The Bank of Namibia released the Economic Outlook update for March 2023, with the domestic economy projected to grow by 3% in 2023 and by 2.9% in 2024.
Contrary to that, there are serious economic challenges such as the need to close various major loopholes within the revenue- collecting agency such as tax evasions, less effective collection methods, and strengthening more comprehensive methodologies of collecting tax, especially from corporates and public companies.
These businesses carry out significant taxable transactions that are way capable of helping our economy grow if we get serious with our collection methodologies.
The methods of collection at the moment are way too weak, less effective, and hence NamRA can hardly collect what is due. We need to revisit these current tax collection methodologies, compare and contrast them, and if needed, we should emulate from other effective revenue agencies. Tax collection is the main source of revenue for government and if we are failing to collect it appropriately, we cannot in any way inject the desired funds into various national developmental economic sectors.
Other alternative approaches should be policies revamp, review and development. There are some current poor economic policies that are not befitting the new era that we are in today. Hence, they do not best feature in the interest of growing the economy desirably. Ineffective economic policies should be revamped and create what serves us best for our desired economic success.
Our debt-to-equity ratio is too high, and hence our government debt to GDP has reached 76% or above. To reduce this, we have to increase our revenue by closing the loopholes in the collection methods of tax. We should refrain from borrowing debt to pay debt. This act has never worked in any business entity that operates as a going concern.
In an attempt to swiftly stimulate our economy, we should plot, identify and inject the funds in the most relevant avenues of economic sectors that will yield a direct and favourable output. These capital injections should be able to project and bring tangible and measurable outputs that are evidently linked to employment-creation, both permanent and temporal, and value-addition within the supply chain of products and services. Economic diversification is key, but we need to lay out smart economic strategies in the spheres of green hydrogen, mining and other energy elements.
Today, the world talks energy, and Namibia should make smart partnerships with various captain of industries, and form long-lasting, high-yield, full economic agreements.
Agriculture should be supported immensely so that it in the end would engulf us with income streams, employment-creation and value-addition. This sector needs to be taken seriously, as it has the prime potential to grow our economy.
Currently, our economic standpoint is way bad, but we swim in a pool of resources that are at our handful disposal. We need to apply grease to our leadership, diversify the economy, create smart economic strategies, increase our revenue, reduce our debt and strengthen our economic management with skilled human capital in order to produce an economic desirable output for a long term.
*Abraham Shilomboleni holds a Bachelor’s Degree in Accounting. Abraham is an author, and a knowledgeable financial and economics expert.