Given its small domestic market but favourable location and a superb transport and communications base, Namibia is a leading advocate of regional economic integration.
The Namibian economy has a modern market sector, which produces most of the country's wealth, and a traditional subsistence sector. Although the majority of the population engages in subsistence agriculture and herding, Namibia has more than 200,000 skilled workers, as well as a small, well-trained professional and managerial class.
The country's sophisticated formal economy is based on capital-intensive industry and farming. However, Namibia's economy is heavily dependent on the earnings generated from primary commodity exports in a few vital sectors, including minerals (especially diamonds), livestock, and fish. Furthermore, the Namibian economy remains integrated with the economy of South Africa, as the bulk of Namibia's imports originate there.
Namibia has well-developed and efficient infrastructures to supply its citizens and investors with electricity and water, as well as most other commodities of a develop world. A total of 126 bulk national schemes supply water for domestic, stock watering, mining, irrigation and industrial purposes.
Namibian Transport Services include:
- Roads: Namibia has a well established network of over 40 000 km of road, of which almost 6000 km is paved. The well established and maintained infrastructure of roads link Namibia with Angola, Zambia, Zimbabwe, Botswana and South Africa. The Trans Caprivi and Trans Kalahari highways provide an effective, fast and comfortable road link between the port of Walvis Bay and the neighbouring SADC countries.
- World class Ports and harbours: Namibia has two state –owned harbours; Walvis Bay and Luderitz. Walvis Bay is the only deep sea harbour and offers a safe, economical and well established option for import and export to the SADC region from Europe and elsewhere in the world.
- Airports company, airports and airstrips: The Namibia Airports Company (NAC) is a State Owned Enterprise that provides, facilitates, owns and manages eight airports, each with it’s own control tower, on a highly professional and commercial basis; Hosea Kutako International Airport handles well over 520 000 passengers annually while Eros Airport located in Windhoek is the busiest airport in terms of aircraft movement. The other NAC airports include Walvis Bay, Luderitz, Keetmanshoop, Ondangwa, Rundu and Katima Mulilo. The Walvis Bay airport handles daily connections to Johannesburg, Cape Town and Windhoek. Together with Air Namibia, foreign airlines like South African Airways, British Airways/Comair and LTU offers, among other, direct international flights to Frankfurt, London with regional flights to Luanda (Angola), Maun (Botswana), Victoria Falls (Zimbabwe), Cape Town and Johannesburg. Domestic flights to local destinations such as Swakopmund, Walvis Bay, s also possible while local air charters offer several other possibilities.
- Established Railways: The Namibian railways network is managed by TransNamib Holdings. This established network covers more than 2000 km of railway lines which covers almost all of Namibia starting from the South African border in the south via Keetmanshoop with branch lines crossing the rest of the country.
- Walvis Bay Corridor (WBC): The WBC is a public and private partnership and initiative to create a system of transport routes which links Walvis Bay to Botswana, South Africa, Mozambique, The routes also allows access to other southern and central African countries such as Zimbabwe, Zambia and southern DRC. The idea is to facilitate, create and promote a leading and efficient trade route for southern Africa.
Economy – overview
Since gaining independence in 1990, the Namibian economy has experienced a positive growth of an average of almost 4% a year with significant improvements in living standards and a definite decline in poverty. Comparing with the rest of Sub-Sahara Africa, Namibia is indeed a special case and stand out far above the rest.
The Namibian economy itself is heavily dependent on its mining sector, more specifically the extraction and processing of minerals for export. Mining accounts for 8% of GDP, but provides more than 50% of foreign exchange earnings. Rich alluvial diamond deposits make Namibia a primary source for gem-quality diamonds. Namibia is the fourth-largest exporter of nonfuel minerals in Africa, the world's fifth-largest producer of uranium, and the producer of large quantities of lead, zinc, tin, silver, and tungsten. The mining sector employs about 3% of the population while about half of the population depends on subsistence agriculture for its livelihood.
Unfortunately the performance and growth of the agricultural sector has been poor since independence. Increased fish production on the long coastline spurred a recent growth but the lack of adequate international marketing and distribution agreements remain a need.
Lately the economy has diversified with a focus on different exports and services as the international markets for those commodities increased.
The Namibian economy is closely linked to South Africa with the Namibian dollar pegged one-to-one to the South African Rand. Namibia draws 40% of its budget revenues from the Southern African Customs Union (SACU). Increased payments from SACU put Namibia's budget into surplus in 2007 for the first time since independence, but SACU's receipts delined in 2009 due to the global economic crisis.
Namibia enjoys several advantages in the international arena. It has a good location, great climate and a positive relationship with its neighbours. The low level of public debt can be admired even by developed countries. With the paradigm of apartheid being something of the past, the country can look forward to a bright future.
