Plastic bag levy boosts local production

Consumers are learning the value of plastic after government intervention put a stop to free carrier bags handed out at shops.

20 November 2019 | Environment


Plastic bags litter Namibia and add to the negative impact of climate change currently laying waste to the economy. The government has increased the cost of plastic carrier bags in order to address this situation.

An environmental levy on plastic shopping bags was introduced by the ministry of finance on 1 October 2019, after an amendment of the regulations was published in the Government Gazette on 2 August. Previously no levy was charged on plastic bags, allowing shops to hand them out for free. Now 50 cents per bag must be collected from the customer. The money goes to the Environmental Investment Fund of Namibia (EIF), which uses it to fund climate change resilience.

On 16 September the executive director of the ministry of finance, Ericah Shafudah, instructed “every importer, manufacturer or dealer, who on the implementation date has in his possession the goods concerned, which have not been cleared for home consumption, should take stock of such goods and declare them to customs, and pay the levy specified in the schedule.”

Now the levy is in place with the hope that it will change consumer behaviour and help Namibia better protect its fragile environment.

According to Nico du Plessis, the managing director of Plastic Packaging, a local manufacturer of plastic bags, sales of plastic bags have dropped significantly. He says the impact on costs is more than might seem obvious. “The levy imposed on carriers is more than the cost of one bag, subsequently increasing the cost of carriers by more than100%.”

Nevertheless Du Plessis attests that the change is positive.

“Being responsible in the usage of shopping bags would be the most significant factor that should be achieved by this levy. By paying for your shopping bags, a decision is taken daily to think whether the bag is really needed,” he says.

Plastic Packaging employs about 500 Namibians at three manufacturing plants and is a 100% Namibian-owned entity. With a state-of-the-art printer to be commissioned in its new extrusion hall, the business intends to increase recycling volume over 20% next year, while diversifying the range of commodities it recycles.

Johan Struwig, chief executive officer of Namibia Plastics, the other local manufacturer, wants an even bigger change in attitude towards plastic. “Plastic is our friend. There is a worldwide plastic economy and Namibia is taking its place in it. We are a player in this world,” he says.

Namibia Plastics provides 37 jobs. Struwig’s business partner Jan Duvenhage, who is the general manager of PolyNam, Namibia Plastics’ planned new N$100 million recycling plant, is just as excited about the “new plastics economy” that is developing in Namibia. The new plant will increase the company workforce to 109.

“Let’s make Namibia clean while we make money,” Duvenhage says.

Duvenhage elaborates on a circular economy featuring job creation, economic growth and social fairness. For this, Namibia needs transition strategies involving redesign and material innovation to encourage recycling and promote compostable alternatives.

“There is good technology now, allowing us to get the plastic back and to reuse it,” Duvenhage says. What is needed is a public procurement shift and relevant regulations to create demand, he believes.

The new levy is already helping with demand for locally manufactured plastic bags, Duvenhage says, as retailers are indirectly forced away from imports to save on costs.

“For us local manufacturers, it is like manna from heaven, thanks to the exposure and the volumes we can build, but for the client and the end user it is a different story,” he says, implying that costs are always passed on down the supply chain.

“We must keep the plastic in our economy. Informal waste collection contributed 37 000 jobs in South Africa last year. We can mine the dumpsites; the technology is there now.”

According to him the growth opportunities lie in the secondary market, for which Namibia has the added advantages of infrastructure, good roads and a functioning harbour. Namibia Plastics already exports about 15% of its production, and hopes to increase that to 30% next year, he says.

“We can show the world that we can set the standard for Africa here from Namibia,” Duvenhage says.

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