Namibia's trade triumph: EU partnership yields record surplus

Namibia is reaping the fruits of a trade surplus as far as its relations with the European Union (EU) is concerned, a trade statistics report has shown.



The report, authored by independent economist Robin Shearbourne, further indicated that Namibia’s exports to the EU have grown each year since 2004, signalling the bloc’s economic importance, with Namibia’s merchandise exports in 2023 totalling almost US$5.5 billion alone.



“One of the standout features of Namibia’s trade relationship with the EU is its consistent trade surplus. Namibia has exported more to the EU than it has imported almost every year since 2004. This surplus isn’t merely a statistic; it represents a buffer of economic stability,” Shearbourne said.



Not completely one-sided

While Namibia enjoyed a trade surplus, its exports of raw materials to the EU ensured that the relationship was not completely one-sided, Shearbourne noted.

“While Namibia imports high-value goods like machinery, vehicles, and industrial equipment as well as cereals from the EU, its exports of raw materials and finished products ensure the scales remain tipped in its favour,” he said.

Despite Namibia’s over-reliance on South Africa as a primary source of imports, the EU demonstrated its reliability as an import market. On the import side, Namibia has historically relied heavily on South Africa, but this dependency has steadily decreased since 2004, partly as a result of more diversified sources of petroleum products which are significant for Namibia which does not yet produce or refine oil, the Shearbourne authored report noted.

“The EU has emerged as a reliable second source of imports, providing a range of goods essential for Namibia’s development. In 2023, Germany, the Netherlands, Italy, Spain, and other EU countries accounted for 75% of Namibia’s imports from the bloc. This diversification not only strengthens Namibia’s supply chains but also ensures access to high quality goods and advanced technologies,” Shearbourne said.



Policy recommendations

Despite enjoying a surplus, Shearbourne voiced concern that its reliance on raw materials as exports left it vulnerable to among others, currency volatility as well as socio-political factors.

“While the Namibia-EU trade relationship is robust, it is not without challenges. Namibia’s high concentration of exports leaves it exposed to external shocks. A slowdown in prices or demand for diamonds or uranium will significantly affect the economy,” Shearbourne said.

“Additionally, the global shift towards decarbonisation could alter demand for some of Namibia’s traditional exports. More importantly, it is important that the right legal frameworks are put in place to attract business and foreign investment,” he added.

According to Shearbourne, moving away from sector specific project deals towards creating a business friendly climate and the regulatory environment was imperative.

“In this, Namibia will need to balance the need for increased local content and jobs in the short run, and allowing business to bring in the skill needed to set up new business and thus stimulate local jobs creation in the long run,” he said.