The Role of Ethics in Industrial Policy Development in Namibia: A Closer Look at Vision 2030

Introduction and background

Industrial policy is a form of government influence on business sectors and firms within an economy. It has been both distinguished from and closely associated with other forms of government planning and intervention in the marketplace, such as a nation’s competition policy, its trade policy or its macroeconomic policy (African Global Trade Institute, 2024).

Many traditional definitions have been narrow ones, such as the selective and strategic targeting of certain business sectors or firms over others to receive greater government support in order to improve, or to take advantage of, their productivity and competitiveness. Definitions of industrial policy have also shifted somewhat in recent decades, and industrial policy has more often been described broadly as government intervention undertaken to support multiple economic goals (African Global Trade Institute, 2024).

The purpose of this paper is to place the focus on the ethics behind a successful roll-out of industrial policies in Namibia. For an industrial policy framework to succeed in Namibia, it must address certain concomitant challenges, as this paper will show.

The study follows a qualitative method which assesses issues of ethics, social inequality and industrialisation. It further identifies and assesses the current view on industrial policy and its implementation. The focus falls on peer-reviewed articles relevant to the subject. The study is intended as a policy evaluation, since it examines an existing policy, namely Vision 2030 (Office of the President, 2004).

The study could not take the form of a case study, because Vision 2030 has not been meaningfully implemented, and because a case study would require quantitative research over a specified period. Since Vision 2030 remains an existing policy of which only four years now remain, the study instead examines what went wrong and whether the policy is still achievable. It asks, for example, whether Vision 2030 contained sufficient ethical considerations to have succeeded (Office of the President, 2004).

The study aims to reveal findings that carry implications for policymakers and for the various stakeholders engaged in strengthening the norms that surround industrial policy and beneficiation. Ethical norms on industrialisation can help reshape a successful implementation and roll-out system, and such a roll-out would benefit immensely from concrete industrial policies backed by a strong ethical foundation. Close attention is therefore paid to two countries with successful industrial policies, Germany and South Africa, so as to see what Namibia and Africa might learn from them.

The goal of industrialisation, and of increasing the share of manufacturing in the economy of Namibia, dates back to long before Vision 2030 was introduced in 2004. There nonetheless seems to be virtually no actor in Namibia who openly questions the relevance of the objectives stated in Vision 2030 (Rosendahl, 2010). A brief review of Namibia’s most important policy documents on industrial policy illustrates this further.

This study looks more closely at Namibia’s foremost industrial policy instruments and their results in terms of costs and benefits (Rosendahl, 2010). It also places the focus on the instruments that form part of the government’s strategy to promote a successful industrial policy roll-out. What makes the study relevant at this stage is the role industrial policies may play, and the extent to which ethically grounded laws and policies would generate growth and development for Namibia and for Africa generally.

The study further examines the ethical framework within existing policies. Where those policies do not identify ethical considerations, it seeks to identify the ethical framework that ought to have been included, and to explore the consequences of its omission.

Industrial policy can be explicit or implicit, intentional or unintentional, but in effect it has typically meant that certain industries are favoured over others. Most countries pursue industrial policy through government decisions, regulations or laws that encourage ongoing activity or investment in a chosen industry. In practice this is likely to require several elements working together, including a vision, a set of instruments and coordinated governance across policy domains such as education, innovation, manufacturing, economic and financial policy, so that the favoured industries can achieve economies of scale and become low-cost producers.

Marrying industrial policy with ethics is an eminent necessity. If that connection is ignored, or is not fully embraced, the result may be weak industrial policies that bear little or no effect. It is for this reason that the experience of countries such as Germany and South Africa repays close attention.

Research problem and objectives

Having been reclassified from an upper-middle income country to a lower-middle income country in 2025, following the income classification update of the World Bank for the 2026 financial year, Namibia faces multiple challenges in its economic development (The Brief, 2025). The primary purpose of this study is to investigate and to strengthen the relationship between industrial policy and ethics.

The legacies of apartheid policies have nurtured a highly skewed distribution of assets and opportunities among Namibians, and this has to date not been overcome (Rosendahl, 2010). Much hope was therefore placed on post-independence policies to address that legacy, yet implementation has been slow. Earlier work on Namibia’s change of income status likewise found that classification alone does not determine development outcomes, since donor behaviour responds to a wider set of sectoral and governance factors (Kazauana, 2014).

