Namibia's Swiss Connection

Namibia’s Swiss Connection

International trade makes for some very odd and unexpected relationships. If you are very boring and spend time reading the country’s trade statistics you will find out some very strange things about Namibia. Our biggest trading partners are pretty much as one would expect. Most imports come from South Africa, with China a distant second place.  But even those figures probably miscalculate the size of South Africa’s exports because many goods coming into Namibia from RSA are of mixed origin. Our exports, on the other hand,  go first to Botswana which buys our diamonds but only because it has an agreement with De Beers (and hence we end up subsidizing Botswana through SACU) and second most import destination for our exports is South Africa. 

But it is some of our smaller trading partners that are not all they seem. The most recent Trade Report from  the NSA for 2015 says that the third biggest destination for our exports is Switzerland and our fifth biggest  source of imports is the Bahamas. Normally in international trade you trade with large and close countries and neither seem at all obvious candidates as significant trading partners for a country far removed from them as Namibia. They are even more improbable when you see what is supposed to be traded. The moment one see names like Switzerland and Bahamas as a major trading partner for a small distant country like Namibia one should become instantly suspicious.

These two countries along with other ‘respectable  tax havens’ like Luxembourg have probably done more  to facilitate the pillage and plunder of Africa than any non-colonial powers. Their secrecy laws and their tax provisions effectively shield companies and people from prosecution for economic crimes committed in developing countries with weak tax administrations. Whereas crime might not pay, helping criminals hide their loot certainly does. These countries have profited handsomely from the assistance to the plunder of their European neighbors as well as developing world as these are amongst the richest nations on earth.  Luxembourg, with no significant resources or industry,  is the second richest country on earth with a GDP/capita  in 2016 of US$ 94,000 based on what economists call ‘purchasing power parity’. ‘Poor’ Switzerland is ranked 10^th with a GDP/capita of US$57,000. The Bahamas, a tiny country that makes almost nothing, has a GDP/ capita of $21,000  ( Namibia was a mere US$8,000 in 2015).

Our trade statistics say that in 2016 we exported some N$ 13 billion (approximately US$1 billion) to Switzerland. While there were other exports such as diamonds, copper in various states,  made up some N$12 billion of our exports.  But when we go to the mirror data, i.e. what Switzerland says it imported from Namibia they say they only imported only US$1.2 million (N$ 17 million) from Namibia and there was no copper. Discrepancies in trade statistics are expected but this is not a minor discrepancy. What the Swiss say is that most of those imports are diamonds and some edible fruits. So if we exported N13 billion to Switzerland and the Swiss say they imported no copper who is not telling the truth? And if someone in Namibia is not being entirely honest in their import and export documentation then perhaps they should be asked to explain why.

But if that sounds curious then the import figures from Switzerland are even stranger. The Namibian trade statistics say that the country imported some N$ 743 million (US$50 million) from Switzerland. What our trade statistics say is that over half this figure in the form of copper ore and concentrate. This is very strange indeed not only because the Swiss figure say they exported no such thing to Namibia, they could not because there are, according to the most recent US Geological Survey report, there are no copper mines in Switzerland.

If you look at the Bahamas the figures become even stranger, if that is at all possible. Bahamas is Namibia’s 5^th largest source of imports and in 2016 it was reported to the NSA that we imported N$2.4 billion of goods from the Bahamas which is surprising given that Bahamas trade figures say they exported nothing to Namibia, not now, and  not in the last  three  years. So what was traded?  According to Namibian data almost all of these imports were vessels which could be vessels used by De Beers in Debmarine or fishing vessels. It is simply not known. Bahamas is what is called a ‘Flag of Convenience’ country like Panama or Liberia and there are numerous reasons, some worse than others, to register vessels in Bahamas. Many have to do with risk, insurance and taxes and fees. But many a sailor’s widow would regret the day that her deceased husband stepped foot on rust bucket registered in a Flag of convenience country,  some of which have only the most minimal of safety standards.

All of this may be perfectly normal as traders may be using Switzerland and Bahamas to defraud the tax offices of countries, other than Namibia and  that is none of our business. This may be the case with our tax free factories. But Mr Obed Kandjoze and Mr Immanuel Ngatjizeko  the ministers responsible for minerals and trade might want to help me, my students at UNAM and the public at large understand where exactly we are actually exporting our minerals to and where they are coming from. Right now it is a complete mystery. If we do not even know where our mineral exports are actually going and imports coming from and at what price it  would be difficult to be sure that we are getting the right amount of tax revenues from those in these businesses.

These are views of Professor Roman Grynberg and not necessarily those of UNAM where he is employed. This article was sent to officials in the Ministry of Minerals and the Ministry of Trade in Windhoek  for comment. Unsurprisingly, no comment was offered. This was also sent to Dundee Precious Metals, the main trader in copper in Namibia as well as to UNCTAD and AfDB and no reply was received. This apparent trade in copper is also happening in Zambia.