Bank of Namibia governor Johannes !Gawaxab on Thursday cautioned that the Namibian economy cannot afford another hard lockdown as this would be devastating for both jobs and businesses. He also referred to the country’s vaccination policy as an economic policy, stressing that economic recovery will require successful vaccination, meaningful and sustainable investments, as well as the stability of the financial sector.
Speaking during stakeholder engagements in the Erongo region, the central bank governor emphasised that correcting the negative economic effects of Covid-19 will take time. However, he was quick to point out that activities in mining and agriculture have started showing signs of recovery, while the tourism sector is still awaiting the return of international visitors.
According to !Gawaxab, for the domestic economy to revive on a long-term basis, import substitution, export promotion and investments should all be considered as feasible policy choices and be aggressively pursued. This includes providing as much assistance to local firms as possible through local procurement and the ethos of supporting Namibian products and services. This is in addition to policy recommendations such as the Harambee Prosperity Plan II, which he said must be executed with the appropriate urgency in order to achieve the much-needed economic recovery.
In terms of domestic economic challenges, which were exacerbated by the Covid-19 epidemic, !Gawaxab reminded stakeholders that Namibians, along with the rest of the world, have been through unprecedented and tough circumstances since the pandemic’s outbreak.
As a result, Namibia’s GDP shrank by 8% in 2021, eliminating jobs and hobbling businesses, while also putting pressure on government debt.
“While I share the plight of those demanding salary increases, my view and advice is that perhaps it is not the appropriate time to demand such as many corporates and the government are under severe Covid-19-induced financial strain. What we need to preoccupy ourselves with is to salvage the economy by prioritising vaccination across the country,” stressed !Gawaxab.
The governor recently met with stakeholders in the Erongo region during an engagement that included local leadership and the business community to discuss and exchange views on pressing economic matters facing that region and the country at large.
“Given the different operations in mining, the blue economy, logistics, services and tourism in the Erongo, the region has secured its place as a pillar of our economy, hence the engagement,” !Gawaxab explained.
He wrapped up the meeting by touching on the rise of unlawful financial schemes, and the public’s rising interest in investing in cryptocurrencies. According to him, illegal financial schemes, often known as pyramid schemes, have the potential to cause hardworking Namibians to lose their already limited financial resources.
On cryptocurrencies, the governor said “crypto assets are without fundamental value, are highly volatile, and lack transparency. The Bank does not recognise, support or recommend the possessing, utilisation and trading of cryptocurrencies in Namibia. As a result, members of the public who use these online-based platforms and instruments do so at their own risk, and have no recourse.” He, however, assured the public that the Bank is investigating crypto assets, and a further pronouncement will be made once this work is completed.