EPZ injects N$1,6bn in domestic economy

June 29, 2015, 8:35am

EPZ injects N$1,6bn in domestic economy

The domestic economy has made N$ 1,61 billion from the procurement of services and goods from Export Processing Zone (EPZ) operations during the 2012/2013 financial year, the Offshore Development Company (ODC)’s annual report has revealed.
According to the report that financial year tabled by Minister of Trade and Industry Immanuel Ngatjizeko in parliament last week, the ODC generated a 22,9% increase in revenue from N$1,24 billion in 2013 to N$1,61 billion in 2013 in the form of the local procurement of goods and services by EPZ enterprises such as transport and logistics, utilities, IT, auditing, cleaning as well as security and insurance.
The report also states that during the year under review, the total accumulative investment level in the EPZ more than doubled from N$5.0 billion to N$12,7 billion mainly due to the realisation of an investment by Areva processing, and reinvestments by Namzinc and Dundee Precious Metals Tsumeb (previously Namibia Customs Smelters), whilst total direct employment decreased slightly from 2591 workers to 2532 employees during the same periods.
Exports from the EPZ were recorded at N$8,5 billion, compared to N$7,5 billion in 2011, which was an increase of 7,9%.
Total imports increased from N$5,6 billion in 2011 to N$5,9 billion in 2012.
The report further states that the EPZ attracted investments in diverse economic activities such as the manufacturing of automobile parts, household plastic wares, abrasive products, the assembling of motor-vehicle parts, mineral processing of zinc and copper refinery, as well as the cutting and polishing of diamonds and granite.
The EPZ regime, which is focused on export- oriented manufacturing and operational companies, has highlighted the general lack of skilled labour in various sectors, insufficient rough diamond supply for cutting and polishing factories and the rising costs of doing business particularly due to high energy, transport and utility expenses in the country as challenges to the industry.
The lack of affordable business and industrial premises has been identified as one of the main constraints to the successful development and growth of the private sector in Namibia.
The ODC has been established in terms of Article 26 of the Export Processing Zone (EPZ) Act with the mandate of promoting and marketing investment opportunities under Namibia’s EPZ, as well as to monitor and coordinate all EPZ-related activities and provide an umbrella facilitative service to approved investors in the country.
The company also develops and leases serviced industrial and business sites and factory shells to entrepreneurs.
The Offshore Development Company (ODC)’s total company assets have decreased from N$168 million to N$167 million, despite group total assets recording a N$28 million increase during the 2012/2013 financial year, the company’s annual report has revealed.
In his statement, ODC Board chairman Gerdus Burmeister said there is huge potential for value- addition in the country, especially for mineral beneficiation and agricultural produce.
“Agro-processing is one of the priority areas in the industrial policy, and it would be worthwhile to explore the viability of importing agricultural products from neighbouring countries with more fertile soils for further processing in Namibia because of the country’s reliable infrastructure.
More than 50% of the enterprises under the EPZ are mineral processing, mainly diamond-cutting and polishing. The other EPZ enterprises provide inputs such as specialised car components for the European automomobiles’ industry, plastic products and marble and granite”, Burmeister stated.
He said there is still significant room for expansion in the manufacturing sector, which will enable Namibia to integrate into several Global Value Chains (GVCs), including upstream mining products (input for mining), mineral beneficiation and Agro- and fish processing.
“At Southern African Customs Union (SACU) level, common industrial policy research is underway to determine whether the manufacturing of automobile parts across the region would be a viable cross-border value-chain industry”, Burmeister noted.
The company continues to implement some key aspects of the MTIs mandate, which includes the identification and development of business premises and the implantation of special projects in identified strategic regions and towns. The programmes address the shortages of business premises, which would enable the operator to take advantage of local and export markets.
The ODC is also implementing special projects such as gemstone-cutting and polishing and jewellery- manufacturing at Keetmanshoop in partnership with the Polytechnic of Namibia, the Finnish Municipality of Laampara and the Swedish Kristallen Company.
The ODC created more than 4000 direct job opportunities through its programmes and interventions, which include the construction of the Namibia Trade Hub facility in Windhoek, Inland Container Terminal/Dry Dock at Oshikango and the Omahenene Business Park, respectively.

by Hileni Heita