Namibia’s economic recovery ‘disgraceful’
Namibia's low growth trajectory is far short of what it needs to undo the economic damage of recent years, analysts say.
29 July 2021 | Economics
In January, Cirrus Capital forecast annual economic growth of 3.8% for this year. Releasing its latest Mid-Year Economic Review, Cirrus said it now expects a “disappointing” expansion of only 2.1%.
The new growth forecast is disheartening as it only slightly exceeds Namibia’s population growth of around 1.9% per year and it follows annual economic growth of -8% in 2020, largest contraction in Namibia’s history.
“The large contraction has resulted in a very low base for growth, but much of the economy remains in a precarious position given the stagnating economy prior to 2020,” Cirrus said.
The analysts’ 2.1%-forecast for Namibia is below the 7.5% and 3.1% they expect neighbouring Botswana and South Africa respectively to grow in 2021.
“Although both countries experienced similar contractions (Botswana’s being deeper), Namibia’s growth rebound is disappointingly lower. Additionally, Namibia’s growth is not only below the world average (6.0%), but also below the expectation for emerging market and developing economies (6.7%), and Sub-Saharan Africa (3.4%),” Cirrus said.
They added: “Viewed in this light, Namibia’s recovery is disgraceful – both in terms of the large contraction in 2020 and the poor growth before 2020.
According to Cirrus, the low growth trajectory is far short of what Namibia needs to undo the damage of recent years, but the requisite sense of urgency does not reflect in policy.
“Namibia’s economic recovery, and indeed her full potential, is hampered by an uncompetitive business environment and unattractive investment climate. These are hindrances of our own making. However, the requisite urgency and direction required to place Namibia on the right path (and quickly) do not appear to have materialised,” they said.
The National Equitable Economic Empowerment Bill (NEEEB) and the Namibia Investment Promotion Act (NIPA) are two key hurdles hampering the country’s investment attractiveness, international and local experts have been pointing out since the original empowerment framework made its debut in 2016..
The Namibia Investment Promotion and Development Board (NIPDB) has presented final stakeholder input on NEEEB and NIPA to the Office of the Prime Minister (OPM) and the ministry of industrialisation and trade (MIT), it said in its first quarterly report since it was established last March. Nangula Uaandja, former chief of PwC Namibia, is the chief executive officer of NIPDB.
According to the report, which covers the quarter ended 30 June 2021, NIPDB became the key NEEEB contact facilitator for stakeholder input in March and April and hosted four meetings.
“All relevant input was collated and provided to the OPM. Meetings with the OPM are ongoing,” NIPDB said.
Regarding NIPA, NIPDB also provided its input to the MIT.
“NIPDB plans to play an instrumental role in informing all stakeholders on necessary new policies as well as changes needed to enhance existing policies to ensure a favourable investment climate,” the board said. – [email protected]