Abraham Shilomboleni
Most countries have a central bank.
The central bank is the bank of all banks. The central bank should babysit the economy and help it grow. I am not saying it does not do so, but there is a need for an increased effort with targeted approaches to best aid and propel the Namibian economy.
I recognise the central bank and all its functionalities and the team it has to carry out its purpose but I think more and better can be done, especially in tough times such as the time at which the Namibian economy finds itself.
Various approaches will range from increased effort of policy
reviews, mitigation and implementation. One will argue and say that is not the purpose of the
central bank but I will put it to you that it is one of the many purposes of a central bank.
Today, the Namibian economy suffers from key important challenges that have hit consumers hard to the core. These challenges are such as the skyrocketing repo rates that are hitting consumers hard.
Commercial banks are reporting fortunes of profits in their financial statements and these profits stream from the veins of increased repo rates.
It is not a problem to a few but it is a problem to me and many others if we do not apply breaks to mitigate these adverse trends.
Lower interest rates increase spending, and people and businesses will have borrowing and spending power.
Provide liquidity assurance in needed cases and robustly regulate financial systems to maintain confidence in the financial system. I will leave this for another day.
There are many economic ways to curb inflation and create an economic balance of stand in an economy such as that of Namibia. The pegging of the Namibia dollar to the South African Rand to a 1:1 ratio cannot be used as an excuse that should create fear that every time an increase comes up, Namibia too should follow suit.
No, this should not be the case.
We can do a lot in a lot of ways if we stand up in the most strategic and economic ways by applying appropriate remedies and reviewing or setting up better economic policies and using them as leverage to best swift ourselves economically.
We create a moral hazard when a decision is taken and the cost is born by a third party, such as consumers about the rising cost of living relative to interest rates.
The Bank of Namibia released the Economic Outlook update for March 2023 with the domestic economy projected to grow by 3.0% in 2023 and by 2.9% in 2024.
Contrary to that, there are serious economic challenges that are hurting consumers that should be addressed.
*Abraham Shilomboleni holds a Bachelor’s Degree in Accountancy, of which Micro and Macroeconomics have formed as an integral part of his studies and career. He’s a pursuant of an Honors Degree in Business Management.