Content

Namibia

Content

Development potential
Priority areas of German cooperation with Namibia
Management of natural resources
Sustainable economic development
Transport

Situation and cooperation

Women and children in Namibia. Copyright: Photothek.net, KöhlerNamibia is classed as a middle-income country, yet there are few other countries where incomes are so inequitably distributed. So much so, in fact, that Namibia is one of the highest-ranking countries in the world on the 'Gini index', which measures inequality of income and wealth.

These social disparities have created a divide within society. A predominantly white elite and a new black middle class are often able to maintain a virtually European standard of living, while broad sections of the predominantly black population live in extreme poverty.

Closing this social divide and, above all, offering the younger generation new opportunities is the great challenge facing Namibian society – and also Namibian-German development cooperation. Other priority areas are land distribution problems, the scarcity of natural resources, the dangers posed to the natural environment by over-exploitation, the lack of jobs and the inadequate quality of the education system. The unemployment rate in Namibia is over 30 per cent. Added to this, however, is the large number of under-employed people engaged in subsistence farming.

The spread of HIV/AIDS is a tragedy affecting young people, especially, and women most of all. More than 15 per cent of the 15-49 age group are infected. The pandemic is also having a negative impact on the country's economic development. Namibia, already a sparsely populated country, is losing workers to the disease in both the public and private sectors.

The issue of energy is a further major obstacle to the country's future economic development. Namibia is heavily dependent on electricity imported from neighbouring countries, and South Africa in particular has been forced to reduce its deliveries in order to serve its own market.

Development potential

By African standards, Namibia is regarded as a sound investment prospect. It has a stable democracy and has achieved constant economic growth in recent years. The disadvantages for investors are that Namibia has a very small domestic market, relatively high labour costs and a lack of skilled workers.

Namibia's main potential lies in the extraction of mineral resources, in fishing and in tourism for independent travellers. Mining forms the backbone of the Namibian economy. The mining of diamonds, uranium, copper and other mineral resources provides an important source of foreign exchange. However, because the sector is highly mechanised, it provides only few jobs. Far more could be created if the extracted mineral resources were also refined on site. This would, however, call for skilled workers, which Namibia does not currently have in this sector of the economy.

The manufacturing industry is also underdeveloped in other areas. Most businesses are small to medium-sized and are almost exclusively involved in producing consumer goods for the local market. The focus is on food and drink production and fish processing. The fisheries industry profits from Namibia's favourable location close to the fish-rich Benguela Current, an ocean current in the South Atlantic. The Namibian government is endeavouring to redress the impacts of the overfishing that occurred during the South African occupation and has already achieved some success.

Tourism also offers opportunities for development, the best market being tourists from Europe. Given Namibia's natural beauty, its unique fauna and flora, its cultural diversity and the strong role that the German language continues to play, the country is becoming an increasingly popular destination for independent travellers from Germany. Since most tourists visiting Namibia also wish to visit the neighbouring countries with their transboundary game parks, the country is heavily dependent on the political stability of its neighbours. A further boost in tourist numbers is expected in association with the 2010 FIFA World Cup in South Africa.

African forest. Copyright: Matthias ReicheIn order to boost the country's development, it is particularly important that Namibia's natural resources be protected and that better use be made of its human potential. This means improving training, strengthening health care (especially with respect to HIV/AIDS) and creating jobs. These aspects are also key components of 'Vision 2030', the national long-term development plan, in which Namibia has set itself the target of achieving the standard of living of an industrialised country by the year 2030. Its core guiding principle is the reduction of poverty. It also acknowledges that controlling HIV/AIDS is a major challenge for all sectors of society and the economy.

Priority areas of German cooperation with Namibia

Germany's special historical responsibility towards Namibia is reflected in its sizeable programme of development cooperation. Since Namibia secured its independence in 1990, Germany has been its largest bilateral donor. For the two-year period 2009/2010, Germany has committed 125 million euros. No country in Africa receives more development funding per capita from the German government than Namibia.

The general environment for continuing that cooperation is good. The following priority areas have been agreed on:

  • management of natural resources

  • sustainable economic development

  • transport

Due to the major threat posed by the further spread of HIV/AIDS, efforts to control it remain a cross-cutting theme of bilateral cooperation.

2007 also saw the launch of the Namibian-German Special Initiative, for which the German government has made a total of 20 million euros available in addition to bilateral development cooperation. These funds are earmarked for community development measures in areas inhabited by those ethnic groups that endured particular suffering under German colonial rule. The small projects are designed to improve living conditions in these areas, and may pursue economic, social or cultural goals.

The measures benefit all the people living in the settlement areas concerned and thus actively support the Namibian policy of national reconciliation.

The Special Initiative aims expressly to foster a development process for the future rather than 'reparation' for the past. It combines aspects of poverty reduction and the participatory development of marginalised regions of Namibia with elements of encounter and understanding.

Management of natural resources

Namibia is the most arid country south of the Sahara. The soils are severely threatened by erosion; water is very scarce and natural resources are under threat from population growth and inappropriate management methods. Large stretches of land are under threat of desertification.

