08 - 09

Nov. 2016

Safari Conference Centre
Windhoek, Namibia

"Promoting Investment for Inclusive Growth and Industrialisation"

"Promoting Investment for Inclusive Growth and Industrialisation"

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Ministry of Industrialization Trade and SME Development

 

 

Low Cost Housing

The housing sector is critical and ranks highly on the government’s development agenda at the moment. It has been one of the main objectives of the National Development Plans and has been reaffirmed in the Harambee Prosperity Plan (HPP). The HPP is rested upon four pillars which include a pillar on social progression. As a sub-pillar, government plans to fast-track the delivery of urban land servicing and housing. This stance is informed by the following background:

There exists a massive deficit in the market, estimated to be at about 300 000 houses and requiring around N$35 billion to address. This presents the country with a big challenge both logistically and financially. Moreover, the shortage has led to an upward trend in the cost of housing, particularly in the economically vibrant towns such as Windhoek and the coastal areas.

Low Cost Housing

According to statistics the median price of a house in Windhoek trends above the national median price. The rise in the cost of housing in Namibia median price almost doubled between 2009 and 2014. By the end of last year, 2015, the median price of a house in Namibia was around N$700 000 (December 2015 Housing Index by FNB). At this level, houses are way out of reach for the vast majorities, particularly those who fall within the middle, low and ultra-low income segments of the market. The latest Household Income and Expenditure Survey (2009/2010) reports the average annual income of a household in Namibia to be at a mere N$ 68 878. To be able to service the mortgage on a median priced house, monthly repayments will be far above the average household’s total monthly income thereby making it impossible for them to qualify for financing through the traditional banking channels. This is especially true for first-time buyers.

Rental figures follow the same pattern as more people are renting because they cannot afford to purchase houses. This situation points to a lucrative market for those in the properties business, especially properties that are located in major towns where the demand for housing is much stronger.

The shortfall fundamentally results from many years of undersupply coupled with unyielding demand levels. Between 1993 and 2010 (17 years), the National Housing Enterprise (NHE) delivered about 8000 houses, thereby averaging at about 470 houses per year. This is far below the annual target of 1200 houses required to clear the backlog in the country.

Among other factors, demand is driven by the country’s increasing population and the steady economic growth recorded over the years. With economic growth, income levels have also risen in relative terms thereby making it possible for many people to be willing and able to buy houses.

The table below shows Namibia’s population dynamics between 1991 and 2011.

Census Year Total Population (Millions) % of Population residing in Urban % of Population residing in Rural GDP per Capital (USD)
1991 1.4 28 72 2,054.85
2001 1.8 33 67 1,836.76
2011 2.1 43 57 5,540.33
2021* 2.5* 52* 48* n/a
Source: Housing and Population Census Reports by NSA and World Bank Reports. *Estimate

A year after independence in 1990, the country’s population stood at a mere 1.4 million. Only 28% of the country’s population at the time resided in urban areas as compared to 72% who lived in rural areas. Fast forward ten years and in 2001, the population was recorded to have increased by about 29% to reach 1.8 million. Moreover, 33% of the country’s population resided in urban areas that year, thereby shrinking the population of rural dwellers to 67%. Another ten years later, the population surpassed the 2 million mark. Strikingly, however, nearly half of the country’s population lived in urban areas at the time of the last Census, in 2011. Urbanization implies that towns in Namibia are increasingly finding it difficult to meet the demand for decent housing by their inhabitants. This explains the mushrooming of informal settlements that are to be found at the periphery of every town in the country at the moment.

The challenges include limited government funding which makes it difficult for local authorities to deliver serviced land, high land-servicing costs as well as the high cost of building material.

Private sector intervention is required to fast-track the supply of affordable housing in Namibia.

Investment Opportunities

  • Construction of affordable housing for the middle, low and ultra-low income segments of the market.
  • Affordable ways of servicing urban land

Ministry of Urban and Rural Development

Ministry of Land Reform

National Housing Enterprise

 

 


The agricultural sector contributes 4.5% to GDP, while about 40% of the Namibian population depends on agriculture largely subsistence agriculture and herding. Primary products include livestock and meat products, crop farming and forestry.

Animal products, live animals and crop exports constituted 10.7% of total Namibian exports. The commercial sector consists primarily of livestock farming, corn, grapes, dates and maize production.

Cattle raising is predominantly in the central and northern regions, while karakul, sheep and goat farming are concentrated in the more arid southern regions.

The agricultural sector presents investment opportunities in different subsectors such as; agri-business, agro-inputs, agro-finance and agro-logistics and supply.