Vision 2030 is one of the few policies framed to target spatial and social inequality in Namibia, but its impact is yet to be realised. Although social and equity concerns rank high in Namibia’s policy papers, those policies are not effectively targeted towards reducing spatial and social inequalities (Rosendahl, 2010). These difficulties speak volumes, because the ethical commitments governing the equitable distribution of wealth in Namibia remain pending and weak.

In line with the purpose stated above, the main objectives of this study are as follows.

To identify how the integration of ethics strengthens good industrial policies.

To identify why the policy goals of Vision 2030 have still not been achieved.

To identify the conditions for success and failure that should be considered before policies are introduced.

To determine the tools needed to avoid policies which are unattainable.

To determine whether the introduction of beneficiation policies and special economic zones (SEZs) will generate growth for Namibia’s economy.

To determine how industrial policies can be tailored to artificial intelligence (AI).

Literature review

A. The history of industrial policy in Namibia

As early as 1992, only two years after independence, the government of Namibia adopted the White Paper on Industrial Development. Its main objectives were increased value addition in manufacturing by stimulating productivity and exports and, where efficient, import substitution; increased diversification through economic growth and inter-industrial linkages; employment generation, especially for disadvantaged groups; and an improved geographical distribution of industries (Rosendahl, 2010).

According to a 1998 independent review commissioned by the Ministry of Trade and Industry, the White Paper failed to start from a comprehensive assessment of Namibia’s potentials and constraints. It proposed instead a blueprint approach to industrial development, emphasising the importance of manufacturing but without identifying specific sub-sectors or explaining the links to other policy areas (Rosendahl, 2010).

Although Namibia does not have an explicit industrial policy, various pieces of legislation exist and govern the various sectors. Namibia is nonetheless pursuing industrial policy in the sense that it tries to promote specific economic sub-sectors through selective policies (Rosendahl, 2010).

These policies are not laid out in an overarching industrial policy document, but rather in sector policy documents or even in specific laws. The sections that follow look more closely at some of Namibia’s industrial policy instruments and their results in terms of costs and benefits.

B. The reality of Germany and industrial policy

Germany is a highly industrialised country, and consistently emerges as such, because of its effective policies on industrialisation and its recovery from two world wars. German sovereignty in industrial policy is exercised within international trade agreements such as those of the WTO and, in particular, within the legal framework of the European Union. EU competition law, including merger control and the state aid rules administered by the European Commission, sets major boundaries on direct financial subsidies by national governments and on the support of national champions through public procurement (Erber, 2016).

Germany is already a dominant economy in the manufacturing industries inside the European Union. This makes it more difficult for the German government to act unilaterally, because doing so would ignite conflict with EU partners over unfair competition. Consensus building at EU level is therefore a key objective of the German federal government, and the principle of German industrial policy is an inclusive bargaining process between the respective stakeholders at national and European level (Erber, 2016).

German manufacturing industry has, from its beginnings in the nineteenth century, been rather successful by international standards. After catching up with the British industrial revolution, German manufacturing has in many key areas remained at the frontier of international industrial development. With the industrialisation of many emerging market economies over recent decades, however, traditional industries such as steel mills, shipbuilding and the standardised product lines of the chemical, optical and electronics industries lost their comparative advantages against new international competitors (Erber, 2016).

This led to painful restructuring in the German industrial structure. With the internationalisation of manufacturing companies, globalising value chains also led to the relocation of production sites offshore. Because wage costs in Germany are relatively high by international standards, German companies were often very successful in establishing transplants in key international markets, particularly in Europe, the United States and China, through foreign direct investment (FDI) (Erber, 2012).

Many large multinational corporations in German manufacturing have not only established significant market positions in more than a hundred countries, but have used those markets to produce for local or regional demand abroad, tapping into the lower wage cost structures found there. Germany offers immense lessons and, given its close ties to Namibia, it is essential that Namibia take note of how Germany designs and rolls out industrial policies. Even though Namibia is not at Germany’s industrial level, lessons can still be drawn on how to ensure SMART policies, as discussed later in this study.

C. The case of South Africa and industrial policy

Industrial policy is not a new instrument for South Africa. The country faces persistent challenges such as high unemployment, economic inequality stemming from apartheid-era policies, and an economy historically dependent on commodity exports. Industrial policy provides a framework to diversify the economy, create quality jobs, and ensure that previously marginalised communities participate fully in economic growth.

i. Localisation and the Proudly South African narrative

Despite achieving excellent results in important areas, and despite the significant impact of its initiatives in preventing further and potentially disastrous de-industrialisation, South Africa still encounters numerous significant obstacles on its path towards re-industrialisation. Implementation of industrial policy has been challenging because of the inconsistent and hesitant global economic recovery, as well as deep-rooted domestic structural problems and limits. These factors collectively hinder the competitiveness of the manufacturing sector, and the existing literature accordingly highlights a series of difficulties encountered during the execution of industrial policy in South Africa (Kgaloshi & Nyika, 2024).

