Automotive sector a key drive to industrialisation

Floris Steenkamp

The recent commissioning of a vehicle assembly plant of Peugeot Opel Assembly Namibia (POAN) at Walvis Bay must be a re-assurance to the international community that Namibia remains committed to become the premier destination in Africa for Foreign Direct Investment (FDI). That assurance was given at the opening of the plant last Wednesday by Namibia’s Head of State Dr. Hage Geingob.

Looking back at post-Independence history the plant, owned and operated by Groupe PSA (France automaker), it is not Namibia’s first effort at establishing a vehicle assembly industry. In the first years after mid-nineties there were the ARO assembly plant at Gobabis and also the Uri vehicle that was scratch-built at first on a farm at Koës in Southern Namibia and later in Windhoek before the factory located to Gauteng in South Africa. The ARO plant closed down.
POAN however, is a massive stride in rekindling Namibia’s aspirations to use vehicle assembly as one of the means to achieve indus-trialisation by 2030. The factory was established at a price tag of N$190 million and tar-gets the assembly of 5 000 vehicles per annum by 2020.
In his keynote address at the official opening President Geingob stressed the importance of a competitive industrial sector for the country. Furthermore, with the emphasis on local value addition in order to assist other sectors like the small and medium sized enterprises to benefit and grow along with major industrialisation.
“We should always the mindful of the fact that Government’s efforts to attract FDI to Namibia’s shores are not merely for the purpose of establishing factories, but these investments should ultimately buttress our efforts to boost local enterprise development and increase the entry and participation of emerging and existing businesses into the mainstream economy, the President is quoted.
Namibia continues to battle the legacies of its past: severe pockets of poverty, unemployment and unequal distribution of income. In this in-stance shared economic development is seen synonymous with ending what the President refers to as Namibia’s “triple challenge”.
“It is our hope that POAN will be project that will bolster the diversification strategy set out in our Growth at Home Strategy. We expect our local small and medium enterprises to incur benefits from this investment, further enabling Namibia to realise the positive externalities and spill-overs from FDI”.
The automotive industry, said the President, is one of the priority sectors identified by the Growth at Home Strategy to raise Namibia’s industrialisation profile.
“We believe that by attracting investment into automotive, we will help diversify our economy and support our ambition to become a regional gateway that offers a stable political and economic environment for multi-nationals such as POAN”, concluded President Geingob on this particular subject.