By Gabriel Haulyamayi
The 9th SACU Summit in Cape Town offered ambitious rhetoric about regional industrialisation, but for Namibia, the gap between promise and reality has never been wider.
When President Cyril Ramaphosa declared at the 9th SACU Summit on 26 June 2026 that “we choose industrialisation over dependence,” the sentiment resonated across the Cape Town International Convention Centre.
Yet for Namibian policymakers, the statement carried sharp irony. How does a nation industrialise within a customs union that structurally reinforces its role as a consumer of finished goods and supplier of raw materials?
The Policy Dilemma: A Union Built for Another Era
From a policy analyst’s perspective, SACU remains the world’s oldest customs union, established in 1910 to serve colonial interests. While the 2002 Agreement democratised decision-making, its architecture still privileges South Africa as the industrial core.
The SACU Strategic Plan (2022–2027) identifies regional value chains in agro-processing, textiles and cosmetics as priorities, but the mid-term review presented at this year’s Summit offered more process than progress. Article 26 of the SACU Agreement grants Namibia the right to protect infant industries through additional duties, yet this instrument has been woefully underutilised, invoked only for UHT milk and pasta in over two decades.
The Bank of Namibia identifies tiles, steel products, leather goods and processed foods as sectors with genuine manufacturing potential, but without aggressive infant industry protection, these remain unrealised possibilities.
The Economic Trap: Revenue Dependency vs. Industrial Ambition
The economic data tells a sobering story. SACU receipts contribute approximately 27% of Namibia’s total revenue projected at N$24.3 billion in 2026/27. This fiscal dependency creates a perverse disincentive for industrialisation.
The revenue-sharing formula distributes customs duties based on each country’s share of intra-SACU imports. Paradoxically, the more Namibia imports from South Africa, the larger its SACU revenue share. Industrialising and reducing import dependence would shrink the very revenue pool funding the national budget.
The IMF’s 2026 Article IV consultation projects Namibia’s fiscal balance excluding SACU receipts at -13.2% of GDP, revealing an economy that cannot sustain itself without customs union transfers.
Meanwhile, manufacturing contracted by 12.2% in Q1 2026, contributing merely 11% of GDP. SACU revenue itself has proven volatile, falling 22.3% from N$28.1 billion in 2024/25 to N$21.8 billion in 2025/26. An industrialisation strategy built on such unpredictable foundations risks fiscal catastrophe.
The Political Calculus: Sovereignty vs. Solidarity
Politically, Ramaphosa’s re-imagined SACU agenda, cross-border special economic zones, the Trans-Kalahari Railway, and critical minerals beneficiation sounds transformative.
Namibia’s green hydrogen potential, with the 10 billion Hyphen project, offers genuine industrial diversification. Ramaphosa explicitly acknowledged Namibia’s “green hydrogen and uranium processing potential” as assets for a “regional industrial ecosystem.”
But political commentators must ask: who defines the terms? South Africa administers the Common Revenue Pool, its GDP constitutes roughly 90% of SACU output, and its industrial base dwarfs all four smaller members.
The common external tariff is effectively South Africa’s tariff, designed to protect South African manufacturers. When Ramaphosa declares that SACU must become “the premier platform for regional economic resilience,” he speaks from the position of the dominant economy.
For Namibia, resilience may require challenging the terms of a partnership that provides fiscal oxygen while suffocating industrial ambition.
Recommendations: A Three-Pronged Strategy
Namibia must act decisively. First, aggressively invoke Article 26 infant industry protection for strategically selected sectors leather processing, construction materials, and agro-processing rather than continuing the current passive approach. Second, push for SACU revenue formula reform that decouples fiscal transfers from import volumes, replacing it with a development component tied to industrialisation milestones.
Third, leverage the green hydrogen agenda not merely for export revenue but as an anchor for domestic industrialisation demanding local content requirements, supplier development programmes, and technology transfer agreements that build Namibian manufacturing capability. The Trans-Kalahari Railway and Walvis Bay port must be positioned as Namibian industrial corridors, not merely transit routes.
The Summit closed with Ramaphosa’s call: “Its original purpose was to move goods. Its future purpose must be to create opportunity.”
For Namibia, realising that future requires moving beyond SACU revenue dependence and making the difficult sovereign choice to industrialise even if it means demanding more from the union than it has ever given.
*Gabriel Haulyamayi, he is a writer, entrepreneur and commentator on socio-economic development and industrial policy.