Proudly South African, initiated in 2001, is a national campaign that encourages the purchase of locally produced goods and services. The campaign focuses on promoting South African companies, organisations, products and services that exhibit superior quality, local content, fair labour practices and environmentally responsible standards. Localisation aims to redirect demand away from imported goods. Its objective is to safeguard and potentially generate employment by advocating local purchasing, boosting local manufacturing, and exerting significant influence over procurement in both the public and the private domain (Kgaloshi & Nyika, 2024).

Major corporate institutions and small, medium and micro enterprises (SMMEs) can accomplish these objectives by influencing their supply chain management decisions in favour of local products and services. Purchasing goods from local sources can therefore carry both economic benefits and wider social consequences, and these endeavours resonate with genuine feelings of patriotism and communal unity in a society where unemployment is widely experienced (Kgaloshi & Nyika, 2024).

Government creates favourable conditions for the emergence of work rather than directly generating employment opportunities, which implies that enterprises are responsible for creating tangible employment (Kgaloshi & Nyika, 2024). South Africa continues to be a trailblazer in the way industrial policies are formulated by the people and for the people, and this raises important considerations for the roll-out of policies centred on specific industries.

ii. Priority sectors for industrial policy in South Africa

The government of South Africa has identified several critical sectors that form the backbone of its industrial strategy, namely manufacturing, agro-processing, mining and mineral beneficiation, and tourism.

Manufacturing remains central, encompassing everything from automotive production to chemicals and machinery. The country has achieved notable success in automotive manufacturing, which has preserved employment and generated significant linkages into sectors such as leather and plastics.

Agro-processing offers considerable potential because it combines South Africa’s agricultural strengths with value-addition opportunities. By processing agricultural products locally rather than simply exporting raw materials, the country can create more jobs and capture more value from its natural resources.

The mining and mineral beneficiation sector represents both a historical strength and a future opportunity. While South Africa has long been a major exporter of minerals, the focus has shifted towards downstream beneficiation, that is, turning raw minerals into finished products locally rather than shipping them abroad for processing.

Tourism stands out as a labour-intensive sector with significant growth prospects, leveraging South Africa’s natural beauty, wildlife and cultural heritage to attract visitors and create employment opportunities across the country.

D. Ethical infrastructure and industrial policy

When looking at industrial policy, two schools of criticism emerge. The first holds that governments do not have more knowledge than businesses or financial markets, and that governments therefore cannot pick winners or losers effectively in a national economy. The second holds that industrial policy breeds corruption and rent seeking through cronyist relations between government, financial markets and business. These critics see industrial policy as working against market forces, liberalisation and free trade, all of which are taken to be fundamental to economic and business success. Neoclassical economists regard market forces and free trade as superior to collaboration among government, business and other actors in a national economy (African Global Trade Institute, 2024).

A model of industrial policy that requires collaboration between the public and the private sector, between the national and the international, and between the state on one side and multinational corporations and financial institutions on the other, is the more compelling one. This double-sided collaboration and knowledge sharing is fundamental in today’s complex global business environment (Choi & Digol, 2010).

What society now demands, and what business ethics advocates, is that business leadership be held accountable for its ethical failures at whatever stage those failures are discovered (Choi & Digol, 2010). A new business ethics requires an approach centred on people, on moral values, and on the restoration of trust and confidence. Developing ethical behaviour resembles learning a skill, in that it entails an appreciation of the difference between what is good and what is bad.

At the level of business, that appreciation can manifest itself through the adoption and efficient implementation of codes of behaviour, standards of operation, and checks and balances that prescribe personal morality and private ethics as well as overall corporate ethics. At the level of the state, ethics should become part of public policy and, in particular, part of state industrial policy. The route to this is the integration of an ethical infrastructure into the state’s industrial policy, which is of the utmost importance for ongoing inward investment and future prosperity (Choi & Digol, 2010).

