Walvis to become SADC gateway
The Walvis Bay Corridor Group says plans to develop the new SADC Gateway Port, situated 5km north of Walvis Bay, are at an advanced stage.
This is according to the corridor group’s Clive Smith, who was speaking at a breakfast panel discussion last week in the seaside town.
The planned port, consisting of a 10km berthing dock, bulk handling facilities, ship repair facilities and a fuel jetty, will cater for a significant increase in import and export volumes and commodities to and from landlocked SADC countries.
Various experts presented their opinions and discussed the economic opportunities and potential challenges associated with the gateway project. The business breakfast was organised and hosted by the Hans Seidel Stiftung.
The Namibia Ports Authority recently announced that the first phase of the gateway project is expected to commence next year - a year ahead of schedule.
Matthew Mirecki from the Economic Association of Namibia said the SADC Gateway Port presents significant economic opportunities for Namibia and this should be carefully balanced against challenges, such as competition from Angola and South Africa.
Given the complex nature of some of the issues, solutions must be sought sooner rather than later if the potential benefits of the gateway are to be realised, he cautioned.
“The construction of the SADC Gateway Port will also have to be accompanied by complementary infrastructure development in terms of rail and roads. Unless this is done it will be a costly exercise to utilise the SADC Gateway Port and this could limit the economic impact,” Mirecki added.
In addition to this, significant efforts need to be made to improve the country’s business environment.
The SADC Gateway Port will improve the appeal of Namibia to investors looking to establish a base in Southern Africa, but the potential economic benefits offered by the new port could be severely undermined if efforts are not made to make the existing business environment more attractive.
In particular, improvements must be made in respect of cross-border trading.
Land and house prices
Mirecki said the SADC Gateway Port would also impact on land and house prices.
House prices have risen by 16% in the first six months of 2014.
This has placed Namibia second in the world in terms of house price increases behind Dubai.
It is estimated that the population of Walvis Bay is projected to double over the next 16 years from around 80 000 to 170 000, thus creating more demand for land and houses.
A recently study suggests that an additional 2 390 hectares is needed to satisfy residential demand, which implies the need for significant planning and fairly immediate action.
With an estimated investment of N$30 billion, the SADC Gateway Port is a massive construction project and will keep the country’s gross domestic product (GDP) buoyant.
It will also create a number of jobs in the construction sector, to replace those lost due to the completion of other major projects outside of Walvis Bay. The development of the SADC Gateway Port would offer significant growth and employment opportunities, primarily in the form of the construction industry.
The construction industry expanded by 29.8 % in 2012 and by 31.5% last year, and was driven by a number of large-scale projects such as the Husab Uranium Mine, the B2 Gold Mine, the Grove Mall and the SAB Miller Brewery.
However, growth will slow sharply once these projects are completed. Namibia’s transport and communication sector is also set to benefit significantly from the SADC Gateway Port, since it has the potential to open up Namibia to Zambia, the Democratic Republic of Congo (DRC), Zimbabwe, Malawi, Angola and Botswana. These countries have a combined population of over 140 million people and a combined GDP of billions of dollars.
If Namibia is able to tap into this burgeoning regional market by offering logistics and distribution services, there exists huge potential for sustained economic growth and employment. Handling volumes and rail transported cargo have doubled since 2012 and Namibia will have to be able to transport 4.5 million tons of cargo, which requires approximately 750 trucks and 15 trains per day by 2025, should the dream of turning the country into a logistical hub materialise.
The SADC Gateway Port will form an integral part of plans to turn Namibia into a regional leader in terms of logistics and distribution.
The creation of jobs will create a demand for goods and services, which will in return support industries such as wholesale and retail trade services and financial intermediation.
It will also provide an opportunity for developing small and medium-sized enterprises. The construction of the port and the wages it creates will generate revenue for government, which can be spent on addressing socio-economic issues.
Currently 6 664km (15%) of Namibia’s 44500 km road infrastructure is standard bitumen.
In contrast, Namibia’s rail network only extends for 2 488 km and there is currently no cross-border rail links with Angola, Botswana or Zambia.
According to the National Development Plan Four (NDP4), as of 2012 only 2.15 million tons of freight per annum is transported by rail, with a turnaround of 8.2 days and locomotive availability of only 69.5%.
This suggests that Namibia’s railways are underused and underdeveloped. This is a key area which must be addressed as efficient freight transport relies heavily on rail.
According to the World Bank the cost of exporting from Namibia amounts to US$1 650 per container.
The number of documents required totals eight and the average time required is 24 days.
The cost of importing to Namibia is US$1 805. The number of documents required is seven and the average time required is 20 days. These figures compare favourably to the rest of sub-Saharan Africa, but leaves significant room for improvement.
Otis Fink Namibian Sun