Namibia's export led industrialisation policy: The case of the export processing zones
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Date
2002
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Abstract
The shift from an inward-oriented development strategy world over and lately in Africa has been accompanied by the emergence of Export Processing Zones (EPZs) invariably called, Bonded Warehouses, Transshipment Zones, Free Trade Zones and Licensed Manufacturing Warehouse, all terms referring to a geographical or juridically bounded area in which free trade including duty free import capital and intermediate goods are permitted provided that all or a significant share of the goods produced within the zone are exported. (Helena Johansson and Lars Nilson, 1997). The Namibian EPZ Act was passed in 1995. The implementation of the policy commenced in 1996. The objective of the Act is to promote export led manufacturing activities in designated zones where special incentives are provided for manufactures and exporters in the form of: No corporate tax, no general sales tax, no additional sales duty, no stamp and transfer duty, substantial reimbursement on training cost, permission to hold foreign currency account in local banks, the right to set up base anywhere in the country and legal prohibition against strikes or lockouts in EPZ enterprises
To date there are 12 companies operating in the Namibian EPZ. All together 121 companies applied for EPZ status since the inception of the program. In the beginning some interest in the EPZ program came from fly by night companies who abused the investor friendly reception demonstrated by the Namibian government. These companies compelled the Namibian government to institute an investors tracking system mechanism to ensure that the award of EPZ contracts should not benefit phony investors. The Offshore Development Company and the Walvis Bay EPZ Management Company are the sole agencies involved in the marketing and administration of the EPZ zones. To date these agencies face the task and challenge to bolster their efficacy in terms of enhanced investment application follow ups and the attraction of foreign direct investment to the zone
The policy research methods used in this study are based on an integrated framework for policy analysis. No particular hypothesis is under test. An integrated framework on policy analysis is based on a multidisciplinary analysis of the contents and the process of public policy. This is based on the assumption that a successful policy has to fulfil a plurality of criteria derived from the literature in political science, public administration, economics and sociology. These criteria generally are effectiveness (degree to which various objectives of the policy are achieved), efficiency (the time and cost used in policy implementation), responsiveness (the degree to which all stakeholders are satisfied), innovation (extent of creativity, innovation in the design, instruments and implementation of policy), political feasibility (extent to which the alternative chosen is politically feasible in the particular environment), administrative feasibility (extent to which the selected implementing agencies have the administrative capability or the need for it to be created to achieve the policy objectives). The EPZ program being an economic policy will be analysed in terms of employment created, utilization of the country's natural resources and the transfer of technology. The study will draw some lessons from the experiences of countries like Mauritius, Ireland and Zimbabwe
Additionally, the research will examine how the policy objectives of the EPZ programme in Namibia are being realised in practice. The performance of the policy will be analysed against the objectives of the Namibian EPZ Act and the views of stakeholders
In the long run the success of the Namibian EPZ program will depend on the political risk free environment in Southern Africa, the availability of skilled labour, macro-economic stability in the SADC region, good infrastructure and appropriate policies that can support trade and investments. At the moment it can be argued that the EPZ program in Namibia is more of a catalyst to curtail unemployment and poverty and to stimulate economic activities in general. However, caution should be made that the resources spent on the program should not invariably defeat the purpose for which the program was created. In other words the incentives provided to the investors should not crowd out on investments that otherwise would have brought about greater dividend than what the EPZ program requires
Political support towards the EPZ program has been strong from the cabinet and parliament. The labour union movement feels that the EPZ program does not protect the interest of the workers as they are exploited and underpaid. The majority of the EPZ companies state that their wages are comparable to those paid outside the zone. They also feel that the reimbursement of incentives is slowly implemented. To a large extent it is necessary for the Offshore Development Company and the Walvis Bay EPZ Management Company to improve upon their policy monitoring, evaluation and implementation capacity in order to attain the objectives set out for the EPZ program in Namibia
Description
Theses submitted in fulfilment of the requirements for the degree of Master of Public and Administration
Keywords
Export processing zones