The key fundamentals to Namibia’s economic recovery are economic confidence, investments and Covid-19 vaccination to return to normality. This is according to Governor of the Bank of Namibia, Johannes !Gawaxab, who last week hosted an economic roundtable discussion with chairpersons of board of directors and CEOs of private sector companies that mobilise investments and savings in the country.
“The most critical element that can be relied upon at this critical moment to help grow the Namibian economy is investments, both domestic and foreign direct investments. Therefore, concerted effort both from the public and private sector is needed to unlock the country’s investment potential,” said !Gawaxab.
Enumerating the challenge of reviving the economy, the governor emphasised that current weak growth being witnessed in the domestic economy is clearly reflected in four critical elements of the national income identity, namely consumption spending by households, which is constrained because of souring unemployment as a result of Covid-19 pandemic.
Government spending is equally constrained due to limited fiscal space. Net exports are also severely affected by global demand and low commodity prices.
Last week’s roundtable was described as an interactive platform, established by !Gawaxab, to discuss relevant policies to support the economic recovery with key institutions and entities, in order to find practical means of rallying support towards securing sustainable economic recovery. It is envisaged that such a coordinated approach is expected to yield a robust response to the anaemic economic growth experienced since 2016, and which has been exacerbated by the Covid-19 pandemic.
In his address to business leaders,!Gawaxab shared the economic outlook of the bank, which forecasts that the Namibian economy should recover gradually by 2,6% during 2021. This is predicated by the opening up of the global economy, after the lockdowns and restrictions on travel experienced in 2020 due to the Covid-19 pandemic.
In this regard, demand for Namibia’s exports (especially minerals) is expected to gradually start picking up in 2021 as major economies are projected to make full recoveries, which bodes well for the recovery of the domestic economy. While growth is expected to pick-up, the forecasted levels fall far short of the boom observed in the years prior to 2016 and is therefore not expected to be adequate to fulfil developmental aspirations and make a dent on unemployment, poverty and inequality.
The roundtable also discussed means of enhancing domestic investments in the country and how best to adapt the policy environment so that businesses are able to invest more or explore new opportunities within the economy.
The roundtable agreed that Namibia should pursue an aggressive economic turn-around strategy to enhance growth and income outcomes. The discussion will inform continuous efforts by the central bank to find practical and home-grown solutions to the structural challenges besetting the economy. -ebrandt@nepc.com.na