CEO of the Namibia Investment Promotion and Development Board (NIPDB) Nangula Uaandja has cautioned that more needs to be done to encourage private sector investment in the country. In addition, she advised that government efforts must culminate in the facilitation of private sector investments.
She made these remarks last week while addressing the Economic Association of Namibia (EAN) annual conference on the potential for investments in the service sector. According to her, the private sector has the greatest potential to create value for both business and society in expanding economic opportunities.
“Business activities can create jobs and entrepreneurial opportunities, build human capital and physical infrastructure, generate revenue for government, and improve competitiveness in the economy. The private sector has a role to play not only by being a catalyst for economic growth and development, but also by working with government to implement policy through public private partnerships (PPPs),” explained Uaandja.
Furthermore, Uaandja said infrastructure services are essential to the development of other service sectors, including tourism, distribution (wholesale, retail), information and communications technology (ICT) services, and business process outsourcing services.
“For infrastructure services to contribute successfully to the economic and social development of Namibia, the institutional and regulatory environment must be supportive,” noted the NIPDB CEO.
She explained the service sector is a crucial component of every country’s economy and it has been identified as a sector with the capability to become a significant driver of sustained growth in Africa.
The service sector is currently one of the fastest growing sectors in the world. It accounts for a significant proportion of gross domestic product in most countries and makes significant contribution to the share of total employment.
Most importantly, Uaandja stressed a productive service sector is known to strengthen the performance of other sectors in the economy such as manufacturing: “This is because the sector enables and facilitates the functioning of most sectors like manufacturing and industrial sector, as most of these sectors rely majorly on the service sector to supply needed functions such as banking, accountancy, information, and technology.”
‘The service sector also influences the development of businesses by increasing productivity and value-added. This is attainable by using highly educated and experienced workers with particular cognitive skills, thus increasing the business productivity,” she added.
She stated many services have emerged as promising tradable for developing countries, particularly with the development of telecommunications and information and communications technology (ICT) services. In addition, she noted efficient services are catalysts for the expansion of regional and global value chains.
Identifying the types of service opportunities in Namibia, she stated business consulting, digital nomads, IT service provision, marketing, virtual assistant service, research service, traditional services.
On the same occasion, Principal Economist from Bank of Namibia, Reinhold Kamati, touched on the importance of services in driving growth of a small open economy. He noted that the industry remains the backbone of economic activity and has a bearing on social development in the country.
According to him, the services industry contributed around 60% to Namibia’s gross domestic product (GDP) in 2020.
“What does that mean in terms of jobs, income distribution and driving growth? The service sector does more in terms of employment and if we remove bottlenecks, such as income distribution in the sector, which is a thorny issue in Namibia, the sector will thrive. Some sub-sectors have the potential to generate growth, trade and employment opportunities in Namibia. So, more opportunities lie within the sector,” said Kamati.