Ministry of Agriculture, Water and Forestry

Agribank

 

 


One of the most important inputs for economic growth is an abundance of reliable and affordable energy. Namibia is increasingly coming under pressure to deliver a power supply that matches her ambitions. Presently 61% of Namibia’s energy is imported due to local generation producing only 39% of electricity of total demand. Namibia’s total electricity demand is currently estimated at 600 MW per annum. This demand is expected to grow at about 5% per annum. The country’s generation capacity currently stands at approximately 486.5 MW. Total generation capacity delivers approximately 400MW, thereby rendering a deficit of about 200MW.

The Namibian market currently operates on a Single Buyer Model whereby NamPower is the generator, as well as, the single buyer of electricity. The power utility Nampower is seeking alternative power generation sources. Nampower has therefore embarked upon various projects aimed at ensuring that the country has a reliable supply of electricity.

Current generation facilities and their generation capacity;

  • Ruacana Hydropower Station - 332 MW;
  • Van Eck Coal Power Station – 108 MW;
  • Paratus Diesel Power Station – 24 MW; and
  • Anixas Power Station – 22.5 MW

The Namibian Government, remains committed towards providing electricity to all educational and health facilities, and to all household, especially rural households. Thus, the Harambee Prosperity Plan Goal desires outcome/s with regard to electricity supply during the Harambee period is anticipated as follow:

  • Increase in local electricity generating capacity from 400 MW to 600 MW;
  • Provision of electricity to all schools and health facilities by 2020; and
  • Increase in the rural electrification rate from 34% in 2015 to 50% by 2020.

Factors such as the rise in domestic consumptions, the dependency on electricity imports, the peak power challenges, the transmission congestion on the import, the decline in the surplus generation capacity in SADC and lastly securing the projected power supply demand by Namibia has led to the identification of gas as a power source.


 

Oil and Gas

The oil and gas industry is still at a very early stage of development, with the discovery of non-commercial volumes of oil in 2013. Geological data further suggests that there are considerable reserves in the offshore basins of Walvis Bay, Luderitz and the Orange River as well as the onshore basins of Namib in northern Namibia.

 

Renewable Energy

Renewable energies, especially wind energy along the southern coast, have great potential in Namibia while solar radiation maps indicate that the country has proven solar resources and are particularly suited for solar energy projects such as concentrated solar power (CSP). There are also opportunities for passive solar water desalination plants for the mining and agriculture sectors. With Namibia currently importing 61% of its energy from its neighbours which is then distributed through a central national grid, the use of solar energy offers investors an opportunity to decentralize the electricity distribution network.

Options of renewable energy procurement

  • Renewable Feed-in Tariff (REFIT) scheme: The REFIT scheme is formulated to permit private investors (IPPs) and it covers renewable energy based projects with capacities between 500 kW and 5 MW. The REFIT is targeted on investors in the business of electricity generation who want to procure, own and operate medium-scale electricity generation facilities. An interim 70 MW REFIT programme is running whereby Twenty-seven participants are pursuing fourteen 14 IPPs (solar PV, wind, and biomass) 5 MW generation licenses under the current program.
  • Net metering: The net metering programme is designed on a private ownership model through which small-scale renewable projects can feed excess generated energy into the national grid. The programme is limited to residential and commercial users with renewable energy technologies (solar, wind, water, geothermal, biomass, biogas, biofuel, or fuel cell) systems of equal or less than 500kVA installed capacity. The Net Metering Rules will be gazetted soon.
  • Competitive bidding system: The system is based on national energy projects determined by the government’s long term renewable targets. Projects that fall under this scheme are more than 5 MW and are procured through a fair and free competitive bidding system initiated by an invite to IPPs to submit bids for a renewable energy project with a pre-determine capacity. The least cost bidder that also fulfils the technical requirements is awarded and signs a PPA and TCA with the national utility‒NamPower. The PPA guarantees a fix price over a certain period of time to be indexed and revised annually.

Namibia has the best resource and is the best locations to invest in renewable energy both for domestic and regional markets as its connectivity to neighbouring countries in terms of infrastructure would enable it to become a net exporter of electricity. There is a large regional energy market with the whole SADC region suffering from electricity shortages and Namibia is ideally placed to supply the neighbouring countries with electricity.

