Category: NTF in the News

SA retailers supplying products to Namibia have to abide by that country’s retail charter, which aims to control access to the local market to allow for the development of local suppliers.

The Spar Group is among those finding it challenging to operate in Namibia because local supplies are not always readily available. The retail charter was introduced by the Namibian government in 2016 to promote increased procurement of locally grown and manufactured goods. It has become the Achilles heel for SA retailers, which would largely have home products in their stores. 

According to the Namibian Trade Forum, one of the main objectives of the charter is to increase the retail shelf space devoted to local products. The charter aims to raise local procurement from 6% of purchases of all retailers, ultimately ensuring that 20% of products are sourced locally. “Should there be a short supply of product, this often results in stores not having sufficient stock for at least two weeks, if not longer,” said Mark Godfrey, group financial director at Spar.

Independent retailers connected with Spar are able to source up to 70% of their product requirements from local suppliers or manufacturers in Namibia. Spar’s sourcing is done by the group’s Namibian buying office in Windhoek. “Suppliers see them on a regular basis and discuss retail product requirements for the stores in Namibia,” Godfrey said.

“Trading arrangements are negotiated on behalf of our retailers and, once in place, retailers are encouraged to support them by placing orders directly on these suppliers for direct delivery.” “Spar manages the financial administration on behalf of the retailers, thereby also giving the suppliers further financial security of payment.”

Pick n Pay, which has 38 stores in Namibia, has franchise partners that actively seek out Namibian products. “Our franchise MD in Namibia is the chairman of the Retail Charter Council and we work constructively with government and communities wherever we operate,” said David North, group executive for strategy and corporate affairs. North said that in Namibia, Pick n Pay buys as much local product as it can obtain, particularly meat, fruit and vegetables.

A spokesperson for Shoprite, which has the largest store network of 152 stores in Namibia, said the group “is supportive of general transformation and opportunities for investment in local economies that aim to uplift the geographical areas and countries that we trade in and the people that we do business with”.

Godfrey said the Namibian government has been involved in the matter “and we appreciate this as well as our retailers’ commitment to support local suppliers where possible”.

http://www.fastmoving.co.za/news/retailer-news-16/sa-retailers-get-to-grips-with-namibia-charter-12199

Imports – The total number of imports from the EU into Namibia was US$ 6.7 billion in 2017. There is a decline of imports from the EU since 2014 on various goods and services consumed in Namibia.

The highest number of imports from the EU is Motor vehicles (US$ 425 million) which are declining since 2015. The second highest imports is copper, followed by medical equipment and telephone sets. Other key imports are tractor parts, tyres and steel.

Exports – The goods exported from Namibia to the EU was US$ 5.2 billion in 2017. The export value declined drastically in 2014 with a slight recovery in 2016 and 2017, the highest record of exports to the EU was recorded at US 6.3 billion in 2013. The major exports from Namibia to the EU is diamonds valued at US$ 1.5 billion in 2017, followed by gold at a mere US$ 427 million. The level of exports remain relatively very low.

Trade Balance – Namibia enjoys a healthy trade balance with the EU meaning exports don’t outweigh imports largely. Namibia’s imports exceed exports by US$ 1.55 billion. The country needs to increase the number of exports to overtake imports from the EU. The trade deficit was wider in 2015 but narrowed down in 2016 and 2017 consecutively.

Future Potential Namibian exports in the EU

It is important to measure Namibian exports into the EU market compared to imports from the rest of the world (including inter-EU trade).  As depicted in the chart below Namibian products only reach a small segment of the European market. The core reason is that inter EU trade is very high which only leaves little room for imports from other countries to occupy in the EU territories.

On one hand Namibia can draw analysis to identify lucrative sectors for export into the EU market, for example the Namibian diamonds reach 8% of the EU market meaning there is huge demand for diamonds in the EU whereby our market is too small to fill. Gold only reaches 1%, fish 3%, zinc 4%, copper 3%, grapes 1% and meat 0.2% of the EU market. Thus if more grapes is produced in Namibia there is room to reach a huge potential market at their disposal.

by: Rodney Dan-Ao !Hoaeb

In what was widely regarded as an essential step to transform the Namibian Retail sector, stakeholders recently met in Windhoek to advance plans for a negotiated transformational model for that sector. The stakeholders meeting was facilitated by the Namibia Trade Forum (NTF), an agency of the Ministry of Trade and Industry, with the objective to map out the formation of Task Teams, their terms of references, as well as the guidelines to guide the development of the Namibian Retail Charter.