E. Special economic zones, Namibia and Vision 2030

In August 2022 Namibia adopted a national policy on special economic zones. The policy provides for both fiscal and non-fiscal investment incentives across investment categories such as exporters and manufacturers, and the zones are organised around a sectoral focus pinned to specific industries (United Nations Conference on Trade and Development, 2022). Namibia had implemented export processing zones (EPZs) under the Export Processing Zones Act 9 of 1995, in operation from 1996, but the then Minister of Industrialisation and Trade has acknowledged that the regime delivered little economic impact and little tax gain for the state, benefited investors alone, and nearly led to Namibia being designated a tax haven (The Brief, 2024).

Work on the special economic zone regime has continued since 2025 under the Ministry of Finance together with the ministry now responsible for industrialisation, the portfolio having moved when the Ministry of Industrialisation and Trade was disestablished in the cabinet restructuring of March 2025. The framework is reported to be in its final stages, and it is directed at the industrial transformation that Vision 2030 set out to achieve by 2030 and has so far failed to deliver.

The main objectives of the special economic zone policy are to attract foreign direct investment (FDI), to create employment opportunities and to enhance export capabilities. Namibia’s move towards special economic zones represents a strategic attempt to diversify the economy beyond traditional sectors such as mining and agriculture, and to act as a catalyst for structural transformation and industrialisation (The Brief, 2024).

By designating areas with tailored incentives, the government aims to position Namibia as a competitive destination for business, and so to drive economic growth and development in the region. South Africa proceeds on a similar premise, and a shift is visible in both countries away from reliance on the West and towards an initiative made by locals for the international community.

F. Integrating industrial policy, ethics and artificial intelligence

As artificial intelligence (AI) becomes integrated into industrial policies, it is crucial to consider its broader economic implications. The advancement of AI has the potential to disrupt traditional economic structures and to influence foreign policy and international relations. As AI technologies reshape industries, governments must consider adapting their policies to manage economic fluctuations and safeguard national interests. This entails not only developing strategies to promote the adoption of AI but also addressing its ethical and social ramifications (Chatterjee, 2020).

On 18 March 2018, Elaine Herzberg was wheeling her bicycle across a street in Tempe, Arizona, when she was struck and killed by a self-driving car. Although a human operator sat behind the wheel, an autonomous system was in full control (Shaw, 2019). The incident raises the question of how ethical considerations are to be made when artificial intelligence is in full play, and of what obligations attach to those who design such systems. Those questions matter for Namibia if full industrialisation is to take place as envisaged in the Vision 2030 mission statement.

The intersection of AI and industrial policy also raises questions about the workforce. The automation capabilities of AI can lead to significant changes in employment patterns, which highlights the need for policies that support worker retraining and skills enhancement (Chatterjee, 2020). Addressing these challenges is critical to preparing the workforce for the evolving job market that AI technologies are shaping.

The integration of AI into industrial policy therefore requires a holistic approach that addresses operational efficiency, governance frameworks, economic impacts and labour market transformation. Policymakers must harness the potential of AI while addressing its associated challenges, so as to support sustainable industrial growth. This study discusses the ways in which AI may affect industrial policy, examines the challenges encountered in aligning industrial policy with AI-driven production and daily life, and proposes policy recommendations.

Industrial policies generally fall into two main categories, state intervention and free-market approaches. State-interventionist industrial policies involve direct government action to steer the industrial sector, and through instruments such as incentives, subsidies and tax breaks the government can stimulate growth in specific sectors (Mazzucato, 2018).

Long-term policies such as infrastructure investment and education initiatives are further tools used by the state to guide the industrial sector (Mazzucato, 2018). Free-market-based industrial policies, by contrast, advocate allowing market dynamics to operate with minimal government intervention, and promote the enhancement of industrial competitiveness through free trade, innovation and entrepreneurship (Berrah et al., 2021).

The effectiveness of industrial policies is measured by the transformations occurring within the industrial sector. Such transformations include the modernisation of production structures, increased labour productivity, technological advancement and sectoral diversification (Berrah et al., 2021).

Regulations governing AI applications in industrial policy are critical to managing modern production processes in an effective, secure and sustainable manner. With the widespread adoption of AI technologies in the industrial sector, there is an increasing need to develop regulatory frameworks in areas such as data security, ethical use, market competition, employment impacts and sustainable production. Inclusive governance in AI policy design is increasingly emphasised in recent literature (Berrah et al., 2021).

Methodology

This is desktop and library-based research. It relies on published peer-reviewed articles and places the focus on significant primary and secondary sources of information addressing the research questions.

