Mar 01

Namibia, Botswana and beyond: Assessing Free Movement Economic Benefits, Challenges

By Josef Kefas Sheehama

The Government Republic of Namibia and the Government Republic of Botswana have launched the use of national identity cards as travel documents. This agreement has been seen as a significant milestone in the relationship between the two nations.

Both Namibia and Botswana are among the safest countries in Africa. The Kalahari covers a sizable chunk of territory in Botswana as well, however the Namib dunes are absent. Savannahs, wetlands, deserts, and salt pans are among the much larger diversity of landscapes that it has. Both countries have huge world-famous tourist attractions, but I think Namibia has more diversity. Namibia not only has world-class wildlife parks, but also Tiras Mountains, Spitzkoppe, Fish River Canyon and Skeleton Coast. And don’t forget Swakopmund has beaches and plenty of adventure activities.

Furthermore, Namibia and Botswana once had a border dispute in 1992 because of the uninhabited Sedudu island. In December 1999, the World Court’s judges declared that Botswana was the rightful owner of the island, according to Wikipedia. In terms of infrastructure, Namibia is slightly ahead of Botswana as the roads are better, there are more restaurants, supermarkets, hotels, and hostels. Therefore, both Namibia to Botswana offers a greater variety of activities and, more importantly, is much easier and more enjoyable to travel independently. The signed agreement is expected to bring about significant progress in the development of both Namibia and Botswana, as they work together to achieve their mutual goals.

It is beyond any doubt that the launched of national identity cards as travel documents implied a very important step forward in the long process towards regional integration, not only when seen from an economic point of view, but also politically. The potential benefits of increased movement between Namibia and Botswana cannot be overstated. What is more, free movement between these two states can attenuate some of the major challenges that Namibia and Botswana labour markets face.

It can plug skills gaps, while enabling them to fix skills mismatches in their labour markets. With more people able to move freely, business can much more easily find the necessary talent and skills that they need; this is critical to driving productivity which, in turn, has an impact on the economic growth. Namibian President Geingob says the move is a key step toward integration among countries of the Southern African Development Conference (SADC), and ultimately the entire continent. The Botswana President, Mokgweetsi Masisi said introducing the use of identity documents for travel is necessary to foster unity between the two neighbours and other southern African states. Furthermore, President Masisi revealed that the authorization of the use of national identity documents to cross national borders, is a clear demonstration to foster social cohesion among citizens, as well as enhance regional cooperation and integration”.

Moreover, despite the benefits, free movement brings its own challenges. The fears over possible job losses and dampening of wages for local workers. In addition, while remittances are of significant benefit to country of origin, concerns over brain drain and the consequent loss of working-age individuals persist. The potential increase of violent incidents driven by xenophobia as well as the countries’ mounting security threats such as Botswana adopted the shoot-to-kill strategy in 2013 as a measure to curb the mass slaughter of wildlife in the country. The cases of Tommy Nchindo, Martin Nchindo, Wamunyima Nchindo and Sinvula Munyeme should be reconciled. Therefore, the security challenges cannot be addressed in isolation, but as the result of a collective effort.

Going forward, the Gross Domestic Product (GDP) in Botswana was worth 17.61 billion USD in 2021, according to the World Bank. Furthermore, the Gross Domestic Product (GDP) in Namibia was worth 12.31 billion US dollars in 2021. In 2020, Namibia exported $498M to Botswana whilst Botswana exported $64.9M to Namibia. Therefore, the last 20 years the exports of Botswana to Namibia have increased at an annualized rate of 12.9%, from $5.7M in 2000 to $64.9M in 2020. For Namibia, a country that aspires to become an industrialized, prosperous, and economically competitive by 2030, there is a need to consider the contribution of free movement between these states. We cannot overrule a competitive advantage between Namibia and Botswana. Hence, in an economic model, a comparative advantage over others in producing a particular good if they can produce that good at a lower relative opportunity cost, at a lower relative marginal cost prior to trade.

It is important to note that the free movement amongst Africans will significantly increase intra-African trade. These developments will indeed have important implications for the competitiveness and growth prospects of the African market. The African Continental Free Trade Area Agreement is the first step to realize the free movement. The implementation of the African Continental Free Trade Area Agreement (AfCFTA) viewed as catalysts for long-term continental prosperity and integration. The adoption for national ID’s shows that the highly knowledgeable on the role of integrating free movement in Africa for economic development that include, enhancing currency stability, reduction of financial risks, reduction of transaction cost, reduction of exchange rate fluctuation, enhancing price transparency and reduction of inflation that impact on trade within the region.

The reduced barriers to cross-border trade and investment are likely to encourage more and more small and medium-sized companies which have traditionally been active only in the domestic market to enter the markets of the neighbouring countries. These microeconomic factors are likely to contribute to improved competition and resource allocation within the Africa market. We need to trade among ourselves. Movements of capital and goods go together. The importance of a free movement is highlighted in the African Union decision’s to consider it for the entire continent. This is because a free trade will aid the realization of the objectives of AfCFTA. There is a need to put into place a mechanism of implementing the free trade integration in all 54 states.

To that end, it requires plenty of energy, patience and political leadership. It goes hand in hand with various doubts, disagreements and setbacks. However, the objectives of the integration, the improvement of competitiveness and greater prosperity not only between Namibia and Botswana, but in Africa, as well as joint control over the domination of market forces.

As a longer-term vision, one should see African integration as a step towards better global co-operation and securing peaceful and balanced development.

Therefore, the foundations for achieving continental monetary policy harmonization leading to a free trade and the smooth implementation of the African Continental Free Trade Area.