Extensive sector consultations commenced in 2013 through a broad stakeholder consultative meeting lead by Calle Schlettwein, Minister: Trade and Industry, and a ministerial delegation. This latest meeting aimed to bring together retailers and wholesalers representing the segments food and beverages, clothing and apparels, as well as building and hardware, joined by distributors, organised labour, business associations, and regulators. The aim was to create a platform through which these stakeholders could actively impact the proposed plan and process leading up to the development of the Namibian Retail Charter.

Namibian Retail sector

A recent analysis and research of the Namibian retail sector commissioned by the Namibian Competition Commission, highlighted the continuance of the Namibian economy’s reliance on South Africa. And although significant strides have been made since Namibia’s political independence in 1990, there are still key dependencies on Africa’s economic powerhouse. The analysis pointed out that the influence of South African retailers, relative to Namibian retailers, is in fact expanding. The research states that a key aspect of this regional expansion appears to be the vertical integration of major retailers into their own distribution operations. This backward integrated operation, together with their retail supermarkets, is then introduced into the region. This means that the major retailers often control their own distribution operations. This strategy, the study points out, is potentially to the detriment of local Namibian suppliers, producers and manufacturers.

4th National Development Plan (NDP4)

NDP4 sets the framework for transforming Namibia’s retail sector; it mandates the Ministry of Trade and Industry to initiate growth in the manufacturing sector. Subsequently Namibia’s principal national development plan, has identified a need to diversify locally produced commodities, as well as to increase their shelving and availability in the local retail market. The proposed Namibian Retail Charter seeks to create a suitable climate for local contributions to the retail sector’s supply chain as well as to facilitate job creation amongst other growth targets. Lapitomhinda Hashingola, Liaison Officer at NTF, says this will best be achieved through a meaningful dialogue and closer cooperation between the public and private sector. “We are an agency of the Ministry of Trade and Industry. And as such we were mandated to lead the development of the Namibian Retail Charter and to support the process through our Secretariat,” says Hashingola.

Namibian Retail Charter

He emphasises the Namibian Retail Charter alignment with the Ministry of Trade and Industries’ “Growth at Home Strategy/Industrial Policy”, and NDP4. The “Growth at Home Strategy” aims to transform the broader Namibian economy and explicitly designates the development of a retail charter as a key priority action.

In recent years, despite various initiatives, such as the listing agreement between the Namibia Manufacturers Association (NMA) and retailers, local enterprises still face many barriers in listing their products. Hashingola explains that, “Our objective is thus to facilitate the development of a Namibian Retail Charter so as to enable locally produced goods to get greater shelving.” It was agreed that the development be based on broad sector consultations and with focus on challenges such as merchandising Namibian products, minimum local procurement requirements, transparency and fairness, local accounting offices, supplier development programmes, and a clear monitoring system. Appointment to the Task Teams is voluntarily and is based on retail activity in the Namibian economy.

“The Namibian Retail Charter is a voluntary measure, but with binding targets which will help us achieve the transformation we seek,” says Hashingola. It however remains the prerogative of the Ministry of Trade and Industry to implement legal instruments should the “voluntary” route fail to realise the desired aim within a feasible time frame. Hashingola says:”We thus need the retailers’ visible support and active participation in this. Retailers who support Government are fine; and of these we have plenty good examples. Those who don’t, are missing an opportunity to cooperate.”

The Project plan sets the launching of the negotiation phase for October 2014 as well as regular meetings of the Task Teams. Upon completion and sign-off by the signatories in the third quarter of 2015, the Namibian Retail Charter will then be applicable across Namibia. The charter will be reviewed by end 2017 and its requirements are expected to cease at the end of 2030.