By Hasekiel Johannes
Towards the end of the year, I was fortunate to be part of the Ministerial Regional Business Engagement (MRBE) hosted by the Ministry of International Relations and Trade (MIRT).
The engagements took place across Outapi (Omusati Region), Oshana (Oshakati), Otjikoto (Omuthiya), and Ohangwena (Eenhana).
This initiative, led by the Honourable Minister of MIRT, Hon. Selma Musavyi, was a bold and commendable step towards grounding trade and investment policy in the lived realities of businesses at regional level.
A key highlight from the engagements was the recognition that Namibia’s international trade orientation is increasingly shifting towards the African Continental Free Trade Area (AfCFTA).
This shift is strategically sound. AfCFTA represents a market of over 1.4 billion people, with a combined GDP exceeding US$3.4 trillion, making it the largest free trade area in the world by number of participating countries.
According to the World Bank, effective implementation of AfCFTA could boost Africa’s income by US$450 billion by 2035 and lift 30–50 million people out of extreme poverty, largely through trade-led industrialisation and MSME participation.
However, while AfCFTA presents significant opportunities, it also exposes deep structural weaknesses within Namibia’s micro, small, and medium enterprise (MSME) ecosystem.
Across the regions visited, several recurring issues emerged. Access to finance remains a persistent challenge, particularly for enterprises seeking to scale beyond survival-level operations.
This is especially concerning given that MSMEs account for an estimated 70–90% of businesses in Namibia and contribute approximately 30–40% of GDP, yet receive a disproportionately small share of formal credit.
In contrast, MSMEs in countries such as South Africa, Kenya, and Morocco benefit from more developed export finance institutions, aggregation platforms, and supplier development programmes.
Managing Competition From Angolan Businesses: A Market Failure, Not a Trade Problem
Businesses from Angola, particularly in northern Namibia, are increasingly outcompeting local MSMEs due to lower prices, stronger economies of scale, and better access to bulk procurement channels and cross-border supply networks.
This competition, while consistent with AfCFTA principles, highlights a structural asymmetry rather than unfair trade.
The challenge is not the presence of Angolan traders, but the absence of formalised channels through which Namibian MSMEs can compete on equal footing.
Without intervention, this imbalance risks becoming a time bomb undermining local enterprise capacity, hollowing out domestic markets, and increasing dependency on informal imports.
A practical solution lies in establishing formal aggregation, bulk procurement, and structured trading platforms. Government, through MIRT and relevant agencies, should facilitate mechanisms allowing Namibian traders and cooperatives to buy in bulk, access trade finance, coordinate logistics, and distribute competitively priced goods locally. This approach strengthens competitiveness without violating AfCFTA rules or resorting to protectionism.
AfCFTA in a Changing Global Trade Order
Namibia’s AfCFTA strategy must also be understood within shifting global trade dynamics. The global trading system is increasingly fragmented. G20 economies are recalibrating supply chains, prioritising strategic autonomy, and quietly deploying industrial policy and subsidies often at odds with the free-market principles they promote externally.
Western markets are becoming more regulated, more protectionist, and more difficult for small exporters to penetrate due to stringent standards, carbon border measures, and compliance costs.
At the same time, Africa and Asia are emerging as the fastest-growing demand centres, with South-South trade expanding more rapidly than traditional North–South flows.
China has become Africa’s largest trading partner, while India, ASEAN, and the Middle East are deepening commercial engagement across the continent. These markets increasingly favour long-term supply relationships, competitive pricing, and reliable volumes areas where well-supported MSMEs can thrive if properly organised.
In this context, Namibia must recognise the strategic importance of emerging markets and pursue trade engagement that is pragmatic, discreet, and commercially focused.
Quietly negotiating bilateral and plurilateral arrangements particularly around standards recognition, logistics cooperation, and market access can complement AfCFTA implementation without undermining multilateral commitments. Such “quiet diplomacy” allows Namibia to secure tangible market opportunities while avoiding the political and commercial risks associated with overt trade confrontation.
The Risk of Becoming a Distribution Market
Without domestic industrial strengthening, Namibia risks becoming a distribution and consumption market importing finished goods from Africa and Asia while exporting primarily raw materials.
This risk is amplified by AfCFTA if MSMEs are not equipped to move up the value chain. Intra-African trade currently accounts for only 15–18% of total African trade, compared to over 60% in Europe, underscoring how much value addition remains unrealised within the continent.
There is also a lack of targeted and streamlined support programmes for MSMEs, particularly those with export potential, and the current tax regime is not always conducive to growth.
Early-stage enterprises face high upfront tax and compliance burdens just as they attempt to formalise, invest, and enter regional markets.
A Tax Regime That Supports Competitiveness While Remaining Compliant
While Namibia must adhere to international trade and tax rules, global practice shows that compliance and competitiveness are not mutually exclusive.
Many G20 and emerging economies quietly apply graduated tax regimes, targeted export incentives, accelerated depreciation, and time-bound relief measures to support domestic enterprises often within the bounds of international agreements.
Namibia should similarly recalibrate its tax approach to support MSMEs during critical growth phases, without undermining its international obligations. Strategic flexibilityrather than rigid uniformity is essential in an increasingly competitive global environment.
Beyond Investment Attraction: Building Export Capability
While the Investment Bill is an important instrument, it does not sufficiently articulate how MSMEs will benefit from investment inflows. International evidence shows that without explicit localisation and supplier development frameworks, less than 20% of foreign direct investment linkages reach domestic MSMEs.
The absence of a well-resourced Export Development Programme remains a critical gap. In a world of shifting trade alliances and intensifying competition, export readiness is not optional. Countries that have successfully integrated MSMEs into global and regional trade have done so through export credit agencies, aggregation mechanisms, matching grants, and structured market-entry support tools Namibia has yet to deploy at scale.
To address these challenges, government should urgently develop sector-specific, export-led MSME programmes in areas of comparative advantage such as agro-processing, mining supply chains, manufacturing inputs, and green products. These programmes should include export readiness assessments, standards compliance, certification support, buyer linkages, and aggregation platforms that enable scale.
The success of MSME development ultimately depends on strong coordination between MIRT, the Ministry of International Relations and Trade, and other economic institutions. Investment attraction must be aligned with MSME development priorities, linking local enterprises to regional and global value chains.
AfCFTA offers Namibia a historic opportunity but only if MSMEs are placed at the centre of the country’s trade, investment, and global positioning strategy. In a world of shifting alliances and emerging markets, Namibia’s cautious, preparedness-first approach is not protectionist it is strategically sound. Investment without inclusion will not deliver sustainable development. What is required now is intentional, export-led, and well-resourced MSME programming that enables Namibia to compete—quietly, confidently, and sustainably within Africa and beyond.
