In a shock move which is likely to worsen the central region’s water woes, government has opted to construction its own desalination plant using proceeds from the N$10 billion that it has requested from China.
The long-term move, which is unlikely to bring the much-needed relief to the existing water woes faced by the central region which has started using boreholes as supply dams run dry, is expected to drag further
the issue of securing consistent water supplies.
In an exclusive interview after Monday’s media briefing at State House, Finance Minister, Calle Schlettwein, said government will not be buying the Orano-owned desalination plant as earlier suggested and neither will it develop a desalination plant with eastern neighbour, Botswana, which has expressed interest in jointly developing a new plant with Namibia.
“The Botswana project is still in its infancy so we need to consider our own apart from the Botswana one, which will come later,” Schlettwein said.
He said construction of a desalination plant was identified as one of the bulk infrastructure projects that will be funded under the N$10 billion facility from China over five years.
“For bulk infrastructure we have prioritized water provision, desalination, and power generation out of alternatives - solar and wind. We have also prioritised land servicing, and there are some infrastructure projects in health and education,” Schlettwein said.
Contacted for comment, ORANO Namibia Managing Director, Hilifa Mbako, said the company had not been briefed about government’s decision to construct its own desalination plant and why that decision was taken.
“What is on the table right now is that the existing desalination plant will continue to supply much needed fresh water to the populations and industries for a long time,” Mbako said.
Government’s siding with the Chinese for the project, unseats the Germans, who were close to be being roped in to fund a feasibility study and later the construction of a desalination plant through their development bank, KWF.
Based on the plan to be funded through KWF, the project was expected to be complete by 2021 and would have included a solar power plant to aid in the pumping of the water.
Schlettwein added that feasibility studies for other projects that will be funded by the Chinese loan “are good as finalized”.
“We will go as quickly as we can and hopefully this year we will have everything done and dusted,” he said.
On lessons learned by Namibia from the N$14 billion Targeted Intervention Programme for Employment and Economic Growth (TIPEEG), whose economic returns have been very disappointing, Schlettwein said government was now in a better position to select productive projects.
“We have focused on the logistics hub, which is a labour-intensive activity, with all the services that are linked to logistics infrastructure,” he explained.
“We are concentrating on economic diversification and productive capacity improvement so that we also embrace artificial intelligence and robotics. We have to be aware that many repetitive or routine jobs will soon be done by computers since they do not go on strike and they are cheaper.”
Government has also shifted its focus to service industries such as logistics, financial and engineering services to address unemployment.
“That is where we believe the replacement will move into. Manufacturing is good, but it is an area that is most risk-prone for artificial intelligence and robotics,” the minister said.
Through TIPEEG, government had hoped to create 104, 000 jobs over a three-year period, but only 83,000 jobs were created, of which only 15 829 were permanent.
Schlettwein admitted that he would have loved to see the creation of more jobs.
“I wanted much better employment figures. We have not seen any significant impact on employment and I think we could have expected better returns. That was what we wanted, but we did not get it,” he said.
In 2011, Namibia issued its debut US$500 million 10-year Eurobond to fight unemployment through TIPEEG.
This was followed by a US$750 million Eurobond which raised concerns after the largest chunk of proceeds was allocated to boost foreign reserves.
At the time of the first Eurobond, Namibia’s debt stood at around 25 percent of GDP, but has since spiked to 43 percent and is expected to peak at 45 percent after the N$10 billion Chinese loan.
Economist Rowland Brown said then that, “We must exercise caution, and avoid falling into a debt trap by running up excessive debt to fund frivolous activities.
“It is possible that we have opened a Pandora's Box of credit.” – Additional reporting by Kaula Nhongo.