 

Investment Opportunities

  • Debt financing and equity participation in upstream and downstream operations;
  • Power generation as Independent Power Producers (IPP’s);
  • Financing of transmission lines;
  • Engineering, procurement and construction as well as drilling and production; and
  • Renewable energy such as wind, solar energy

Ministry of Mines and Energy

Namibia Power Corporation Limited (Nampower)

 

 


The Namibian Government has identified scaling-up investment in infrastructure as one of the key enablers to achieve its development objectives as outlined in the fourth National Development Plan (NDP4), Vision 2030 and the Harambee Prosperity Plan. An effective transport infrastructure is the backbone of a vibrant economy and Namibia’s favourable geographical position on the south western coast of the African continent bordering with Angola, Botswana, South Africa, Zambia and Zimbabwe, puts it in good stead to be the transport and logistics hub in southern Africa. The country has vast open space, with a total surface area of 824 269km² and is Africa’s most sparsely populated country. Due to its leading advocate of regional economic integration, its membership to SACU and SADC ensures access to a market of over 55 million and 300 million people, respectively; with a combined GDP in excess of US$ 200 billion and US$ 662.7 billion, respectively. The port of Walvis Bay is ideally located for shipments to and from Europe and the Americas.

SADC region currently relies heavily on South African ports or underdeveloped and congested ports in other countries in the region. Namibia with its well-developed ports, well maintained road infrastructure and other favourable conditions stands to benefit from the continued growth and prosperity of Africa in general.


 

Port

Despite being smaller than regional ports, the harbour benefits from higher efficiency, shorter waiting times and additional facilities such as a dry dock for oil and gas rig repairs. The Port of Walvis Bay has become the preferred African West coast port and logistics corridor for southern and central African logistics operations. The Walvis Bay Port is being expanded (from 350,000 TEUs to 750,000 TEUs per year) and expectations about this are quite high among major shipping lines.

Plans are also underway to expand the Lüderitz Port and strengthen its connectivity with the Northern Cape Province of South Africa in terms of economic activity. Potential transport cargos for Lüderitz are manganese ore, zinc products (zinc ore and ingot of zinc) and fruit (table grapes and dates). The cargo handling volume at Lüderitz Port could currently be exceeding 500,000 tons.

In order to transform Namibia into an international logistics hub for the SADC region, all elements related to transport and logistics (road, railway, maritime & port and aviation), should be aimed to be up to “international standard”. Therefore, the plans of developing a Master Plan for the International Logistics Hub for SADC Countries in Namibia is underway and is expected to be completed by 2025.

 

Road

Namibia has a well-established road infrastructure, regarded as one of the best on the continent. The majority of towns and communities can be reached via a road network comprising of more than 44,500 km. The country is linked by road to Angola, Zambia, Zimbabwe, Botswana, South Africa and Democratic Republic of Congo. Namibia has 4 corridors Trans-Kalahari via Bostwana, Trans-Caprivi, Trans-Cunene via Angola to DRC and Trans-Oranje via South Africa that links to SADC countries. The Trans-Kalahari and the Trans-Caprivi highways provide a fast and comfortable road link between the Namibian port of Walvis Bay on the Atlantic coast and her landlocked neighbouring countries. The highways provide a regional transport corridor intended to reduce shipping times for imports and exports from the neighbouring countries to the markets of Western Europe and the Americas by at least five days compared to traditional routes in southern Africa.

Namibia has also committed to upgrading 1,480km of roads over the next five years which will improve accessibility across the country. Despite such extensive road network, most of the country’s road infrastructure has been in existence prior to independence and are in urgent need of rehabilitation and maintenance

 

Rail

The Trans-Kalahari Corridor comprises a tarred road linking the Port of Walvis Bay with Botswana and the industrial powerhouse of South Africa, Gauteng. The Corridor stretches over 1,900 km along Walvis Bay – Windhoek – Gaborone -Johannesburg/Pretoria. It is supported by a railway line from the Port of Walvis Bay to Gobabis (via Windhoek), where transhipment facilities are available, and continues from Lobatse in Botswana. The Corridor is complemented by the Maputo (Mozambique) Corridor on the east coast of Africa, thus forming a transport corridor over the entire breadth of southern Africa. The corridor aims to simplify cross-border transactions and customs operations along the Corridor.

Government is therefore upgrading of railway network to double the volume of cargo transported between Walvis Bay and Kranzberg, Kranzberg and Oshikango, and Kranzberg and Windhoek. At present, government is rehabilitating the track between Kranzberg and Tsumeb.

 

Aviation

Namibia is also strategically placed to take advantage of the air transport industry. Plans are underway to expand its international airport at Windhoek while the Walvis Bay airport has recently been extended to allow larger planes to land there.

It is projected that bilateral liberalization between the 12 countries (Algeria, Egypt, Tunisia, Ethiopia, Kenya, Uganda, Angola, Namibia, South Africa, Ghana, Nigeria, and Senegal) would increase traffic flows between these countries by 81%, from 6.1 million passenger movements currently (in 2013) to 11.0 million (an increase of 4.9 million passenger movements). Of this, it is estimated that Namibia will have an increase of 0.5 million passengers (92%). The passenger fares from 12 countries will reduce by 25 – 35%. The passenger fare from Namibia will reduce by 25%. Table 1 below shows the present Air Namibia routes.

