Namibia could benefit from stronger economic growth in South Africa since it potentially increases the demand for Namibian goods and services, including tourism,
Economic Association of Namibia Research Associate, Klaus Schade, has said in view of major investments into South Africa announced this week.
South African President, Cyril Ramaphosa, announced this week that China, a member of the BRICS countries, will invest US$14.7 billion in South Africa.
This comes as South Africa this week hosted the BRICS summit, which was also attended by President Hage Geingob as an observer.
According to the Namibian Statistics Agency, the BRICS region, which is made up of Brazil, Russia, India, China and South Africa ranked as the third largest export market for the Namibian economy during the first quarter of 2018, registering a figure of N$3.6 billion.
Over 35 percent of Namibia’s total value of goods exported was destined to the EU, making that region, Namibia’s largest export destination in the first quarter.
SACU and BRICS occupied the second and third positions, accounting for 29.5 percent and 20.1 percent shares of total exports respectively.
Schade said the new deals announced this week could also provide new business opportunities for Namibian businesses as supplier of inputs, and opportunities to create and expand regional value chains.
“However, this would require Namibian businesses to actively engage with South African businesses and explore these potential opportunities,” he said.
Little details have been made available about the reported investment deals totalling US$14.7 billion, and it remains to be seen how many of these projects will eventually materialise, Schade said.
“It also needs to be seen, to which extent these investments benefit the manufacturing and service sectors and result in new jobs. However, investment in infrastructure, science and technology should increase productivity and hence competitiveness.”
Schade said should the full amount of US$14.7 billion materialise, it would be a significant increase in investment flows from BRICS member states into South Africa compared to the US$18 billion over the past one and a half decades.
The agreements signed by South Africa and China include visa relaxation, a N$33 billion loan for Eskom and a Chinese Bank loan to Transnet.
Meanwhile‚ South African Trade Minister, Rob Davies‚ has said that the country has given more than it got in its investment partnerships with BRICS countries and this has to change.
He revealed a US$60 billion outward investment by South Africa to the other BRICS countries between 2003 and 2017.