Diamonds dominate Namibia's economy Namibia's economy is heavily dependent on mining, which contributed an average 21.5 per cent annually to GDP in 1991-95. In 1997, revenue from the export of metals was $793 mn, or 56.9 per cent of total export earnings, of which diamonds contributed $552 mn, or 40.6 per cent. But after 80 years of exploitation, the diamond industry is having to face up to a new challenge -- the stones are getting harder to find. Nevertheless, the country remains the world's fifth largest producer of diamonds. The Namibian Chamber of Mines reports that the number of carats per 100 tonnes of gravel fell from almost 7.6 in 1987 to some 2.7 in 1997. Furthermore, inland deposits "could be depleted within the next 10 to 20 years," notes the Bank of Namibia's 1997 annual report. However, the industry is stretching its operations offshore. Today, Namibia is the only country that mines diamonds from the seabed. Some 29,000 carats, or 4 per cent of total diamond output, were recovered offshore in 1990, rising to 623,000 carats, or 44 per cent of total output in 1997. "If the expansion plans of the diamond producers are successful, offshore output is expected to surge to 1.27 mn carats in 1999 and 1.60 mn in 2000," says the Bank of Namibia. Namibia is expected to increase its total diamond production from an estimated 1.4 mn carats in 1997 to 2.2 mn carats a year by 2000, according to the Bank of Namibia. Much of Namibia's diamond trade is in the hands of De Beers, which mines half of the world's diamonds -- in Namibia, Botswana and South Africa -- and in the past controlled up to 80 per cent of the global diamond market, worth around $50 bn in 1997. However, the Russians are encroaching on De Beers' territory in Southern Africa. Looking at the long-term, Russian engineers are preparing to start a $15-20 mn geological hunt for diamonds in Namibia, near the Kalahari Desert, on the Botswana border, and a $150 mn search under the sea, on the continental shelf. Russia's largest producer and exporter of rough diamonds, Alrosa, is planning a major joint-venture investment in undersea mining of diamonds in Namibia.

Other key sectors of the Namibian economy 'Gold' from the sea While mining contributes the greatest share of export revenue, fishing is now the most important foreign exchange earner after diamonds and has enormous potential. The ice-cold waters off the Namibian coast provide some of the world's richest fishing grounds. Species caught include hake, horse mackerel and pilchard, as well as lobster and crab. Since the government established a 200-mile Exclusive Economic Zone in 1990 and controlled illegal over-exploitation by foreign vessels, particularly Spanish fleets, the fishing industry has prospered. Its contribution to GDP increased from 3.9 per cent in 1991 to 7.6 per cent in 1994. The 1995/96 "fish drought," brought about by warm seas, hit the industry and underlined the need for conserving the fish stock for a sustainable fishing industry. However, in good climatic conditions, the industry typically grows at 6 per cent a year. Fish sales make up 30 per cent of Namibia's export income, estimated at $350 mn. But fishing fleets are largely foreign-owned, although this is slowly changing, as they are increasingly being 'Namibianized' through black empowerment and affirmative actions being pursued by the government. Tourism set to grow tremendously With tourism becoming one of the fastest growing industries, investment is high and growth of 10 per cent per year is projected. Tourist arrivals increased by almost 9 per cent, from 461,310 in 1996 to 502,012 in 1997 and European tourists more than doubled in 1993-97. "We estimate that tourism will be the largest contributor to national GDP in six or seven years," says Mr. Hennie Fourrie, Director of Tourism at the Ministry of Environment and Tourism By 2002, tourism will contribute around N$2 bn to GNP, according to Ms. Maria Kapere, the Director of Resource Management in the Ministry. At present 13,000 Namibians are employed directly in the industry and a further 13,000 in support industries.

Agriculture still marked by years of apartheid Perhaps in no other area of economic activity in Namibia is the difference between rich and poor as stark as in farming, a result of the country's colonial and apartheid past. The sector is characterized by unequal access to good land and sharp differences in incomes. Since over 70 per cent of Namibians live in rural areas and are dependent on agriculture -- the sector is by far the single largest employer -- there is widespread poverty and some social and political discontent. A farmer drives her livestock to a water point in Daan Viljoen. beef and mutton production, in both communal and commercial farms, is the mainstay of Namibia's agriculture. Photo: N. Akulkothela / Namibian Ministry of Information and Broadcasting The sector is divided between white commercial farming and black communal farming. Some 4,200 white farmers own 36.2 mn hectares and employ some 36,000 black labourers on farms that average 8,620 hectares. The communal farmers operate on a total of 33.5 mn hectares but support 1.2 million people, or 95 per cent of the farming population. Access to communal land is governed by custom and there are no freehold titles. It is also overcrowded, overgrazed and prone to drought. Pre-independence policy favoured the white commercial farmers, who enjoyed subsidized inputs, services and controlled prices, particularly of maize and beef, which were well above world prices. The government has since independence revised its agricultural policy but the communal farmer still remains the underdog. "The subsidies and direct agricultural services have been poorly targeted, the extension staff have been ill-prepared for their work, asked to take on work that is inappropriate, and have been unable to reach the most needy," the Namibia Economic Policy Research Unit stated in a 1996 report. "Farm production and rural incomes remain low. The framework for the price controls on beef and maize is still in place. The benefits are weighted in favour of the commercial producers and monopolistic processors."

*******