Revamp the Namibian economy

Considering the demographics of the Namibian nation, from its population density, ethnicities, educational levels, health of the populace, economic status, religious and political affiliations, and other aspects of the population; all these elements need radical economic reforms that are commensurate with digital and information systems.

According to the Namibian Constitution, Article (98) (1), the economic order of Namibia shall be based on the principles of a mixed economy with the objective of securing economic growth, prosperity, and a life of human dignity for all Namibians. Two: the Namibian economy shall be based, inter alia, on the following forms of ownership: (a) public; (b) private; (c) joint public-private; (d) co-operative; (e) co-ownership; (f) small-scale family.

The standard economic measurement of a nation’s economic production is called the gross domestic product (GDP).

It is the market value of all final goods and services produced within a country in a given period of time.

What this means is that the size of a nation’s GDP is the main factor that determines its wealth or poverty.

This means that if the Namibian population does not change much from year to year but the GDP grows, the per capita income goes up. It is imperative to note that per capita for any country does not disclose everything.

For instance, it does not measure important things that are not sold in the market.

Since the numerical figure is the amalgamation of the overall income in the country, it does not provide an accurate representation of the standard of living. In other words, it fudges the inequality level in any country.

It is against this background that this writing seeks to partially address other factors that can be considered.

When Covid-19 broke out on 14 March 2020 in Namibia, most of the country's economic sectors were caught red-handed by the pandemic, including the retail-market sector, mining sector, transportation sector, and agricultural sector, among others.

A young nation like Namibia must be willing to examine its official policies, law, economic structures, and cultural values and traditions, to see whether they promote the aspirations of the Namibian people.

Rule of law

The rule of law is of paramount importance to any mixed economy such as Namibia. In order to prevent theft, cheating, tax evasion, and corruption, a crystal-clear and unbiased rule of law should be upheld at all levels of government structures.

Most African countries have abundant resources but still languish in poverty.

Moreover, not all of a nation's citizens, including the highest government officials, are accountable to the laws or face punishment if they break the laws.

Countries grappling with these issues include the Democratic Republic of Congo (DRC), Uganda, and Chad, to mention but a few.

A proper rule of law should be put squarely in place in order to avoid what we call "the tragedy of the commons."

The tragedy of the commons refers to a situation in which individuals with access to a public resource (also called a common), act in their own interest and, in doing so, ultimately deplete the resource.

Lower taxes

A study conducted by Alvin Rabushka of Stanford University indicated that, if entrepreneurs and workers are to be more productive in the mixed economy, a government can maintain relatively low tax rates. Of course, people produce, innovate and create more when they are permitted to keep more of what they earn.

Botswana lowered their value-added tax (VAT) from 14% to 12% as of 3 August for a period of six months.

Not only Botswana has taken this path.

John F Kennedy did it in the 1960s, and Ronald Reagan did it by the early 1980s (their economic expansion lasted for twenty-five years).

An over-reliance on taxes is not a panacea. It has been proven that tax alone cannot raise sufficient capital for the state. We have been collecting tax in Namibia since 1990, but we still have a problem. Lower tax rates should be enacted.

In addition, there have also been rumblings of service delivery caused by incompetence and a lack of specialisation.

Since 1990, there has been a tendency for Cabinet minister reshuffles, but youth unemployment still stands at 40.22%.

'Jack of all trades, master of none' at times breeds counterproductive outcomes that have to be practiced somewhere else and not where the fate of human dignity is determined.

So when everyone acts as a specialist, more is produced than if each individual made the final product from start to finish.

Finally, as information-intensive industries reshape our world, the government must differentiate their timeworn economics of things and evolve in the economics of information technology as well.

•Tio Erastus Nakasole is an MBA student at the Namibia University of Science and Technology, with an honours degree in economics. He currently works as a sales and service manager at HiFi Corporation Namibia. The views expressed are his own and do not represent those of his employer.