Namibia: Emerging From Shadows

Tucked into the western corner of Southern Africa, sandwiched between the Atlantic Ocean and Botswana to the East, Zambia and Angola to its North and South Africa to the South, Namibia remains a little jewel of sheer natural beauty but seldom in the news. While oil-rich Angola attracts investments and South Africa leads the continent economically and geopolitically, Namibia remains in the shadows.

It is about time that the world, and India, reach out to this nation with a vast area for its small population (approximately 3 million) and some rich natural resources. Ravaged for almost a century by white big game hunters for its wildlife, it was the first nation to enshrine environmental protection in its constitution.

However, Namibia has emerged from the shadows in recent years thanks to several factors, including strong economic growth, a stable political environment, and a growing tourism industry.

Background

Namibia, called South West Africa by its initial German colonisers who were followed by the apartheid regime of South Africa that succeeded them, is no stranger to India. Way back in the 1940s, India was one of the first of the newly liberated nations of the developing world to champion the cause of its independence. Namibian independence struggle was led by SWAPO (South West Africa People's Organisation) under its guerilla leader Sam Nujoma who became its founding president. The Indian support was not restricted to political rhetoric but also included material support and military training for the fighters. Incidentally, when Namibia was formally declared an independent nation in 1990, the UN mission that oversaw this transition was led by an Indian General, Lt Gen Dewan Prem Chand. Since then, there has been cooperation in the military field with an Indian Air Force training team imparting flight training to Namibian air force pilots on India-supplied helicopters. Namibia is also a participating country in the Africa-India Field Training Exercises (AFINDEX) conducted regularly at Pune.

More important, from the Indian perspective, Namibia reportedly has the world's second-largest reserve of uranium. In 2009 India and Namibia signed a deal for nuclear cooperation once India was given the necessary exemption by the Nuclear Suppliers Group in 2008. Unfortunately, the deal remained in limbo as the Namibian parliament did not ratify it despite a great deal of diplomatic effort by India. For an ambitious nuclear energy producer like India, which plans to substantially increase energy production through nuclear reactors, an agreement on uranium supply from Namibia would benefit both countries.

Analysis

For long, India has extended its soft power outreach towards Africa, acknowledging the potential and size of its market. As the current president of the G20, India has been pushing the case for inclusion of the African Union in the G20 to give a voice to the African continent.

Namibia's economy has grown steadily in recent years, with real GDP growth averaging 4.5 per cent annually between 2010 and 2020. Several factors, including a strong mining sector, a growing agricultural sector, growing investment in tourism and manufacturing, and foreign investment have driven this growth. In 2021, Namibia's GDP grew by 5.4 per cent, making it one of the fastest-growing economies in Africa. China, of course, has dominated the market in most of Africa, and Namibia is no exception. India would like to get a slice of this market by competing fairly and squarely with its Asian rival.

Areas of particular interest for India would be the diamond industry (Namibia is one of the leading producers of diamonds) to feed India's world-renowned diamond polishing and jewellery industry. With its vast open spaces, albeit with very little natural rain or water, there is ample scope for enhancing agriculture in this country, where India's expertise in dry land cultivation could be put to good use.

Namibian desert and wildlife safaris are boosting tourist inflows into the country, where Indian investment could be a mutually beneficial enterprise. The country is home to over 600 species of birds, and there are many opportunities to go fishing in the Atlantic Ocean, the Okavango River, and the Kunene River. Over 1.6 million tourists visited Namibia in 2021. However, the industry is under pressure due to the country's high airfare cost and limited hotel accommodations and other ancillaries that international tourists expect. 

India is not alone in being attracted to Namibia in recent years, as billions of dollars of FDI have flowed in from companies such as Rio Tinto, Anglo American, and De Beers. However, Namibia also faces some challenges as it seeks to continue its economic growth. One challenge is the country's high unemployment rate, currently around 23 per cent.

The strongest factor favouring Namibia as an investment destination is its stable political environment with a strong tradition of democracy. Free and fair elections are held on time leading to a peaceful power transfer.

Like any other developing country, investments in Namibia will face challenges. One singular challenge is the stark inequality that prevails despite over three decades of independence. Namibia has one of the highest Gini coefficients, with the richest 10 per cent of Namibians controlling over 40 per cent of the country's wealth.

Another challenge is the high unemployment rate. The official unemployment rate is around 23%, but the real rate is likely even higher. While law and order is still not a major issue like many emerging African economies in the region, the danger exists.

However, Namibia is a resilient country with a strong track record of overcoming challenges. With continued effort, Namibia is likely to overcome these challenges and progress in the years to come. The current president, Mr Hage Geingob, has been in office since 2015 with considerable administrative experience and a clean record. He has a strong track record in economic management.