The secondary sources include, but are not limited to, journal articles and papers written by academics, industry experts and researchers on issues relevant to the study. The study also relies heavily on public internet sources, in particular peer-reviewed research articles. The approach to the information obtained from these sources is descriptive, analytical and exploratory in nature.

The paper is a review article and is theoretical in nature, which means that it draws on contemporary research literature to inform its analysis and discussion. Rigorous reviews and knowledge syntheses remain relevant because they discern what has been discussed and published on the topic under investigation; show the extent to which current research communicates outcomes and trends; and pinpoint the areas, questions, assumptions, claims and findings that need further exploration (Paré et al., 2015).

Several types of review can be conducted, including narrative, systematic, scoping, semi-systematic and critical reviews. These differ in their main goal or purpose, in the search strategy adopted, and in the way appraisal, analysis and synthesis are carried out (Grant & Booth, 2009; Snyder, 2023). This study adopts the critical review approach, or integrative literature review, as described by Snyder (2023).

The important methodological decisions for this review concerned the formulation of a clear research question, the choice of databases to be searched, and the inclusion and exclusion criteria applied to the articles found (Mpofu, 2025). Other vital considerations involved determining the right boundaries for the review, selecting what information to extract, deciding how to analyse and synthesise it, reporting the findings, and showing the researcher’s own contribution (Snyder, 2019).

The methodology further applies a pragmatic qualitative approach, drawing on grounded theory and narrative approaches, to collect, filter and analyse secondary online data from multiple sources that must be filtered on the basis of their quality. Some researchers argue against a procedural approach to qualitative research, on the ground that following a guide can distract researchers and prevent them from explicitly acknowledging their own positionality and its influence on the research output (Major & Savin-Baden, 2010).

Journal articles were searched through the Google Scholar database, using the key terms and phrases “industrial policy”, “ethics”, “AI” and “Vision 2030 Namibia”. All the papers found were reviewed, with particular attention to the abstract, keywords and introduction, and with a focus on those that addressed the motives, justification and rationale for ethics.

Conclusions

This study has reviewed and explored the literature on the motivations advanced by different researchers within the ambit of industrial policy, ethics and AI, while placing the focus on Namibia’s Vision 2030. The concepts of industrial policy, ethics, AI and Vision 2030 have been raised in order to determine how they can co-exist, remain relevant for Namibia, and deliver the industrialisation the country needs.

All aspects of the keywords addressed in this study were explored in order to give an in-depth discussion of the topic. A limitation experienced during data collection is that some industrial policy instruments are still under review and pending, so that the ethics surrounding them remains unsettled. A further limitation is the absence of dedicated beneficiation legislation.

In conclusion, becoming an industrialised nation is easier said than done. Even a perfectly drafted industrial policy still requires intervention from the public and the private sector, a corruption-free legislature, and a considered integration of ethical standards to govern such policies. The SMART approach and the recommendations set out below would have to be fully embraced and rolled out. The examples of Germany and South Africa serve as a banner for Namibia to follow and, even with the existing challenges, industrialisation remains achievable.

Recommendations

The following factors should be considered when implementing new policies.

Gather data.

Test the hypotheses and find where the policy has already worked.

Carefully consider the mechanisms that will bring about the changes desired.

Consider the reasons a policy will fail and identify ways to mitigate those risks.

Identify how success and failure will be measured and managed.

Determine how long it will take to achieve the goal.

Confirm that the resources needed to achieve the goal are available.

Enhancing collaboration among public institutions, the private sector and academia will play a critical role in increasing the effectiveness of industrial policies. To ensure the responsible use of AI in industry, ethical and legal regulations need to be established.

Governments should establish financial support mechanisms to promote AI-based production models and sustainable industrial practices.

Policy design should follow the SMART approach, in which each letter represents a requirement. S stands for specific, so that objectives are kept clear. M stands for measurable, so that the success or failure of a policy can be determined before implementation. A stands for attainable, because the policies set must always be capable of being achieved. R stands for relevant and resourced, so that the policy lies within the control of the implementer and the resources needed to attain the goal are available. T stands for time-based, which means that there should be no evergreen industrial policies, since a policy must carry a time frame within which its goal is to be attained.

Acknowledgements

The author thanks God almighty, and the team at BEN-Africa, whose work has opened many doors and sharpened her knowledge, love and understanding of ethics. She also thanks her mentor, who introduced her to BEN-Africa in 2021, and Mr F. M. Mukwata for his commitment to this paper.

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