Mining in Namibia
In Namibia, minerals and rights thereto belong to the State and not to the owner of the property.
Historically the mining sector has always been the main driver of the Namibian economy. More recently taxes and royalties from mining still account for 25% of its revenue. Rich alluvial diamond deposits make Namibia a primary source for gem-quality diamonds and the largest earner of foreign exchange to Namibia. Mining contributes significantly to Government Revenue with an estimate current budget contribution of N$ 184 million in diamond taxes and another N$462 million in other mining taxes; N$ 252 million in diamond royalties and another N$ 250 million in other mining royalties. Although Namibia is only a medium size producer, it has the highest average carat value output in the world.
In addition to the world class deposits of gem quality (land and marine) diamonds, Namibia is also the world's fifth-largest producer of uranium, and the producer of large quantities of lead, zinc, tin, silver, and tungsten. Namibia also has other base metals such as copper, cadmium, arsenic pyrites, gold, lithium minerals, dimension stones, and many semi-precious stones.
The Government has also created a modern and enabling legislative, fiscal and institutional environment in which exploration and mining companies can operate. It regulates the allocation of licenses for prospecting and mining activities, and has appropriate strategies in place to address the environmental implications of such operations. Fewer South African companies nowadays dominate the mining arena with international roll players now being from Australia, Canada, France, Israel, United Kingdom, Russia and China.
There is a need for foreign and local mining companies to also process minerals before exporting them to create jobs and also to enable the Government to raise more revenue through export tax. Namibia Custom Smelters for instance is regarded as manufacturing and not mining.
Recent Mining and investment news:
Toronto Canada, January 14, 2010 – Dundee Precious Metals Inc. (TSX: DPM; DPM.WT; DPM.WT.A) (“DPM” or “the Company”) is pleased to announce that it has agreed with Louis Dreyfus Commodities Metals Suisse SA (“LDC”), the smelter tolling agent, in principle, subject to contract and completion of DPM’s acquisition of the Tsumeb smelter and related assets (the “Transaction”), to settle approximately US$11.4 million of metals exposure and debt to LDC, estimated at US$17 million, through the payment of US$2 million in cash and US$9.4 million in common shares of DPM, based on a deemed price of Cdn.$3.50 per share. The smelter will then have approximately US$5.6 million in debt remaining to LDC. LDC will continue to have exclusive rights to source the balance of the concentrate for the Tsumeb smelter through to 2020, other than the Chelopech long term supply contract.
Dundee Precious Metals Inc. is a Canadian based, international mining company engaged in the acquisition, exploration, development and mining of precious metals. DPM owns the Chelopech Mine, a producing gold/copper mine, and the Krumovgrad Gold Project, a mining development project, both located in Bulgaria, as well as a 95% interest in the Kapan Mine in Armenia. In addition, it is engaged in mineral exploration activities in Serbia.
Russia, Namibia to launch joint development of uranium deposits - Russian Minister of Ecology and Natural Resources Yuri Trutnev announced recently that Russia and Namibia plan to sign an agreement on cooperation in the development of uranium deposits in Namibia.
Shortly after that Russian President Dmitry Medvedev and his Namibian counterpart, President Pohamba, signed a memorandum on cooperation in exploration and development of Namibian uranium deposits. The document lays out opportunities for joint ventures in exploration, development and processing of uranium ore, and uranium enrichment. The memorandum is effective for five years and may be automatically prolonged. Rosatom head Sergei Kiriyenko said Russia would invest some $1 billion in uranium deposits in Namibia.
Two chemical production plants for reagents for uranium mining industry planned in Namibia - The Gecko Group of Companies is planning the construction of two chemical plants north of Swakopmund for the production of chemical reagents required by the uranium mining industry in the Erongo region. According to a first feasibility study, the investment is estimated at approx. Euro 525 million
HOUSTON, USA (May 2010) – The Ministry of Mines and Energy awarded a group led by HRT Oil & Gas Exploracao e Producao de Petroleo Ltd., Rio de Janeiro, the 2813A, 2814B, and 2914A exploration licenses off Namibia. License interests are HRT 40% and operator, Universal Power Corp., Calgary, 40%, and Acarus Investments (Pty.) Ltd. 20%. The contiguous blocks total 3.78 million acres in the Orange basin west of the Kudu gas discovery. Universal holds 90% interest in blocks 2713A and 2713B to the north and Block 2815 to the east.
First phase of the new license lasts 4 years and calls for assembly, interpretation, and mapping of existing 2D and 3D seismic data followed by shooting new seismic. Other techniques may be employed that will add to detailed satellite oil slick detection, geotechnical, and geochemical field work that has already been done by or on behalf of Universal in the basin. Phases 2 and 3 are each renewable for a 2-year period and carry a commitment to drill one well during each phase.