World Maritime University The Maritime Commons: Digital Repository of the World Maritime University World Maritime University Dissertations Dissertations 1989 The significance of maritime development to the economy of Namibia Shihaleni Ellis Ndjaba WMU Follow this and additional works at: https://commons.wmu.se/all_dissertations Recommended Citation Ndjaba, Shihaleni Ellis, "The significance of maritime development to the economy of Namibia" (1989). World Maritime University Dissertations. 855. https://commons.wmu.se/all_dissertations/855 This Dissertation is brought to you courtesy of Maritime Commons. Open Access items may be downloaded for non- commercial, fair use academic purposes. No items may be hosted on another server or web site without express written permission from the World Maritime University. For more information, please contact [email protected]. WORLD MAR I 1* I ME UNIVERSITY MALMO SWEDEN THE SIGNIFICANCE OF MARITIME DEVELOPMENT TO THE ECONOMY OF NAMIBIA: Economic Framework for Maritime Development in independent Namibia By SHIHALENI ELLIS NDJAB^ NAMIBIA A paper submitted to the Faculty of the World Maritime University in partial satisfaction of the requirements for the award of a MASTER OE SCIENCE DEGREE in GENERAL MARITIME ADMINISTRATION The contents of this paper reflect my’ personal views and are not necessarily endorsed by the University. Signature; Date: ^ Supervised and assessed by: Professor J.MLYNARCZYK World Maritime University Co-assessed by : Professor El.A. GEORGANDOPOULOS Visiting Professor World Maritime University TO My wife.Hileni NDJABA _ affectionately Mekondjo _whose sustaining Love,encouragement and moral support have been a source of strength and inspiration for me during the arduous and demanding years of my studies in Sweden. ACKNOWLEDGEMENTS I should like to thank SWAPO of Namibia for kindly nominating me for this scholarship. My gratitude,also goes to the U.N.Institute for Namibia (UNIN) authorities, particularly the library staff, for their kind help and co_operation during my research phase. I am enormously grateful to Professor J.MLYNARCZYK,WMU, who helped me throughout my work. I am equally grateful to Professor El. A. Georgandopoulos, for his very useful comments and suggestions to my work . This section will be incomplete without expressing my deep appreciation and thanks to my wife Hil'eni Mekondjo NDJABA, for her all round support during my studies, and more so , for bearing with my long absence. Finally I would like to thank my fellow students, lecturers and Professors at the WMU,for their varying help in the daily course of events. I KEY FACTS ON NAMIBIA LOCATION: South western corner of Africa. NEIGHBOURS: South Africa on the South, Botswana and Zambia on the East, Affgola on the North and the Atlantic Ocean on the west. SIZE; 823 629 sq km. POPULATION;1.5 Million. POLITICAL STATUS: Under South African illegal colonial occupation (NB.Now on way to independence through U.N.'supcrvised elections due in November 1989) CURRENCY; South African Rand(R). Exchange Rate; R2.67 per US Dollar(August 1989). Ports; Halvis Bay and Luderitz Bay GOP; R200Q Million (1983) TABLE OF CONTENTS Page Acknowledgements Key facts on Namibia PREFACE...................................................... i Chapter I STRUCTURAL CHARACTERISTICS OF THE NAMIBIAN ECONOMY...................................................... 1 1.1. Mining......................................3 1.2. Agriculture................................ 8 1.3. 'Fisheries................................. 10 1.4. Industry.................................. 15 1.5. External Trade............................17 Conclusions and Recommendations..........18 Chapter II EXISTING VARIOUS MODES OF TRANSPORT IN NAMIBIA: Their bearing on the economy and interaction with each other ................. 21 2.1. Maritime Transport and Shipping......... 22 2.2. Rai Iways.................................. 24 2.3. Roads......................................25 2.4. Air Transport.............................26 Conclusions and Recommendations......... 27 Chapter III GENERAL OBJECTIVES AND CONSIDERATIONS FOR INVESTMENT IN SHIPPING IN INDEPENDENT NAMIBIA...........30 3.1. Background........................ ................. 30 3.2 Institutional arrangements in shipping............ 34 3.2.1. Liner shipping...........................34 3.2.2. Bulk shipping............................35 3.3. Political and strategic considerations........... 36 3.3.1. Political andEconomic Independence... 36 3.4. Economic considerations.............................38 3.4.1. Balance of Payments..................38 3.4.1. Export Promotion....... 40 3.4.3. Influence in the Liner Conference...42 3.4.4. Economic Integration.................46 3.4.5. Employment............................46 3.5. Negative Factors in shipping development in Namibia . 