Table 1. Air Namibia’s present routes

Categories Airport Present operating Routes
International HKIA Frankurt
Regional HKIA Johannesburg, Cape Town, Luanda, Harare, Lusaka, Victoria Fall (via Maun - Botswana)
  Eros No international flight
Domestic HKIA Walvis Bay, Luderitz (via Oranjemund)
  Eros Ondangwa, Rundu (via Katima Mulilo)
Source: Air Namibia

The Liberalization of air services (open skies) is an international policy concept that calls for the liberalization of the rules and regulations of the international aviation industry, especially commercial aviation in order to create a free market environment for the airline industry. For open skies to become effective, a bilateral or multilateral Air Transport Agreement has to be concluded between two or more nations. This is expected to be addressed in the anticipated Logistic Master Plan. Liberalization generally fosters greater competition among airlines, resulting in lower fares for travellers, greater numbers of people travelling, more choices of airlines and routes, and improvement of service levels. Liberalization of air services has the potential to make huge impacts on the aviation sector, tourism sector, trade, investment and productivity.

 

Namibia has invested in the modernisation and expansion of telecommunications. International satellite services link Namibia to telecommunication services worldwide. Telecom Namibia Ltd is Namibia’s national communications operator. Namibia boasts a 98% digital telecommunications infrastructure, which provides direct dialling to most places in the world.

Namibia has cellular coverage in most towns, and road coverage along virtually all the major routes in the country. Namibia’s cellular network service providers are MTC, operational since 1995, and TN Mobile, previously known as Leo and Cell One, which was re-launched in October 2009.Telecommunications operators have installed a fibre optic cable technology across the country.

The newly established Communication Regulatory Authority (CRAN) regulates the Namibian communications, broadcasting and postal services.

 

Water

Namibia is an arid country that is regularly afflicted by droughts. Expansion of industrial and agricultural activities coupled with population growth in the urban areas continues to put pressure on water resources and the situation is estimated to remain critical for the next coming years.

The bulk of water supply in Namibia is sourced from the Hardap, Von Bach, Swakop, Goreangab and Naute dams. Other small dams are the Omatako, Friedenau, Otjivero and Oanob dam. These are supplemented by perennial rivers on the borderlands of Namibia's far north and south. However, these rivers are far away from the population centers, hence water supply is critical in most parts of the country especially the central part which includes Windhoek. NamWater, the only bulk water supplier in Namibia.

Despite the good infrastructure, massive investment opportunities still exist in this sector.

 

Investment Opportunities

  • Port related services
  • Railway development & linkage
  • Cargo handling facility
  • Warehousing & Distributing
  • Corridor projects
  • Truck Stops Facilities
  • Value addition projects
  • Flood and rainwater harvesting
  • Seawater desalination plants
  • Groundwater (Borehole Drilling)
  • Constructed pipelines to transport water over large distances

As in any other developing country, infrastructure in Namibia plays a pivotal role in the development of the economy. The country has one of the best road networks in the region with 6000 km tarred road, 25000km of gravel road and 9000km of earth-graded road making it possible to travel by road to Angola, Botswana, Zambia and South Africa.

The major routes are the Trans-Kalahari and Trans-Caprivi highways that link the port of Walvis Bay to neighbouring land locked countries. The roads are supported by air, rail and sea transport and well-developed telecommunication infrastructure.

Despite the good infrastructure, massive investment opportunities still exist in this sector as indicated by the number of projects requiring joint ventures/partnerships.


Ministry of Works and Transport

 

 

Manufacturing

Manufacturing is one of the priority sectors of the Namibian economy. It contributes about 12.5% to GDP. There is potential for investment in the manufacturing sector because of the current small manufacturing base. In most cases, Namibian exports consist of primary products while bulks of imports are consumables.

It is in this context that the government deliberately introduced manufacturing incentives and other support services to diversify the economy.

Manufacturing opportunities are available in all sectors such as mining, agribusiness and fishing as well as those listed in the projects below.


Ministry of Industrialization Trade and SME Development

 

 

Tourism

Tourism is a rapidly growing sector of the Namibian economy and a significant generator of employment. It is the third-largest source of foreign exchange after mining and fisheries. Although the majority of Namibia's international visitors originate in the region, other international travellers are increasingly attracted by the country's unique mix of political stability, cultural diversity, and geographic beauty.

Tourism in Namibia has had a positive impact on resource conservation and rural development. Some 29 communal conservancies have been established across the country, resulting in enhanced land management while providing tens of thousands of rural Namibians with much needed income.


Ministry of Environment and Tourism

Air Namibia

Namibia Airports Company (NAC)

Namibia Tourism Board (NTB)

Namibia Wildlife Resorts (NWR)