By the end of 2022, the average Namibian’s standard of living will be about 20% worse off than it was seven years ago, without even factoring in the adverse impact from Covid-19.
This is according to Professor Roman Grynberg, an economics lecturer at the University of Namibia who analysed the country’s GDP per capita figures and said government should be worried considering these figures have not yet included the severe impact of the global pandemic.
According to Grynberg, by end of 2020, GDP per capita was about US$5 312, “and current projections indicate that the decrease is yet to come, given the whole effect of the pandemic. In the next two years, it is estimated to fall to US$4 800”.
The gross domestic product per capita, or GDP per capita, is a measure of a country’s economic output that accounts for its number of people. It divides the country’s gross domestic product by its total population.
Grynberg added that the decline in these numbers is not due to Covid-19 alone, but the standard of living was decreasing long before the pandemic.
He noted that government needs to make sound economic decisions to help the economy that is reeling due to the effect of the pandemic.
“Small and medium-sized enterprises (SMEs) are vital to helping the economy in creating jobs, as currently, it seems like no government has any employment creation activities. Vaccine programmes should be a priority and also getting a travelling certification due to the importance of the tourism sector,” he advised.
Salomo Hei, the Head of Research at High
Economic Intelligence, said the decline in the standard of living in Namibia was contributed by inequality, unemployment and the general decline in the production capacity.
“We are in a difficult environment, and Namibians need to get the economy going. Fiscal buffers, to help the economy respond, are needed and people and businesses have to adapt to the new normal of living with the Covid-19 pandemic,” said Hei.
Hei added that he is concerned about how Namibia is managing the debt they are acquiring; “Responding through debt, and what is Namibia using it for, what economic activities were generated through the loans we got”?
According to the IMF, the Covid-19 crisis is set
to wipe out nearly 10 years of progress in development. Real GDP per capita in Africa was projected to contract by 5.4% in 2020.
This will bring the per capita GDP almost back to its level in 2010 for the region. “Covid-19 is set to increase extreme global poverty for the first time in decades, with 26 million to 39 million people thrusting into extreme poverty in sub-Saharan Africa alone.”