Some 70 per cent of Namibians depend directly or indirectly on agriculture for their living. As a result of colonialism and apartheid in the country's past, land ownership is very inequitably distributed. Most commercial farmland has been formed into larger farms, operated by whites; some 20 per cent of this land is now longer in the hands of whites, though. In the communal areas, on the other hand, there has been no individual land ownership so far. Generally it has been the traditional leaders who have granted permission in non-written form for the land to be used. Although land reform has been implemented successfully in quantitative terms, the quality of land reform has so far fallen short of expectations.

The sustainable and equitable economic use of natural resources is therefore a core objective in the strategy for reducing poverty, securing incomes, maintaining rural livelihoods and ensuring social peace in Namibia. Germany is assisting Namibia in its efforts to establish equitable access to land and water resources. At national level, the government is being advised on how to improve the general environment in this field and how to develop institutional capacities for the management of the environment and natural resources. At regional and communal level, the sustainable use of natural resources is being promoted, for example, by the establishment of resettlement farms, community forests and nature reserves.

In recent years, Namibian-German development cooperation has helped initiate and put in place key legal and planning frameworks enabling natural resources to be managed sustainably in Namibia.

Key quantitative targets have been met. Examples include: the allocation of 6.3 million hectares of commercial land to formerly disadvantaged households; the registration of more than 15,000 parcels of communal land; the launch of the strategic environmental assessment in the Erongo region (main uranium mining area); the start of rehabilitation of three major contaminated mining sites; the management of 464,000 hectares of land by community forest committees with 32,500 beneficiaries; the operationalisation of three national parks in northern Namibia; the establishment of two water basin management committees and furnishing of key groundwater data in the Cuvelai Basin; the delivery of extension services to some 1,500 new farmers by 24 on-farm mentors.

Sustainable economic development

The country’s main problems are the inequitable distribution of wealth, high unemployment and widespread poverty. Sustainable economic development is vital in solving these problems. Another issue which must be overcome is the division of the economy into a small formal sector and a large informal sector with a generally poorly educated and trained workforce. In the area of sustainable economic development, Namibian-German cooperation therefore focuses on supporting small and medium-sized enterprises (SMEs). To reduce dependency on the extractive industries in Namibia, Germany is providing particular support to small businesses and manufacturers.

At the same time, the financial sector is to be developed. Affluent sections of the urban populace have access to an adequate range of financial services. Yet, at present, the rural population and small businesses – particularly in the informal sector – have little access to such services and have to rely instead on moneylenders. With German support, therefore, financial institutions are to extend their range of services to these currently disadvantaged groups, for example by providing microcredit. In this way, micro enterprises are to be enabled to plan for the longer term, create more jobs and generate more profits.

A system for microfinance services has now been developed, with German support. So far it has been able to serve over 6,500 clients (92 per cent of them women) with cumulative lending of over 26 million Namibian dollars (about 2.3 million euros). More than 40,000 people have profited from this either directly or indirectly. The project is currently being transferred to Namibia's first microfinance bank.

The Namibian government has also been supported in developing a strategy for the private sector and preparing a white paper on regional and local economic development. With German support, the Namibian government has conducted a country-wide corporate census. Once the results have been evaluated in March 2010, Namibia will possess information on the number and structure of all companies in the country for the first time since independence. Furthermore, with support from German development cooperation the NAMPOST Savings Bank has been able to broaden its services by introducing a new payment system. The system, which is now being used by more than 280,000 customers, is based on a smart card with biometric security features. Furthermore a mentoring programme designed as a public-private partnership (PPP) involving German Technical Cooperation and two commercial banks is currently supporting some 400 micro, small and medium enterprises (MSMEs). The programme has succeeded in reducing the previous loan default rate of around 30 per cent to less than one per cent, and in significantly raising the volume of lending to MSMEs.

Transport

Although Namibia is almost two and a half times the size of Germany, it has a population of just 2.1 million. In order to achieve economic development, it requires a sound transport infrastructure.

German development cooperation is therefore advising the government, seconding experts and devising training programmes for the transport sector. Furthermore, the road network is being improved – especially in the densely populated north of the country, which is home to more than half of the total population. In the remaining areas, too, transport corridors are being upgraded, especially to the Walvis Bay deep-sea port, which is a transport node of supraregional importance for national and international shipments. It serves Namibia's landlocked neighbours, Zambia and Botswana, as a transhipment point, for example.

Since cooperation began almost 1,000 kilometres of road have been either built or rehabilitated, with German support; in the third phase alone of the Financial Cooperation programme 'Labour-Intensive Road Construction', 40 schools and 12 hospitals have been connected to the road network.

With support from German Technical Cooperation a road safety strategy was developed and road safety campaigns conducted – between 2004 and 2008 the number of road traffic accidents was reduced by 50 per cent. In 2008 more than 1,000 small and medium-sized enterprises took part in training measures covering other things among tendering procedures and project implementation in the roads sector.

Through a partnership between the Aachen University of Applied Sciences and the Polytechnic of Namibia an internationally recognised curriculum for civil engineering was developed – between 2004 and 2009 the number of enrolled students rose by 70 per cent. Since the first port extension at Walvis Bay was completed with German support in 2000, the total throughput at the port has risen by 50 per cent and the throughput of container cargo by 700 per cent.

Service-Links & Content-List

Ministry

What we do

Press room

Publications

Services

BMZ glossary
Close window

Facebook Twitter MySpace Favorites Mister Wong Google