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Economic Growth Will Accelerate – Report

Home Archived Economic Growth Will Accelerate – Report

By Emma Kakololo

WINDHOEK

Namibia has experienced robust economic growth over the past six years, which averaged 4.5 percent and is expected to accelerate to five percent this year and in 2008, according to a new major report by the African Development Bank (ADB) and the OECD released recently.

The African Economic Outlook (AEO) report notes that growth in Namibia has been driven by exports and private investment in the mineral sector, as well as prudent macroeconomic policies. Over the period 2007-2009, other significant investments that are expected to boost growth include the continuous introduction of new technologies for mining diamonds, the development of new uranium mines, the development of the Kudu Gas Field and construction of the gas-fired power plant.

“Namibia has the continent’s 5th highest per capita income. The macroeconomic environment remains stable, with a deficit falling from 7.5 percent of gross capita income (GDP) to 3.6 percent in 2004/07 and a budget surplus of 2.2 percent of GDP in 2006/07,” remarked Dr Temitope Oshikoya, ADB Director Development Research at a media briefing yesterday.

Oshikoya cautioned that despite the fact that the country’s overall rating was one of the highest in Africa at A, with the eleventh-highest Human Development Index, there were still several major socio-economic challenges to be addressed.

“The economy of Namibia is poorly diversified, relying heavily on extractive mining of export earnings and fiscal revenue, and is thus exposed to large and unpredictable fluctuations in commodity prices. Namibia has one of the highest levels of income inequality in Africa.

“Its Gini coefficient of 0.6 is among the worst in the continent. It has high rates of rural poverty of about 42 percent. The HIV adult infection rate of 20% is one of the highest in Africa. The unemployment rate at 37% is also high and skills shortages need to be addressed.”

The Outlook 2006/2007 analyzes the recent performance in African countries and assesses their prospects. The report is principally based on country studies, in which is examined, for each of the countries, macroeconomic performances and policies, structural issues and social and political developments. Each country is subjected to the same survey process, which provides the basis for well-informed comparative analysis.

The Outlook includes a focus on a topic of high relevance for policy makers in African countries. The Outlook 2006/2007 includes the thematic analysis of issues on ‘Access to Drinking Water and Sanitation’. One of the important targets of the MDG is Access to Drinking Water and Sanitation. According to Oshikoya, sanitation coverage in Namibia was still low with 13% rural sanitation access.

Going by sub-regions, growth in Southern Africa averaged 5.4 % in 2006, and is projected to accelerate to 6.1% this year and 5.3% in 2008. Northern Africa experienced the highest growth of 6.3% on average in 2006 and central Africa the lowest at 3.9%.