RESTRICTED
WORLD TRADE WT/TPR/G/37
6April 1998
ORGANIZATION(98-1318)
Trade Policy Review Body Original: English
TRADE POLICY REVIEW
NAMIBIA
Report bytheGovernment
Pursuant totheAgreement Establishing theTrade Policy Review Mechanism (Annex 3ofthe
Marrakesh Agreement Establishing theWorld Trade Organization), thepolicy statement bythe
Government ofNamibia isattached.
Note:Thisreport issubject torestricted circulation andpress embargo untiltheendofthemeeting
oftheTrade Policy Review Body onNamibia.Namibia WT/TPR/G/37
Page 3
TABLE OFCONTENTS
Page
I. MACROECONOMIC PERFORMANCE 5
II. GENERAL TRADE POLICY OBJECTIVES 6
III. SECTORAL TRADE POLICIES AND DEVELOPMENT 8
(i) Agriculture 8
(ii) Fisheries 8
(iii) Mining 9
(iv) Manufacturing 9
(v) Services 10
IV. INSTITUTIONAL LEGAL FRAMEWORK AND POLICY FORMULATION 11
V. TRADE RELATIONS (BILATERAL, MULTILATERAL AND
REGIONAL TRADE COOPERATION) 11
VI. ECONOMIC ENVIRONMENT AND FACTORS INFLUENCING TRADE POLICY 12Namibia WT/TPR/G/37
Page 5
I. MACROECONOMIC PERFORMANCE
1. Therateofeconomic growth, between 1990and1997, hasgenerally beenpositive. Theaverage
growth rateofgross domestic product (GDP) was4.1% during thisperiod. However, theeconomic
growth ratedecelerated from6.5% in1994to2.8% and3.7% for1996and1997, respectively. This
average rateofgrowth isslightly lower thanthe5%growth targeted under theFirst National
Development Plan(NDP1). However, itisstillconsidered satisfactory taking intoaccount various
adverse external environmental factors, suchaspoorrainfalls, which affected agricultural production,
andadverse oceanic conditions, which affected thefisheries sector. Inaddition, thepoorperformance
ofthemining sector, particularly thedecline indiamond output, bynearly 27%in1993, contributed
totheoverall poorperformance oftheeconomy.
2. Realpercapita income rosebyanannual average of0.6% between 1990 and1995. In1996,
however, therealpercapita income declined by0.3%. Thisismainly duetoapopulation growth
rateof3.2% peryearforthesame period.
3. Economic growth prospects for1997 andbeyond aregood duetothegood rainfalls received
in1997 andtheexpected recovery offishstocks. Additionally, manufacturing activity isexpected
toincrease significantly, asmany companies starttooperate intheExport Processing Zones.
4. Therateofunemployment wasestimated at19%ofthetotallabour force in1991. However,
thelackofdatamakes itdifficult tocontinuously assess employment conditions inthecountry
5. Theannual rateofinflation fluctuated between 18and8.6% fortheperiod 1990 to1997.
Between 1994and1997, inflation came down tosingle-digit figures. Thistrend isexpected tocontinue
forthecoming years.
6. Thecurrent account ofthebalance ofpayments exhibited asurplus while thecapital andfinancial
accounts recorded adeficit during theperiod under review. However, thedeficit inthecapital account
narrowed in1993 and1995. Development inthelongtermandportfolio investment contributed to
thenarrowing deficit. Outflow ofcapital intheformoflifeassurance decreased tremendously in1993,
while investment inportfolio assets andthemining sector decreased. Thenarrowing ofthedeficit
in1995wasmainly duetoadecline infunds outflow andahighinflow ofcapital inportfolio anddirect
investment.
7. Thelevel offoreign exchange reserves wasN$1.218 billion inDecember 1997. Thisis
equivalent tocover theimports of7.2weeks.
8. TheNamibian dollar (introduced inSeptember 1993) islinked totheSouth African Rand.
Thepegging oftheNamibia dollar totherandrequires thattheBank ofNamibia operate itsmonetary
policy broadly inlinewiththatoftheReserve BankofSouth Africa. Bymaintaining thisparity, Namibia
canreapthebenefits oflowinflation, provided theSouth African monetary policy remains credible
andsound.
