, and other peripheral benefits.
The defence ministry with its army bases, the education ministry with its school feeding programs and the ministry of health with its hospitals, should buy their vegetables and other products locally (when viable) and buy meat above the red line exclusively to re-cycle Namibian money here at home.
The abattoirs the minister is busy opening must be only the beginning of an aggressive action to release the massive meat product supply trapped above the red line and make it safely available to local consumers.
Cattle farmers operating above the redline cannot export to the lucrative foreign markets due to various restrictions, but they should be allowed to provide for local demand, even if that means government setting up independent meat stores to buy from those abattoirs where hygienic local meat products can be sold in Namibia’s larger cities.
We all know about the Agro-Marketing and Trade Agency (AMTA). This agency was established under the Ministry of Agriculture, Water and Forestry, to coordinate and manage the marketing and trading of agricultural produce in Namibia.
Their mandate is to manage the fresh produce business hubs and help the country build food security. Government should build on this existing infrastructure, regulations and capacity and aggressively implement (as a matter of urgency), requirements that a percentage of Namibian agricultural products be sold to and/or utilized by all business entities making profits in this country.
Local Namibian producers have a problem providing the amount of products needed to adequately supply various businesses. But, what comes first, the chicken or the egg?
Local providers do not have the orders needed to get the financing to front the initial product costs in order to provide enough products at the demanded quality standard. In turn, the orders aren’t made by the buyers because there is insufficient local capacity to fill them completely and at the required standard.
Namibia must look at innovative models where initially small amounts of local products can be provided on large orders, with this level growing as capacity and skills transfer improve as orders are filled and cash flow grows for local companies.
This will attract higher costs, but as unemployment bites and recession devours the profitable peace that exists in this country, what cost is higher, social calamity and rising crime or more transaction costs by splitting the orders between product providers?
We have to start somewhere, even though we are 28 years past the point where this issue could have been tackled and solved. Bravo Minister !Naruseb.