Local economic analysts believe the reduction and proper implementation of policies should be revisited if Namibia eyes for any growth in the future. According to economist Rowland Brown, if Namibia wants to be more competitive in terms of investment, job creation, and government revenue growth, it needs fewer rules, or current rules to be materially more efficiently implemented.
“The former requires a swipe of a pen, the latter a complete change of administrative culture,” said Brown.
The Economic Association of Namibia (EAN) hosted a 2021 economic outlook last week, where First National Bank group economist, Ruusa Nandago, added that Namibia needs to ensure that businesses plan for long-term growth. “We need to build a very predictable environment for businesses and investors, and this can be achieved by removing policy and regulatory uncertainty in Namibia,” noted Nandago.
According to her, the country cannot rely on the government alone to stimulate the economy, saying government spending should be focused on providing a social safety net and improving public infrastructure in the country and for the businesses to do the rest.
“The government needs to improve institutional quality, by ensuring efficient governance to tackle things like corruption, poor public financial management, and procurement bottlenecks, because they affect the ability for the government to play in the economy,” said Nandago.
At the same occasion, Salomo Hei, the Head of Research at High Economic Intelligence, said looking at Namibia’s fiscal position, a lot has to be done by following global trends as other African countries are expected to record growth in 2021 after the impact of Covid-19 pandemic.
“Given the position we are in now, it will not be easy to attract foreign direct investment, so we need to look at responsible spending. Public investment could go a long way in getting Namibia out of the problem. Namibia needs to sit and consider what is it that can be done to give more muscles to public investment,” stated Hei.
According to the International Monetary Fund (IMF), while maintaining the focus on addressing the health emergency and providing lifelines for households and businesses, governments need to prepare economies for the transition to the post-Covid-19 world, including by helping people get back to work. The fund outlined that public investment has a central role to play in helping economies recover.
The IMF report shows that increasing public investment in advanced and emerging market economies could help revive economic activity from the sharpest and deepest global economic collapse in contemporary history.
It could also create millions of jobs directly in the short-term and millions more indirectly over a longer period.
“Increasing public investment by 1% of gross domestic product (GDP) could strengthen confidence in the recovery and boost GDP by 2.7%, private investment by 10%, and employment by 1.2% if investments are of high quality and if existing public and private debt burdens do not weaken the response of the private sector to the stimulus,” reads the IMF report.