9. Thefiscaldeficitcurrentlystandsat6.2%ofGDP.Thedeficitreflectsanincreaseingovernment
expenditure, particularly onpersonnel, which hasbeenincreasing atarateofmore than14%over
thepastfiveyears andhasbeenfinanced largely through domestic borrowing fromtheissueoftreasury
bills. Thestance oftheGovernment istofinance thedeficit inanon-inflationary manner aswellas
tolimittheoverall fiscal deficit toaround 3%ofGDP bytheyear2000.WT/TPR/G/37
Page 6Trade Policy Review
10. Thepublic debtoftheCentral Government hasrisen inrelation toGDP from 12.7%, atthe
end1989/90 to23.6% attheendoffiscal year1995-96. Thepublic debtfor1997 isestimated as
21.7%. Thisisslightly below thatoftheprevious financial year, because ofpre-independence debt,
which waswritten offin1997.
11. Inorder tostimulate andattract investments, theGovernment hasembarked ontheestablishment
oftheExport Processing Zones (EPZ) andtheintroduction ofother export-oriented incentive packages
suchasthespecial incentives formanufacturing enterprises andexporters.
12. Established in1992, theNamibia Stock Exchange hasgrown from sixlistings inDecember
1992 withacombined market capitalization ofN$15.1 billion, to33listing worth N$150 billion at
theendof1997. Turnover reflects thesameimpressive development, rising fromN$1million in1993
toN$932million in1997.
13. Oneofthekeypolicy instruments toreduce theGovernment 'semployment andwage billis
through conducting operations onacommercial basis, out-sourcing andeventual privatization ofsome
government functions. Following therecommendation oftheWage andSalary Commission in1995,
itwasacknowledged thatprivatization is,inprinciple, ameaningful method ofreducing thesizeof
theNamibian civilservice. Asanintermediate approach, however, itwasdecided tostarttheprocess
byreforming existing state-owned enterprises andbyestablishing newcommercial entities fromexisting
government departments, directorates anddivisions. Theintention istoestablish economically and
financially viable enterprises, which arenotdependent onthegovernment budget andthentoallow
partial, orfullprivatization ofthese corporations atanappropriate future stage. Some institutions,
forexample, theelectricity utility andthepostandtelecommunication services, arealready being run
onacommercial basis.
II. GENERAL TRADE POLICY OBJECTIVES
14. Trade liberalization andinvestment promotion constitute keyelements ofNamibia 'stradepolicy
framework andherdevelopment strategy. Thefollowing arethemain objectives:
(a) promotion andfurther liberalization oftrade;
(b) expansion ofexports anddiversification, interms ofbothproducts andmarkets;
(c) provision oftax-based incentives formanufacturing enterprises andtraders;
(d) support tosmall andmedium-size enterprises (SMEs); and
(e) creation ofanenvironment conducive toinvestment andgrowth.
15. Withtheobjective ofattracting investments, thegovernment has,sinceindependence, embarked
oncreating amultifaceted incentive regime thatfocuses onmanufacturing andexport-oriented industries:
(a) thecorporate taxratehasbeenreduced to35%;
(b) noincome taxispayable ondividends accruing toresident shareholders (with theexception
ofsome building societies 'dividends ofwhich onlyonethirdistaxfree);
(c) non-resident shareholder tax(withholding tax)hasbeenreduced to10%;
(d) plant machinery andequipment canbewritten offoveraperiod ofonlythree years; and
(e) buildings canbewritten offover20years, with20%depreciation allowed inthefirstyear.
16. TheSpecial Incentives forManufactures allow registered manufacturers 50% taxabatement
ontaxable income foraperiod offiveyears, tobephased outoverasubsequent period oftenyears.
Further, manufacturers:Namibia WT/TPR/G/37
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(a) canwrite-off factory building overonlytenyears;
(b) areexempted from paying salestaxes ontheimport ofmanufacturing machinery;
(c) areallowed anadditional taxdeduction of25%forproduction linewages andtraining expenses,
(i.e.deductible at125%); and
(d) canclaim taxdeductions andevencashgrants forexport promotion activities.
17. Topromote Namibia asatrading centre within southern Africa, theGovernment hasintroduced
averygenerous taxallowance onincome derived fromtheexport ofmanufactured goods. An80%
taxabatementisallowedonthetaxableincomederivedfromtheexportofmanufacturedgoods(excluding
meatandfish), irrespective ofwhether these goods havebeenmanufactured inNamibia ornot.