3.5.1. Lack of skills....................... 48 3.5.2. Lack of investment capital.......... 48 3.5.3. Shipping is a risky business........ 49 3.5.4. Open registries and subsidies....... 49 Conclusion................................................. Chapter IV A CLOSE LOOK AT WALVIS BAY : Namibia's main gateway to sea Trade..................................... 52 4.1. The legal status of Walvis Bay....... 52 4.2. The Economic importance of Walvis Bay......................................55 4.3. Economic Activities.................... 62 4.4. The Port................................ 65 Conclusions and Recommendations....... 70 Chapter V SUGGESTIONS FOR ESTABLISHMENT AND DEVELOPMENT OF MARITIME AFFAIRS IN INDEPENDENT NAMIBIA...... 73 PART A: Establishment of a Maritime Administration..... 73 1. Merchant shipping legislation .......... 73 2. Maritime Administration......... 74 3. Membership to the IMO.................... 76 PART B: Establishment and development of a national f 1 eet...................................................... 1.1. Acquisition methods...................... 79 1.2. Shipping Investment Finance............ 81 1.3. Measures for assisting the shipping Industry...... 82 1.3.1. Financial measures.... *............. 83 1.3.2. Administrative measures..............85 1.4. Co-operation and Joint ventures beyond national boarders......................... *88 PART C Maritime Education and Training............ 91 PART D Development of Ancillary services...... 93 1.1. Ship repair services................... 93 1.2. Finance/Bank services..................95 1.3. Marine Insurance services............. 96 1.4. Port services...........................96 Conclusion.............................. 98 Footnotes^............................................. gg t Bibliography........................................ 103 Appendices............................................. 105 PREFACE Namibia is just a heartbeat away from becoming an independent state, after decades of South African colonial rule. As South Africa ruled Namibia as if it was one of its provinces there has been no good atmosphere for the proper development of local institutions. The Maritime Sector is one of the hard hit victims of such a policy. There is no Maritime Administration in Namibia. The South African Merchant Shipping Legislation is extended to Namibia as well, and the Maritime Administration functions in Namibia are performed by the South African authorities. Namibia has no Merchant Marine fleet. The ports are run directly from South Africa. Upon independence a lot will stand to be done in this" sector. There will be an urgent need to introduce a Merchant Shipping Legislation to govern the maritime activities in the country. It will also be necessary to introduce a Maritime Administration, to carry out the functions embodied in the Merchant Shipping Legislation, such as ship registration, certification of officers, prevention of pollution of the sea by oil, implementation of International Conventions, for example MARPOL,and a score of others. As the country's economy is such export oriented, there would also be a great need for the establishment of a merchant marine fleet to participate in the transportation of such exports, thereby saving the scarce and badly needed foreign exchange resources, which would otherwise be drained out of the country in payment for such services. 1 The existing trade pat terns,*whereby most of the country's trade is channeled via South Africa will have to be changed after independence. The new economic order to emerge in an independent and free Namibia will be accompanied by increased demand for consumer goods, because, as the apartheid and all racial policies are done away with and all the people will be treated equally economically, all the Namibian people will have equal access to their wealth, unlike now when only a handful portion of the population takes the lion's share. This would, in turn, give rise to increased imports volume. Furthermore, Namibia will have the opportunity to extend its hinterland to the landlocked countries surrounding it, such as Botswana, Zimbabwe, Zambia, etc. All these factors will give rise to demand for shipping services, particularly port facilities and physical infrastructure. Namibia will thus, virtually, start from scratch, in most of the sub-sectors of the maritime sector. This study finds its justification and rationale from the foregoing background. It attempts to see the existing situation in Namibia and sets forth some proposals, which might be of some relevance and use to the new Namibian government for the development of this economically important sector. It should be noted here that the study is