Finance minister confident Nam economy is on the right track

Home Business Finance minister confident Nam economy is on the right track


Finance Minister Calle Schlettwein is confident the Namibian economy is on the right track. This confidence, he said, sprouts from the fact that the private sector, civil society and external experts through bilateral and multilateral partnerships, as well as eminent economic experts, have given assurances that the country is correct in its approach and have embraced its development plans.

Delivering a message in parliament on Wednesday on the role of the State in the economy, Schlettwein said the extent to which government has played a meaningful role in the economy is evidenced in the track record of achievements recorded to date, developmental opportunities faced and the structural challenges confronted.

“On the economic front, we have been able to grow and cushion the economy from severe external shocks, thanks to government’s fiscal policy. As such, economic growth has averaged around 4.6 percent in the last 10 years, in spite of the severe effects stemming from the global financial crisis.

“The government has invested heavily in economic and other logistical infrastructure, which facilitate investment, trade and economic expansion and, therefore, the creation of jobs. We have grown incomes and closed the inequality gap by about 15 percentage points since independence,” Schlettwein explained.

He further noted that over one-quarter of the national budget is consistently allocated and spent on the social sectors of education and health, while poverty has been more than halved over the same period – from 69 percent in 1993 to less than 30 percent by 2010.

He also noted that Namibia is one of only three countries in the sub-Saharan African region that provides social safety nets to vulnerable members of society. These social safety nets, he said, serve as the first line of defense against poverty and vulnerability.
“These achievements were made mainly through the mobilisation of our own resources, given the record expansion of income to an upper middle-income country. Our budget is mainly funded from our own resources by about 98 percent, with grants only forming a small fraction of the budget.

“The government, therefore, believes that its developmental State role has delivered results in the core areas of socio-economic development. We do not believe in the by now widely discredited neoliberal economic thinking, which assumes that economic benefits will trickle down from the well-off to the poor, through the operations of the invisible hand in the economy,” said Schlettwein.

He said, going forward, Namibia has to step up efforts by implementing the Harambee Prosperity Plan and the long-term national development plans and Vision 2030.

Schlettwein continued that the Constitution specifies the role of a developmental State, as the role government should play to bring about accelerated social and economic transformation agenda.

“In the context of Namibia, this developmental State role is especially called for, given the lop-sided nature of our economy and the historical past of unequal distribution of resources, social and economic exclusion and the inability of the private sector to, on its own, and within a free market economy, grow the economy and, at the same time, address the economic and social disparities.