18. Theflagship ofNamibia 'sincentive regime istheExport Processing Zone (EPZ) regime.
Enterprises withEPZstatus areexempt from allcorporate income tax,customs duties ontheimport
ofrawmaterials andmachinery, salestaxes, transfer duties andstamps, i.e.theycanoperate inatotally
tax-free regime. EPZenterprises arefreetolocate anywhere inthecountry asasingle factory EPZ,
orwithin anEPZparkasdeveloped inWalvisbay andthenorthern border withAngola.
19. TheGovernmentencouragestradediversificationbypromotingthemanufactureofexport-oriented
non-traditional goods aswellasother value adding activities. Inrecognizing theprivate sector asthe
engine ofeconomic growth, theGovernment hastaken initiatives directed atcreating anenvironment
conducive tothegrowth oftheprivate sector. Towards thisend,Namibia hasputinplacecomprehensive
investment legislation, whose framework istocreate anattractive environment forinvestors. Inthis
context, various incentives arebeing offered, suchasthoseunder theExport Processing Zones -directed
atexport-oriented value adding activities, which aremeant toseekandpenetrate international markets.
20. Inadditiontotheoverallincentiveframework,includingtheEPZ,theGovernmenthasintroduced
theconcept of"industrial parks" aspartofitsinvestment promotion strategy. Theaimofthese parks
istocaterforthose investors whoneedready-made factory shells. Industrial parks canaccommodate
small/medium andlarge-scale business enterprises.
21. SMEs arealsobeing given highpriority astheyformthebasisofbusiness development, rural
development and,subsequently, large-scale industrial development. Tothisend,theGovernment has
recently adopted anSME policy aspartofitsoverall industrial policy. Theunderlying principle is
tobroaden theindustrial base, which hardly existed atindependence in1990.
22. Namibia recognizes thatanefficient andexpanding private sector operating inafreemarket
environment willbethedriving force oftheeconomy interms ofemployment creation andincreased
incomes. Assuch, theGovernment willcontinue tofacilitate andplayacatalytic roleinproviding
anenvironment conducive toprivate sector growth. Policy willfocus onthedevelopment ofhuman
resources, development andimprovement ofinfrastructure, promotion oftradeanddiversification into
non-traditional exports.
23. Namibia attaches great importance tothemultilateral trading system, which hascontributed
much tostability andgrowth ininternational trade. Namibia has,therefore, always supported therole
oftheWTO instrengthening themultilateral trading system. Intheareaofmarket access, Namibia
iscommitted tocontinued liberalization oftrade andofinvestment fortheproduction ofgoods and
theprogressive opening oftheservices sector. Namibia willcontinue topursue tariff reductions in
linewithitsliberalization efforts andcommitments intheWTO. Non-tariff measures willbe
continuously reviewed withaviewtotheirprogressive elimination.WT/TPR/G/37
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III. SECTORAL TRADE POLICIES AND DEVELOPMENT
(i) Agriculture
24. Agriculture isoneoftheprincipal sectors oftheNamibian economy. Infact,most ofthe
Namibian population liveinruralareas andderive theirlivelihood fromagriculture. TheGovernment
hastaken anumber ofinitiatives whose objectives are,notonlytoimprove agricultural productivity,
butmost importantly toensure sustainable landutilization andfoodsecurity atbothhousehold and
national levels.
Inthiscontext, theNational Agricultural Policy aimsfor:
(a) highandsteady growth ratesinfarmincomes;
(b) increase inagricultural productivity andproduction levels exceeding population growth rates;
(c) investment inagriculture andindomestic processing toaddvalue toagricultural products;
and
(d) integration ofcommunal farmers intothemainstream ofeconomic activity intheagricultural
sector.
25. Agricultural activities inNamibia aresubject tounpredictable climatic conditions thatare
characterized byfrequent droughts. Forexample, agricultural output, which rosesignificantly in1995,
fellagain in1996 duetotheeffects ofdrought.
26. TheGovernment iscommitted togradual movement towards afullyliberalized agricultural
trade regime asrequired bytheWTO Agreement. Already, themajority ofNamibia 'sexternal
agricultural trade isunrestricted, other thanfortheapplication ofimport tariffs andnon-restrictive
phytosanitary andveterinary control measures. Inthecaseofthecontinuing quantitative restrictions
onmaize andwheat imports, there isanongoing liberalization process driven bythestrong national
commitment totheWTO Agreement. Thisprocess must bemanaged withcaution, given thehigh
vulnerability ofaneconomy assmall asthatofNamibia.
