Erasmus Nekundi
Since the outbreak of Covid-19, we have experienced serious economic decline and uncertainties. We hoped for the better but our woes were prolonged by ongoing conflict between Russia and Ukraine, which has affected the world’s commodity and fuel supply chain.
Major economies are bearing the hard knocks, while many small ones are collapsing – a predicament causing distress and inflicting socio-economic pain to the livelihoods of millions of households.
As a country, we have a tough row to hoe. The repo rate, fuel price, and now Fitch downgrade? It is aggravating.
Significantly, our repo rate has since last year been on an upward trajectory. As a result, servicing our debts with the bank has become expensive. This has gotten some to ponder and ask why we are not unmarrying and setting our dollar free from the rand. But sanely, we know that a move like this will be unwise and can cost us highly. Hence, can’t even dare to take it.
Eyes and ears are on the big oil discovery in Namibia, and hopefully this discovery is not a curse, but rather a blessing that will ameliorate and get our economy out of the comma. I make mention of the oil discovery particularly because we are currently suffering of constant skyrocketing fuel prices. Today, due to high cost of fuel, grocery shopping for many is reduced to half-full a trolley. Our buying power is castrated and feeding our families is made difficult. We are reduced to spending on the essentials only. I mean, personally, I have since given up the leisure of taking Sundays late night drives because fuel is now too valuable a commodity to burn for pleasure. Oh dear-me, no more sausage, bacon, cheese and eggs for breakfast, because all that is now luxury.
Our economy is in the woods, and we have fallen even deeper in the gutter when the popular American Rating Agency, Fitch, downgraded our sovereign credit rating in June (2022). We got cut from “BB” to “BB-” status – making our country’s investment viability less attractive. Alas, this comes at a time when we are searching desperately for foreign investors.
The combination of the economic thuds that we have been and are still subjected to have raised the fear of a bleak future. So, is a bleak future imminent? Well, personally, although with not so much woema (confidence), I say no. I mean, we just discovered oil recently (though it might take some time before we reap the benefits) and for an optimistic mind, that should fairly revive any fading confidence and hope for the future. Yes, a meek sign of recession may be rearing its ugly head here and there; and even though we are in a dark economic abyss, we cannot despair. I mean, reports have just indicated that our economy grew by 5.3% (N$3 billion) between January and March this year; and despite analysts saying this growth could be short-lived, us we are optimistic (Namlish), because that is a glimpse of hope. Or is this optimism implausible?
To any degree at all, in order to formulate a more reliable perspective of whether what’s rising over the horizon is a bleak future or not and to be able to appreciate and understand the subject view in its entirety, a thorough reflection on analysis reports from bodies such as The World Bank, International Monetary Fund (IFM), African Development Bank (AFDB), and Bank of Namibia (BoN) is required.