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Namibia Projected to Grow 4% in 2025, But More Reforms Needed

By Josef Kefas Sheehama Achieving sustainable economic growth, reducing the productivity gap, and enhancing resilience will require a fundamental paradigm shift, engaging all stakeholders and development agencies. Namibia’s persistent economic challenges, including corruption, low productivity, poor implementation, and underperformance by certain government ministries, State-Owned Enterprises (SOEs), and community leaders, hinder progress. To combat corruption in contracting, the government must adopt clear and practical policies and procedures. Furthermore, I urge H.E. Dr. Netumbo Nandi-Ndaitwah to hold her cabinet accountable and take decisive action against those failing to prioritize the interests of Namibians. The Namibian economy is projected to grow by approximately 4.0% in 2025, a modest improvement but insufficient for addressing deep-rooted economic challenges. Achieving fiscal sustainability requires improving domestic revenue collection and reducing the debt-to-GDP ratio to 57%. The 2025 National Budget must prioritize debt reduction, focusing on domestic revenue financing while curbing reliance on foreign borrowing. Critical sectors like manufacturing, mining, energy, and agriculture, along with emerging industries such as logistics, must receive targeted investment. By aligning fiscal policies with economic goals, Namibia can move toward achieving at least 70% of domestic revenue contributions to the national budget. Addressing duplication in governance, including eliminating the roles of governors and deputy ministers, could free resources for revenue-generating initiatives, ultimately reducing unemployment. Namibia, despite being classified as an upper-middle-income country, faces high poverty levels and severe income inequality. Tackling these issues requires creating jobs, addressing corruption, and improving investor confidence. Corruption erodes trust, discouraging investment and undermining economic growth. The government must also focus on expanding the manufacturing base to reduce reliance on imports and create more stable job opportunities. Currently, 70% of Namibia’s workforce is employed in low-productivity sectors like agriculture and the informal economy. Transitioning labor and investments to high-productivity sectors is essential to lift incomes and reduce poverty. A robust strategy for social and economic inclusion is critical. This involves engaging stakeholders to craft a plan that prioritizes raising living standards and shifting resources to high-productivity sectors. Upskilling the workforce, particularly young Namibians is vital to capitalize on opportunities in manufacturing, agriculture, and other key industries. The African Continental Free Trade Area (AfCFTA) offers significant potential for Namibia to expand its manufacturing sector. However, structural reforms in trade and industrial policies are needed to enhance competitiveness and scale. Supporting small businesses, a significant contributor to job creation should also be a priority. Diversifying the economy beyond mining and fostering inclusive growth are critical for long-term sustainability. Namibia must adopt proactive and efficient policies to encourage high-quality development. Citizens aspire to see improvements in healthcare, education, pensions, job creation, and economic diversification. Lowering inflation, increasing access to business capital, and formalizing the informal sector are additional goals that require immediate attention. On the global stage, Namibia faces challenges from geopolitics, inflation, and exchange rate volatility. The possibility of international trade disruptions, particularly US tariff policies, adds to the uncertainty. Strengthening partnerships with BRICS and improving trade facilitation are vital for navigating these challenges and fostering stronger economic ties. To sustain economic growth and overcome long-standing constraints, Namibia must address critical issues such as trade facilitation, governance reforms, and business climate improvement. By prioritizing fiscal sustainability, inclusivity, and resilience, the country can unlock its economic potential and achieve long-term prosperity. Post Views: 11

admin January 6, 2025 3 min read

By Josef Kefas Sheehama

Achieving sustainable economic growth, reducing the productivity gap, and enhancing resilience will require a fundamental paradigm shift, engaging all stakeholders and development agencies.

Namibia’s persistent economic challenges, including corruption, low productivity, poor implementation, and underperformance by certain government ministries, State-Owned Enterprises (SOEs), and community leaders, hinder progress. To combat corruption in contracting, the government must adopt clear and practical policies and procedures. Furthermore, I urge H.E. Dr. Netumbo Nandi-Ndaitwah to hold her cabinet accountable and take decisive action against those failing to prioritize the interests of Namibians.

The Namibian economy is projected to grow by approximately 4.0% in 2025, a modest improvement but insufficient for addressing deep-rooted economic challenges. Achieving fiscal sustainability requires improving domestic revenue collection and reducing the debt-to-GDP ratio to 57%. The 2025 National Budget must prioritize debt reduction, focusing on domestic revenue financing while curbing reliance on foreign borrowing.

Critical sectors like manufacturing, mining, energy, and agriculture, along with emerging industries such as logistics, must receive targeted investment. By aligning fiscal policies with economic goals, Namibia can move toward achieving at least 70% of domestic revenue contributions to the national budget. Addressing duplication in governance, including eliminating the roles of governors and deputy ministers, could free resources for revenue-generating initiatives, ultimately reducing unemployment.

Namibia, despite being classified as an upper-middle-income country, faces high poverty levels and severe income inequality. Tackling these issues requires creating jobs, addressing corruption, and improving investor confidence. Corruption erodes trust, discouraging investment and undermining economic growth. The government must also focus on expanding the manufacturing base to reduce reliance on imports and create more stable job opportunities.

Currently, 70% of Namibia’s workforce is employed in low-productivity sectors like agriculture and the informal economy. Transitioning labor and investments to high-productivity sectors is essential to lift incomes and reduce poverty.

A robust strategy for social and economic inclusion is critical. This involves engaging stakeholders to craft a plan that prioritizes raising living standards and shifting resources to high-productivity sectors. Upskilling the workforce, particularly young Namibians is vital to capitalize on opportunities in manufacturing, agriculture, and other key industries.

The African Continental Free Trade Area (AfCFTA) offers significant potential for Namibia to expand its manufacturing sector. However, structural reforms in trade and industrial policies are needed to enhance competitiveness and scale. Supporting small businesses, a significant contributor to job creation should also be a priority. Diversifying the economy beyond mining and fostering inclusive growth are critical for long-term sustainability.

Namibia must adopt proactive and efficient policies to encourage high-quality development. Citizens aspire to see improvements in healthcare, education, pensions, job creation, and economic diversification. Lowering inflation, increasing access to business capital, and formalizing the informal sector are additional goals that require immediate attention.

On the global stage, Namibia faces challenges from geopolitics, inflation, and exchange rate volatility. The possibility of international trade disruptions, particularly US tariff policies, adds to the uncertainty. Strengthening partnerships with BRICS and improving trade facilitation are vital for navigating these challenges and fostering stronger economic ties.

To sustain economic growth and overcome long-standing constraints, Namibia must address critical issues such as trade facilitation, governance reforms, and business climate improvement. By prioritizing fiscal sustainability, inclusivity, and resilience, the country can unlock its economic potential and achieve long-term prosperity.

Post Views: 11