(ii) Fisheries
27. Thefishing sector isamajor component oftheNamibian economy andisoneofthesectors
withthegreatest potential forgrowth, interms ofemployment creation andexport revenues. The
sector 'sshare ofrealGDPincreased from4.5% in1990to7.7% in1994. Thesector 'sshare ofGDP
for1997 isestimated at6.5%. Employment inthefisheries sector in1997, isestimated at13,500
andisprojected torisetoaround 15,000 in1998.
28. From 1994, severely adverse marine environmental conditions caused adownturn instocks
intheBenquella system, andin1995 landings hadfallen backfrom 789,000 to564,000 tonne, with
afurther fallin1996.
29. Namibia hasmade therecovery ofitsstocks, which were almost depleted atindependence,
oneoftheprincipal aimsofitsfisheries policy. Inlinewiththispolicy principle, anewFisheries
Actwasenacted andprovides fortheexercise ofcontrol overfisheries andrelated matters, witha
viewtosecuring conservation ofmarine resources inwaysthatprovide maximum benefits toNamibia.Namibia WT/TPR/G/37
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Itseeks toachieve, interalia,thefollowing objectives, which constitute keyelements ofthefisheries
policy:
(a) longtermsustainable utilization ofmarine resources;
(b) development oftheindustry inawaythatcontributes tothenational economic andsocial
development goals;
(c) faircontribution ofthefisheries sector tostaterevenue; and
(d) active participation byNamibian nationals inthesector, forexample, through jointventures
withforeign investors.
(iii) Mining
30. Themining industry hasbeenanimportant partoftheeconomy andcontinues toplayadominant
roleinterms oftotalexports, andforeign currency earnings. Thesector contributors upto15%of
GPD, 11%oftaxearnings and60%ofallexport earnings (ofwhich twothirds aregenerated bythe
diamond mining industry).
31. Despite theadverse effect ofdepressed metal prices world-wide, therehasbeenapositive trend
inexploration activities inNamibia. In1994, N$38 million wasspent onexploration inthecountry,
N$95 million in1995, N$118 million in1996anditisestimated thatN$120 million wasspent in1997.
32. Thesuccessachievedbylarge-scaleoffshorediamondminingoperationshasattractedtheinterest
ofinvestors,withthepotentialoffurthersignificantincreasesinNamibia'sdiamondoutputinthecoming
years. Further exploration forgold, dimension stones andprospecting activities forbasemetals are
settoincrease inthefuture.
33. TheroleoftheGovernment inthemining sector istocreate anenvironment thatensures a
competitive return oninvestments totheprivate mining sector andmaximum revenue totheState.
Towards thisend,theobjectives ofthegovernment asoutlined intheNDP1, interalia,include the
following:
(a) revitalization andpromotion oftheindustry withaviewtomaking Namibia anattractive place
inwhich toinvest, reside andwork;
(b) facilitation andpromotion ofmineral exploration, mining andmineral processing which are
carried outbytheprivate sector;
(c) increased knowledge ofNamibia 'smineral resources through increased exploration efforts and
dissemination ofinformation;
(d) encouragement oflocalupgrading ofminerals including processing activities; and
(e) encouragement oflinkage ofthemining sector totherestoftheeconomy.
(iv) Manufacturing
34. Namibian 'smanufacturing sector isunder-developed interms ofitslackofdiversification,
modern technology, skilled labour anditsgeographical concentration. Todate,manufacturing other
thanfoodprocessing plays aminor roleinNamibia 'seconomy. Manufacturing asawhole contributes
slightly more than11%toGDPandemploys lessthan6%ofthework force. Theshare ofmanufactures
inexports, which stood at28%in1995, however, isimpressive butthese exports comprise mainly
fish,meatandfoodprocessing. Itisinrecognition oftheneedtoincrease ourmanufacturing capacity
thattheMinistry ofTrade andIndustry introduced special incentives formanufacturers andexporters.
TheMinistry isalsoassisting thesmall-scale andinformal sector toexpand andtoincrease itsWT/TPR/G/37
Page 10Trade Policy Review
contributiontotheGDP.Inordertobroadenthemanufacturingbase,theGovernmenthasalsoembarked
upontheestablishmentofexportprocessingzones,theupgradingandpromotionofthepartsofWalvisbay
andLuderitz andthelaunch ofindustrial parks andsmall andmedium-scale enterprises. Despite all
these efforts, theneedforincreased value-added activities inallsectors remains. Thefocus ofthe
Government 'sindustrial policy isfacilitation rather thanregulation. Therefore, there arecurrently
nosectors excluded fromentry byforeign investors andnoprice controls formanufacturing outputs.
