Nothing sinister about new auto plant

WALVIS BAY South Africa wants assurance that an auto assembly deal in Namibia does not breach Southern African Customs Union rules.

17 December 2018 | Ministries

Dr Micheal Humavindu; Deputy PS of Trade; “We cannot get involved in arguments with industry representatives.”

Otis Finck - The ministry of industrialisation, trade and SME development will not respond to allegations made by the National Association of Automobile Manufacturers of SA (Naamsa) about the new Opel Peugeot assembly plant in Walvis Bay.

The ministry's deputy permanent secretary, Dr Micheal Humavindu, said without substantive evidence and facts, it will not react to Naamsa's claims.

“Our approach as a country is therefore crowd in investment for the promotion of regional and bilateral value chain development. We cannot get involve in arguments with industry representatives. Discussion should rather be on ensuring how such a project could fit into the regional value chain.”

Humavindu responded to an online Business Day article last week about the South African government and Naamsa's concern over the assembly plant in Namibia with regard to import duties and the potential breaching of Southern African Customs Union (Sacu) rules.

South African officials and auto companies want Namibia to explain the deal which allowed Peugeot to open the assembly plant for the construction of vehicles destined for the South African market, for example. They also requested assurance that Sacu rules which allow the vehicles to be exported duty free to SA and other Sacu member states are not breached

Nico Vermeulen, the director of Naamsa, told Business Day the organisation had also requested SA customs authorities to investigate the issue.

Humavindu said in order to qualify for the Automotive Production and Development Programme (APDP) an automotive manufacturer needs to produce 10 000 cars a year.

“The likes of Peugeot and other smaller players hardly sell more than 500 cars a month. So they most likely won't go to South Africa or set up a plant in the region. However, the Peugeot plant is an opportunity to provide an alternative pathway for them to consider other Sacu member states. What we then have to do at the Sacu level, is to promote more of them to set up shop here whilst we integrate them sooner than later into the components supply chains that are in RSA and the nascent ones in Botswana.”

He concluded that the aim is to safeguard and enhance regional productive capacity and intra-Sacu trade linkages. He said Naamsa is welcome to engage the ministry to have a meeting of minds.

Johnny Doeseb, chairman of the Namibia Chamber of Commerce and Industry Walvis Bay, welcomed the establishment of the plant as a step in the right direction from government towards industrialisation. He applauded all parties involved in making it a reality.

Doeseb said the cry by South African authorities is a clear indication that they still want to be the dominant force in the Sacu and SADC region.

“South African authorities must stop with their bully mentality. Namibia is a free and democratic country with a lot of positives to offer to investors. Our political environment is stable and we have a labour force that is not disruptive like in South Africa which has become synonymous with unnecessary strikes.”

He called on government to implement similar initiatives and adopt this type of practise in all major commodities and natural resources sectors that are being exported raw.

“Processing of natural resources to finished products must be done in Namibia. We must stop exporting our raw material by imposing high tariffs on such exports. That way we will create more local factories and jobs at home as well as develop skills.”

According to Doeseb more motor manufacturers will soon follow because their investment in Namibia will be secured and return on investment will be huge.

“This is just the beginning of good things. We must encourage the use of more locally produced products to be used. SMEs must be assisted to ensure components such as plastic door handles and leather products for seats needed in the production of these cars are made in Namibia. That way more people will be empowered and more jobs created.”

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