Namibia-EU cooperation

Helping to redress the imbalances

by Roger Leenders

The Republic of Namibia gained its independence in March 1990 and its constitution is considered to be one of the most democratic in the history of Africa south of the Sahara. The country became, in December of the same year, the 69th ACP State when it signed the Lomonvention. Namibia has a very low population density-its estimated 1.5 million inhabitants are scattered across a vast territory of 825 000 square kiLomes, of which only 42% is usable for agricultural purposes.

When one looks at the per capita income figures, Namibia does not appear to be a particularly poor country. From recent data, GNP per head is estimated at between US$1300 and US$1500. However, the distribution of income and wealth is extremely uneven. The population of certain parts of the country ranks among the poorest on the continent while a small percentage of the inhabitants can be classified among the richest in the world.

Since independence, the Government has adopted a policy of reconciliation and affirmative action. This entails attempting, on the one hand, to favour the previously disadvantaged sections of the population while, on the other, seeking to create a more harmonious multi-racial society. By and large, the approach has been pragmatic, building on good things from the past and making development benefits available to a larger part of the population.

The economic base of Namibia is somewhat limited. Mining, although in decline, remains an important source of revenue while fishing has gained in importance in the five years since independence. Tourism is also a sector now recognised as having good potential for development, especially in the field of job creation. The private sector is relatively strong - certainly in comparison to most other African countries.

Namibia's external debt amounts only to about US$130 million and it is Government policy to maintain the debt -and hence the servicing commitment- at a very low level.

EC support in the early days

Prior to independence, Namibia received assistance from the European Commission through various budget lines, with most of the aid being channelled through non-governmental organisations. The United Nations Institute for Namibia (UNIN), located in Lusaka, Zambia, also received substantial financial support.

Although the country joined the Lomystem in December 1990, the first National Indicative Programme was not signed until March 1992. In order to assist Namibia before the financial resources allocated under LomV could be utilised, the European Commission, exceptionally, made some ECU 33.5 million available under separate budget lines, during 1991 and 1992. These funds were mobilised in support of 53 different projects.

LomV

Under the first financial protocol of the Convention, ECU 50m has been made available to Namibia for programmable assistance in the form of grants (the National Indicative Programme). Agreement was subsequently reached between the Government and the Commission to concentrate this funding on three focal sectors: agriculture and rural development (40% of the total), health (30%) and education/human resources (20%). The remaining 10% was to be made available for activities outwith these sectors.

By May 1995, ECU 30.9m of the NIP had been allocated to projects while new financing proposals to the tune of ECU 16.8m had been submitted to the Commission. This means that, by the end of the year, it is anticipated that 95% of Namibia's financial envelope will have been committed.

The country has also received various forms of non-programmable aid. In March 1993, the Commission approved a grant of ECU 40m under the Sysmin facility. The programme financed with these funds, which consists of a portfolio of 12 projects, aims at reversing the unfavourable trends experienced by the mining sector in recent years. It will contribute to:

-safeguarding production and the eaming capacity of the sector;
- broadening the production base, through diversification and integration of the mining sector into the wider economy;
-improving the geological and mineral data base, and;
-expanding training facilities

By May 1995, 44% of the allocation had been committed.

Within the framework of regional cooperation between the European Community and the SADC member states, Namibia benefits from support in a number of areas, including the development of trade and services, the establishment of sea fisheries inspectorates, the creation of a regional marine data base and customs training. In the field of transport, Namibia also has a particular interest in the regional support provided for the Trans - Caprivi Highway.

Another significant element of non-programmable assistance under LomV is to be found in the Beef Protocol. When Namibia joined the Convention, it was granted a quota for export to the EU market of 60 000t of deboned beef over the period 1991-1995. In 1994, the country exported almost 11 000t to the Union, valued at some N$216m, under this arrangement. Since 1994, Namibia has also had access to an import quota for seedless grapes. For the period December 1994-January 1995 the Commission granted a duty-free concession of 400 tonnes and a further reference quantity of 100 tonnes was provided for February-March 1995.

European Community financial support to Namibia

Cooperation outside the Convention

The Lomonvention is not the only source of financial and other support made available to Namibia by the European Community. The country has been the recipient of food aid in the shape of 15000 tone" of cereals, 427 tonnes of beans and 267 tonnes of dried fish. The counterpart funds generated from the domestic sale of two thirds of the cereals supplied amounted to N$4.4m. By May 1995, 82% of these funds had been spent on 20 projects at the request of the National Authorising Officer.

In the area of support for non-governmental organisations, the Commission has co-financed more than 40 projects since independence with a financial commitment of ECU 3.6m. Support and technical assistance have also been provided to the Ministry of Health and Social Services in the context of the Community's AIDS/STD Control Programme. In 1993, emergeny aid was supplied in the shape of financial support for the drilling of 20 boreholes in the former Namaland region. This region was badly affected by the drought of 1992/93. A total of ECU 1.9m has been spent on a range of projects under other European Community budget lines covering nature conservation, human rights and democray and rehabilitation in Southern Africa.

Finally, the European Investment Bank has approved four loans at preferential interest rates for investments in Namibia. The total sum involved here is ECU 22.5m of which ECU 17m comes from the bank's own resources (with an interest bonus of ECU 3.2m financed by the EDF). The remaining ECU 5.5m has been provided as risk capital, supplied by the EDF and managed by the EIB.