Namibia and South Africa are set to launch transport infrastructure projects worth over $377 million over the next three years to address current rail and port inadequacies.
The news was made public when the Namibian Executive Director for the Ministry of Finance and Public Enterprises, Titus Ndove told CNBC Africa that his office was preparing an initial R2bn for the project which aims to link the two nations and other parts of South Africa.
- “We are elevating our bi-national arrangements with the government and [we have identified] different areas of collaborations ranging from tourism, border protection, water issues, trade facilities and seeking ways to go hunt together for more markets,” Ndove said
South African economy barely escaped a recession last year due to transport inadequacies and a severe shortage of power supply.
The two challenges severely constrained the South African economy last year dragging it to almost a recession.
In response, the South African government roped in the private sector to improve efficiencies at its ports and improve its rail network.
Recommended reading: South Africa to open rail sector to private companies
Speaking at the second annual Ninety-one Infrastructure Forum, Mr Ndove told delegates that it was vital South Africa resolve its logistics and port crisis by investing in Key infrastructure.
- “Most of our goods- about 70% of them coming from South Africa- move on the road and that has complications in the form of high maintenance costs for the roads. Sometimes we transport dangerous goods, which ideally, we want to get them off the road and carry on the rail.”
Mr Ndove’s call was backed by Helvi Fillipus, a senior government adviser who explained that Namibia was specifically targeting rail infrastructure investments to help ease existing pressure.
- “We are looking at the rail infrastructure because current ones are outdated and aged and therefore need to be upgraded. In addition, we have an ambition as a country to position Namibia as a logistics hub in the Southern Africa region, and specifically, we are targeting to provide services to our landlocked neighbours,” she said.
- “We need to stabilize the system so that we can move heavier cargo on the rail. We also need to increase the speed at which the trains can move because at the moment it takes a longer to get the goods from one point to another.” At the conference, Namibia presented several infrastructure projects ranging from energy, rail, port expansion and green hydrogen to oil and gas.
What you should know
- South Africa is Namibia’s largest trading partner and both countries are members of the South African Customs Union, the world’s oldest customs union.
- According to the Observatory of Economic Complexity (OEC In 2022, Namibia exported $1.75B to South Africa. The main products that Namibia exported to South Africa are Gold ($860M), Special Purpose Ships ($356M), and Beer ($65.8M).
- According to the OEC, In 2022, South Africa exported $3.3B to Namibia. The main products that South Africa exported to Namibia were Delivery Trucks ($171M), Cars ($94M), and Electricity ($93.3M).
- In the last 22 years, Namibian exports to South Africa have increased at an annualized rate of 9.13%, from $256M in 2000 to $1.75B in 2022. South African exports to Namibia have increased at an annualized rate of 4.71%, from $1.2B in 2000 to $3.3B in 2022.
