Namibia has a moderately free economy

12 January 2022 | Economics

ELLANIE SMIT

WINDHOEK

An index of economic freedom, which measures parameters such as trade freedom, tax burden and judicial effectiveness, says Namibia has a moderately-free economy.

The Human Freedom Index covers 12 freedoms – from property rights to financial freedom – in 178 countries.

According to the index, Namibia’s economic freedom score is 62.6, making its economy the 83rd freest.

“Its overall score has increased by 1.7 points, primarily because of an improvement in fiscal.”

Namibia is ranked sixth among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional and world averages of 55.7 and 61.6 respectively.

Mauritius was ranked the region's freest nation in the 2021 index and the only one considered “mostly free” in sub-Saharan Africa. That country's overall score was 77, taking the 13th spot the world over.

Rwanda was number two in the region followed by Botswana, Seychelles, Cabo Verde and then Namibia.

“Namibia’s economy has improved its ranking within the moderately-free category this year, aided by a substantial improvement in fiscal health. To continue toward greater economic freedom, the government needs to address rigidities in its economic and fiscal structures,” the index noted.

It said other shortcomings include ongoing corruption and related misallocations of resources, which have weakened government integrity.

Contentious

According to the index, although property rights are guaranteed by law and the courts can enforce them in Namibia, land rights are contentious, and property registration is difficult and time-consuming.

“The judiciary is independent but inadequately resourced and lacking in technical capacity. In 2019, a multibillion-dollar corruption scandal resulted in convictions of high government officials and senior business leaders who co-opted the national fishing quota system for personal gain.”

It further stated that starting a business, obtaining electricity and dealing with construction permits now cost less than they did, but business freedom as a whole has not improved compared to business freedom in other countries.

“It is not difficult to hire or dismiss an employee. There are government subsidies for education, medical care, roads and infrastructure, and agriculture.”

The index added that other barriers, exacerbated by regulatory shortcomings, undermine overall trade freedom.

“There are no formal limits on foreign ownership, but some sectors are subject to a joint local ownership requirement. Despite some progress, financial intermediation is uneven across the country.”

Singapore, New Zealand and Australia were ranked as the nations with the freest economies in the world, while Cuba, Venezuela and North Korea are deemed the most repressed.

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