Why is it important to define a commodity as Namibian?
It confirms its country of origin locally and abroad hence adding value to the local economy and stimulating a sustainable competitive advantage for the product or entity.
In our recent stakeholder research, consumers indicated that they view a Namibian product as something that is manufactured or produced in Namibia with the possibility of importing the raw materials. Consumers do not view a product that is merely packed in Namibia as a Namibian product. Consumers want to buy local products to support the local economy. The main reason given by participants as to why consumers do not buy local products is because they are not aware of which products are local. So the Team Namibia logo will endorse these products as Namibian.
What is Country of Origin (COO)?
COO refers to the country of manufacture, production or growth where an article or product comes from. Country of origin is a way to differentiate the product from the competitors. Research shows that the country of origin has an impact on consumers’ quality perceptions of a product, as well as ultimately preference for and willingness to buy that product.
Rules of Origin
Rules of Origin are rules to determine the nationality of goods. Under SADC Trade Protocol, the rules of origin are necessary for an exported product to enjoy lower tariff rate or preferential tariff rate under the Free Trade Agreement (FTA).
There are three criteria for products to be deemed of SADC origin to which Namibia is party:
A product originates in Namibia if it is wholly produced within this country or if imported inputs were used only to raise or grow agricultural products. Products born, raised, grown, mined, fished.
’Value-added’ is the increase in value that can be attributed to a certain input. To calculate the percentage content of added value on non-originating materials on finished goods, simply subtract the value of the imported materials (customs value) from the ex-factory price and divide the difference by the ex-factory price and convert the result to %. (The “ex-factory” price of a product is the price that the manufacturer receives if the good is picked up at the factory). The value of non-originating materials on the finished product should not exceed 60% of the ex-factory price or the value addition should be at least 40% of ex-factory price.
FORMULA: Value-added of the production process = (ex-factory price minus cost of imported material inputs) / Ex-factory price
Each product has a tariff heading, or classification, according to the HS of coding. Origin is granted if the exported product falls into a different part of the tariff classification to any imported inputs that are used in its production.
EXAMPLE: Country A imports material X and manufactures it into final product Y.
X and Y have different tariff headings, so Y is considered to originate in SADC, assuming that the origination rule governs the originating status of Y in the SADC rules of origin in cases where products are governed by a change of tariff.