Assessing the usage of infant industry protection policy in selected manufacturing industries of the Namibian economy.

Abstract

As part of its Industrial Development Policy, Namibia has made use of an Infant Industry Protection (IIP) policy to protect what are deemed as infant industries. This study investigated how effective the use of this policy has been in the Namibian manufacturing sector, specifically the Pasta and Dairy industries. The main objectives of this study are twofold: firstly, to establish whether IIP has been effective in assisting protected industries to develop and grow; and secondly, to determine whether IIP has been effective in protecting the Pasta and Dairy industries from foreign competitors. Ever since Namibia implemented IIP, no comprehensive assessment has been conducted to evaluate its effectiveness. While this study is perceived to be a pioneering attempt in this regard, its significant reliance on various theoretical literature and previous case studies of industries where IIP has been implemented has to be acknowledged. The thesis utilized both quantitative and qualitative analysis methods to achieve its objective. The quantitative analysis utilized sample data on four impact variables, namely output, exports, imports and number of jobs created. On the other hand, the data used for qualitative analysis was collected through structured interviews with experts from various public and private sector organisations located in Windhoek. The study found that the implementation of the IIP policy has resulted in increased output, exports, and job creation in both the Pasta and Dairy industries. The results also suggest that while IIP has curtailed competitive imports in the Pasta Industry, it has not succeeded to do so in the Dairy industry. On this basis, the study inferred that the policy was ineffective in reducing competitive imports in the Dairy industry. On the basis of the quantitative and qualitative findings, the overall conclusion of the study is that the IIP policy has helped both industries to develop but came short of curbing imports in the Dairy industry. In this light, it is recommended that stronger measures be instituted to improve the effectiveness of IIP in Namibia, particularly with regard to promoting import substitution.