Foreign investors arenotrequired toengage localjointventure partners, butcanown100% oftheir
investment.
(v) Services
35. With acontribution ofmore than60%, theservices sector isthegreatest contributor tothe
GDP. Thesector isalsoalargeemployment provider, accounting forover57%ofallemployed persons.
Themajor contributor totheservices sector isthegovernment service. Other important contributors
arethefinancial, realestate andbusiness services, tourism andthewholesale andretailtradesub-sectors.
(a) Financial sector
36. Namibia hasarelatively developed financial system. TheMinistry ofFinance isresponsible
foroverseeing government policies andoperations withregard tofiscal, monetary andfinancial affairs.
InAugust 1990, theBank ofNamibia wasestablished withtheobjectives topromote andmaintain
internal andexternal monetary stability, tofoster monetary, credit andfinancial conditions conducive
toorderly, balanced andsustained economic development andtoassist inattaining national economic
goals.Therearefivecommercialbanksand16financialinstitutionsoperatinginNamibia.Theyprovide
comprehensivedomesticandinternationalbankingservicestothecountry.Inadditiontogeneralbanking
facilities, suchashirepurchase andarranged leasing, special merchant banking packages canbe
structured. TheNamibian banking sector islinked tothemajor international communications network,
including SWIFT, ensuring fastandeffective transfers offunds toandfrom anycentre intheworld.
(b) Tourism
37. Tourism iscurrently theleading andfastest growing industry intheworld. InNamibia, tourism
isaremarkable contributor toGDP (almost 7%), thirdaftermining andagriculture. Itisestimated
that,shortly aftertheturnofthecentury, tourism willbethelargest contributor toGDP. Thisprojected
growth inthetourism industry willhaveamajor positive effect ontheNamibian economy asawhole.
38. TheMinistry ofEnvironment andTourism promotes andregulates tourism locally andabroad.
TheMinistry manages 12tourist resorts, aswellasanumber ofcamping sites, situated mainly innature
reserves andconservation areas. More thanthreequarters ofthetotalnumber ofaccommodation units
andbedsintheNamibian tourism industry aresupplied bytheprivate sector. Alltouroperators and
travel agents, aswellasmostofthesubsectors ofthetourism industry, arepartoftheprivate sector.
Thecommercialization oftheNamibia Tourist Resorts ispending.
(c) Telecommunications androadinfrastructure
39. Especially taking intoaccount itssize(824000square kilometres) andpopulation (1.6million),
Namibia isproud tosaythatshehasoneofthemostmodern telecommunication infrastructures inAfrica.
There are60automatic telephone exchanges inNamibia. Customers candialdirectly to199countries.
Todate, thenetwork capacity isaround 100,000 ports with109,400 subscribers, 29manual serviceNamibia WT/TPR/G/37
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nodes and14multi-party linesserving 6,400 customers withbasic telephone services. Local dial-up
access toe-mail andInternet services ispossible inlarger urban centres.
40. Namibia hasawell-established roadinfrastructure. Themajority oftowns andcommunities
canbereached bytheexisting roadtransport network thatcovers atotaldistance of45,000 km.The
country islinked byroad toZimbabwe, Zambia, Botswana, Angola andSouth Africa. Major
development projects include theTrans-Kalahari highway, linking Namibia toBotswana andSouth
Africa, andtheTrans-Caprivi highway toBotswana, Zimbabwe andZambia. Namibia alsoparticipates
intheWalvisbay-Maputo corridor, which willlinkthetwoports.
IV. INSTITUTIONAL LEGAL FRAMEWORK AND POLICY FORMULATION
41. Namibia isamulti-party democracy. Theconstitution isthesupreme lawoftheRepublic of
Namibia andprovides fortheseparation ofpower between theExecutive, Legislature andtheJudiciary.
42. Thepower toconclude international treaties, including trade-related agreements, isvested in
thePresident, (who normally delegates suchresponsibility toaportfolio Minister). However, such
treaties/agreements onlybecome operative andbinding when ratified byParliament. These same
procedures were followed fortheWTO Agreements.
43. TheMinistryofTradeandIndustry(MTI)is,inthefirstinstance,responsiblefortheformulation
oftrade policy aswellasitsimplementation, including negotiating trade agreements attheregional
andmultilateral level. Other lineMinistries andagencies oftheGovernment participate intheprocess
offormulating trade policy andinnegotiation oftrade agreements.
