Namibia Eyes Economic Growth Through Mineral Value Addition, UN Report Reveals
In a bid to unlock new economic potential, the United Nations Conference on Trade and Development (UNCTAD) released a comprehensive report on Wednesday detailing how Namibia can enhance its economy by tapping into its rich mineral resources. The document underscores a strategic shift towards value addition and diversification, aiming to move beyond merely exporting raw materials.
Titled “Rapid Assessment of the Value Addition and Diversification Within and Beyond the Critical Energy Transition Minerals Value Chain: Namibia,” the report showcases 353 products across 23 sectors that Namibia could potentially manufacture, leveraging its existing industrial capabilities. Notably, 200 of these products exhibit significant potential for diversifying the economy, with the related global market growing by an impressive average of $811 million annually since 2018.
According to the findings, collaboration with the private sector has validated 165 of these products, which could lead to the creation of over 26,400 jobs—approximately 3% of Namibia’s labor force in 2023. A majority of these new positions are projected to emerge from the iron and steel sector, potentially generating more than 15,000 jobs, while machinery, copper products, and electrical equipment sectors could add thousands more.
The report highlights promising areas such as food processing, chemicals, and pharmaceuticals, which collectively could create over 5,000 new jobs, providing valuable opportunities for youth and semi-skilled workers in Namibia.
At the report’s launch in Windhoek, Selma Ashipala-Musavyi, Namibia’s Minister of International Relations and Trade, emphasized the importance of moving beyond the country’s historical reliance on raw material exports. “The evidence in this report shows that there are practical and achievable pathways for our country to transition from being mere exporters of raw materials,” she stated.
Despite its contribution to the gross domestic product and export earnings, much of Namibia’s mineral output is still exported in raw or semi-processed forms. This limits local job creation and impedes technology advancements and industrial growth.
Minister Ashipala-Musavyi remarked that the global transition toward clean energy presents a strategic opportunity for Namibia. “By emphasizing beneficiation and strengthening local linkages, we can stimulate industrial development, create jobs, build specialized skills, and secure greater market access for Namibian products and services,” she noted.
She also highlighted that true success should extend beyond export volumes to include the extent of domestic involvement across various value chains, stressing the need for small and medium enterprises to benefit from these diversification efforts.
UNCTAD Secretary-General Rebeca Grynspan conveyed the critical importance of “structural transformation,” which involves changing a country’s production processes to alter its developmental trajectory. “What differentiates a wealthy economy from a poor one is not the money flowing through it but what that economy manufactures,” she asserted. For instance, she illustrated that exporting copper as concentrate results in lower earnings compared to selling it as finished products like wiring or cables.
Grynspan emphasized that transforming Namibia’s mining sector into a value-added powerhouse requires investment and a skilled workforce. She explained that the same mineral, when processed, generates jobs for engineers, technicians, and small vendors. Furthermore, she noted the heightened demand for critical minerals in the global market, driven by trends in electric vehicles, wind turbines, and solar panels.
In 2023, Namibia took proactive steps by banning the export of unprocessed lithium and other vital minerals, signaling its commitment to enhance local processing capabilities. The report identifies 60 products linked directly to energy transition mineral value chains and suggests that an investment of about $2.1 billion could unlock these opportunities within a three-year timeframe.
Namibia is already producing copper cathodes, and further processing could significantly enhance the value of these products. The report also mentions that the production of pharmaceuticals, including sterile injectables and vitamins, is both commercially viable and socially beneficial.
However, Grynspan warned about the challenges facing diversification, particularly the high cost of finance and market access. “Africa faces interest rates that are four to eight times higher than those in developed nations, which severely limits capital accessibility,” she explained. Additionally, she pointed out tariff escalations that impose higher tariffs on processed goods compared to raw materials, hindering the progress of developing nations up the value chain.
This strategic framework aligns with Namibia’s national development goals, its beneficiation strategy, and special economic zones. Grynspan concluded, “The ambition is evident. Now, we need to turn these plans into factories, jobs, and exports.”
— Reported by Nexio News
