Tio Erastus Nakasole
The economic suffocation of many developing countries has become rampant while some are grappling to locate tools in their toolbox that can unlock them out.
Researchers in the field of innovation and value addition’s findings are that new approaches to innovation in open economies such as Namibia, should encompass a new monetary growth mechanism. Innovation and value addition should be tailored towards output, employment, and exchange rate development to bring about national prosperity.
This can be culminated by identifying demands, matching macro and micro trends, developing competences and finding new ground for financial support for new inventions and at last pragmatically applying those inventions for better solutions.
In retrospect, after independence, for two and a half decades, Namibia succeeded in generating sustainable positive economic growth. This led to a steady rise in average incomes. Years later, in 2016 the growth has stalled, in other words gone into reverse. However, a narrow focus and wishful thinking any developing nation can have is by assuming that discovering new natural resources such as oil, energy, and gas will address economic challenges.
At the end of October, the Treasury announced that the economy in Namibia is projected to grow to 3.5% this year, before nosedive again to 2.9% in 2024. In terms of economic scales and natural dimension, Namibia is a small, upper-middle-income economy closely integrated to another upper-middle-income economy which is South Africa, with double commonalities: both members of SACU, where SA Rand remain a legal tender currency in Namibia.
The question is, with all this wobbling economic status going on, is natural resources a disguised curse? Einstein once said, “Insanity is doing the same thing over and over and expecting different results.”
Mirror on
As a frame of reflection, countries such as Japan and Singapore have no natural resources but are well known as wealthy nations. This is because their long term prosperity is not preserved by resources and wealth alone but have one of the very free trade, very low tariffs. It has been said by many economists that in countries such as Singapore, it is true natural resources are its people – in finding what best suits for their nation, maximising valuing and perfecting everything through their terms of trade agreement.
This just demonstrated to us, even in the absence of natural resources, innovation and value addition intensive states can create highly skilled jobs, more productive led export and enhanced competitiveness industries. Again, they are not in the business of repetition, or preserving but in exploring opportunities that maximise their output in an efficient and effective manner.
Don’t preserve
Most of the states swim against the tide of development as more of their population grow, instead of coming up with new ideas, technologies and economic growth-led activities, they continue to preserve the existing ones. This has already been tried, tested, and proven by the economies of scale, and you cannot afford to circumvent the wheel of diseconomies of scale as you will lose at the end of the day. Same way, to curtail some of the major challenges confronting the countries such as unemployment, poverty, and inequalities; the development and application of ideas and technologies are the baby any young state such as Namibia can undertake.
The plain fact is, a country alone cannot be self-sufficient by the number of natural resources, nor on relying on new projects that is anchored by a heavy exportation of raw goods and services, as this will forever build an emperor of reliance.
Eye mark
Skewed terms of trade and agreement can put the nation at the peril and pitfalls of growing their economies. Powerful conglomerate of franchise entities as well as multinationals will suffocate the existing Small, Micro, and Medium Enterprise operations if there are no proper controls placed squarely in place.
By the look of things, in every town (big or small) in Namibia, there is mushrooming of squatter camps and shanty towns whereby municipalities and local authorities struggle to formalise and grow them. This is because whenever you are on the receiving end or at the periphery where you are excluded on the dinner table of discussion to better yourself, by tooth and nail you resort to what keeps you alive. Therefore, a revisit of public policies such as monetary policy, tax policy, standard, procurement, regulatory policy, technical work force and market access that affect the rate of and capacity for SMEs innovation is paramount.
Innovation and value addition play a very prerogative role and are essential for economic progress as they benefit consumers, businesses, and the economy as a whole.
How does it play that role, how it does it contribute to economic growth and what can be done to promote it? One must be cognisant of the fact that development is a process same as where “one cannot expect to have a baby in one month by impregnating nine women”, but regardless of the timing lag that may be awkward at the onset to change the beginning, we can start somewhere in order to foster national prosperity and increase national access to the global economy in the end.
*Tio Erastus Nakasole is a final year MBA student at the NUST, a holder of Honours degree in Economics. He currently serves as the Sales and Service Manager at HiFi Corporation Namibia. The views expressed do not represent those of his employer. He can be reached at theoerastus@gmail.com