44. TheGovernment periodically consults, formally andinformally, withtheprivate sector on
thedesign ofeconomic andtrade policy.
45. Cabinet approval isrequired forinitiatives byportfolio ministries toform, oramend legislation.
Tabling andapproval ofabillinparliament arefollowed byconsent bythePresident oftheRepublic
ofNamibia andpublication oftheActintheGovernment Gazette, afterwhich thebillbecomes law.
V. TRADE RELATIONS (BILATERAL, MULTILATERAL AND REGIONAL TRADE
COOPERATION)
46. Namibia isanopeneconomy. Inrecognition ofthis,thecountry attaches great importance
totradecooperation, onbothregional andglobal levels, asameans ofsecuring andenhancing export
marketsandfosteringinternationaleconomiccooperation.Namibiaisasignatorytoanumberofregional
andinternational tradeagreements. These include theSouthern African Customs Union (SACU), the
Southern African Development Community (SADC), theCommon Market forEastern andSouthern
Africa (COMESA), theLomé Convention, andtheWorld Trade Organization. Namibia hasalsosigned
aPreferential Trade Agreement withZimbabwe. Asimilar agreement isbeing negotiated withZambia.1
Additionally,bilateraltradeagreements,providingmost-favoured-nation(MFN)statushavebeenentered
intowiththefollowingcountries:Cuba,DemocraticRepublicofKorea,DemocraticRepublicofCongo,
India, Ghana, Malaysia, China (People 'sRepublic of),Romania andtheRussian Federation.
1Ithasbeendecided among SACU members, intheframework oftherenegotiation oftheSACU agreement
thatpreferential trade agreements withthird parties must benegotiation onaSACU-wide basis.WT/TPR/G/37
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47. Beside trade agreements, Namibia forms partoftheCommon Monetary Area(CMA), which
isanexchange control mechanism alsocomprising Lesotho, Swaziland andSouth Africa. Under the
CMA Agreement,NamibiaappliesexchangecontrolssimilartothoseinSouthAfrica.Thisarrangement
isrecognition oftheinter-dependence ofthecountry 'sbanking system withthatofSouth Africa. As
aresult ofthisarrangement, thescope foranindependent monetary policy isverylimited. Thishas
ledtoasituation where theBank ofNamibia generally follows developments inSouth Africa andthe
actions oftheSouth African Bank (SARB).
48. TheGovernment ofNamibia views theSACU Agreement asthecoreofitsregional integration
efforts. Similarly, theGovernment recognizes thatthestructure ofprotection anddecision-making
under theexisting SACU Agreement inhibits trade-related development, suchasmanufacturing activities
inNamibia. Therefore, there isaneedtoreform SACU tomake itmore transparent, democratic and
mutually beneficial. Tothisend,therenegotiation ofSACU began inNovember 1994.
49. Namibia isamember oftheSADC. Namibia attaches great importance tothisarrangement
andviews itasastrategy tobroaden regional trade and,therefore, promote economic growth forall
contracted parties. Inthiscontext Namibia signed theSADC Trade Protocol, which wasagreed in
August 1996andwhose mainobjective istheestablishment ofafreetradeareawithin eightyears after
implementation.
50. Namibia, asamember oftheWTO, iscommitted toaliberal andfairtrading regime, which
entails progressive liberalization ofworld trade through thereduction andeventual removal oftariff
andnon-tariff barriers totrade. Namibia believes thattrade liberalization canstrengthen theoverall
competitiveness ofitseconomy andboost itsexports. Namibia 'scommitment intheUruguay Round
was,toalarge extent, guided byitsSACU membership. AsaSACU member, Namibia endorsed
South Africa 'soffer totheWTO andis,therefore, linked tothetariff programme ofSouth Africa,
whichincludessignificantUruguayRoundcommitments,reflectingSouthAfrica'sstatusasadevelopment
country.
VI. ECONOMIC ENVIRONMENT AND FACTORS INFLUENCING TRADE POLICY
51. External factors playanimportant roleintheeconomic growth ofNamibia, especially given
thesmall sizeofthedomestic market. Itsreliance onexports ofprimary commodities, especially
minerals, fishandmeat, assignificant contributors toGDP andforeign exchange receipts, makes the
economy vulnerable toexternal shocks. Thiswould beaggravated byanylossofpreferences granted
under GSPschemes andtheLomé Convention. Also, thesmall sizeoftheeconomy prevents adequate
development ofinter-sectoral linkages.
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