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Namibia: Communication industry threatened by EPA talks

Namibia Economist (Windhoek)

13 July 2007

Namibia: Communication Industry Threatened By EPA Talks

Desie Heita

Fuel is being added to the already troubled negotiations on the anticipated Economic Partnership Agreement (EPA) with the European Union.

The Economist can reveal that doubts already exist on whether Namibia will meet the December deadline to sign the agreement.

It has also emerged that the country’s lucrative communication industry may face severe consequences if negotiators fail to push far enough for the sector during the current negotiations with the EU. Unlike with the Cotonou Agreement, the EPA will be reciprocal, meaning Namibia will be obliged to open up its market to European products and services. And communication and transport are Europe’s forte, and thus the concerns by the permanent secretary of the Ministry of Works, Transport and Communication, Shihaleni Ndjaba, over the inclusion of the New Generations clause into the final and binding EPA agreement.

"It is expected that this will brings about ’the liberalisation’ especially on our communication and air transport sectors," said Ndjaba at a media briefing. Between 2004 and 2006, government made more than N$200 million in dividends alone from fixed telecommunication lines, provision of bulk communication infrastructures, and on mobile phone services. Liberalising the sector may poke a hole to its bulging purse.

EU Ambassador to Namibia, Elizabeth Pape, in response to the concerns, said "more competition in such areas [of communication and air transport] will be good to investors." Namibia is also worried that the inclusion of a New Generation clause may hamper the country’s expansion programme into SADC market. Namibia’s Telecom has already made inroad into Angola, thanks to the strong base at home. The New Generations clause includes issues of e-commerce, competition, innovation and intellectual property, public procurement, environment, and good governance.

Another serious issue is the preferential treatment extended to South Africa under a refined Trade, Development and Cooperation Agreement. Pape said the EU is doing this because of South Africa’s bigger market and is more competitive than other SADC countries. To Namibia, this poses a threat and may bring about some limitations, said Andrew Ndishishi, the permanent secretary of the Ministry of Trade and Industry.

The threat will be the flooding of Namibian market with European products, especially dairy products such as cheese. Namibia is already seeing more of these products coming in through South Africa. "How would we control the movements of products?" Ndishishi pondered. A limitation may lie within the rules of origin and its effect on Namibia’s intentions to establish a manufacturing sector. Ndishishi says the country would not be in position to manufacture something of which a component’s raw material did not come from South Africa.