Thesis (MBA)--University of Stellenbosch, 2010. / Since gaining independence in 1990, Namibia has enjoyed a fairly stable economic
performance, but its heavy reliance on its natural resources, especially its mineral resources,
is at times worrisome. Historically, the country has depended primarily on diamond exports as
a major source of foreign exchange earnings and state revenue. The contribution of diamond
mining to government revenue has over the years declined from a high of N$1493 million in
2002 to the levels of N$821 million in 2007. Similarly, the contribution of diamond mining to
the Gross Domestic Product has decline marginally from N$4.59 billion (16.9 percent) in 2006
to N$3.56 billion (13.1 percent) in 2007 respectively. It is evident that there has been a
steady, but progressive decline in the proportional contribution of diamonds to the national
income in relation to the other sectors of the economy. This decline can however not be
directly attributed to a corresponding decline in the diamond production output, but perhaps
due to a decline in diamond demand and lower prices.
Based on the fact that diamond production and expansion thereof to offshore operations in
particular will continue for years to come and still make significant contribution to the Namibia
economy, this study attempts to formulate value addition strategies that could lead to the
optimisation of the Namibia diamond economy potential, especially local benefication, as well
as increased international competitiveness within the established world diamond markets. To
this end, it evaluates the intricate supply and demand patterns in the world diamond market to
understand how Namibia could position itself. The study found that there is a clear case for
local diamond benefication as an economic imperative and that it is a feasible proposition.
However, it must be approached cautiously and within a clearly defined and structured
framework.
It is recommended that Namibia should pursue the benefication of her unique gem quality
diamonds in conjunction with external manufacturing experts and marketers in order to secure
a bigger stake in the global diamond pipeline. To this end the government needs to formulate
clear incentive strategies and packages for investors and also open the playing field for local
manufacturers, without compromising existing relations and revenue streams. Furthermore, it
is suggested that Namibia strive to maintain an amicable balance between rough exports and
local benefication, whilst expanding the regulatory and enabling environment. Other
proposals that will support local benefication and competitiveness of the Namibian diamond
economy are diamond branding and marketing through already existing diamond marketing
pioneers such as DTC International. Finally, Namibia needs to embark upon strategies to
urgently increase its skills base and improve the productivity of its labour force in order to
achieve the vision of a flourishing diamond benefication sector.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/8582 |
| Date | 03 1900 |
| Creators | Gawanab, Alex Clive |
| Contributors | Thomas, Wolfgang, University of Stellenbosch. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : University of Stellenbosch |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Rights | University of Stellenbosch |
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