The Namibian government periodically sets policies as corrective measures for the volatile economy. It is imperative that policymakers encourage economic growth by implementing policies that promote investment, innovation, and entrepreneurship.
Thus, the government can help create a favourable business environment that encourages economic growth and job creation.
The recent shocks and rising geo-economic fragmentation test the resilience of policymakers to develop a systemic perspective on interconnected challenges with strategic partners and identify the analytical and policy tools needed. The policymakers have to govern, given that it is impossible to predict and prevent the consequences of all the risks faced by interconnected economics. The creation of effective policies should be supported by the application of good governance and a thorough understanding of the concept of leadership and holding the policymakers accountable. Hence, when policies fail, the costs can be significant.
The current policy process does not do enough to address our economic challenges. In addition, the current policies focused more on information management than knowledge management. The lawmakers are either encouraged to act as technocrats. A growth-oriented policy agenda must be accompanied by interventions that change how the benefits of growth are distributed and fundamentally transform the systems.
Policymaking is never a one-man show
The Ministry of Industrialisation and Trade is mandated to develop and manage Namibia’s economic regulatory framework and promote economic growth and development through the formulation and implementation of appropriate policies with the view to attract investment, increase trade, and develop and expand the country’s industrial base. The Ministry of International Relations and Cooperation is mandated by Article 96 of the Constitution to promote friendly and beneficial relations and cooperation with other nations and maintain the rule of law, peace, security, social justice, and economic welfare. We need to understand that all government ministries are important to enhance effective policies. We are going to look at these two ministries to support our economic arguments.
We live in a world that is constantly changing. The way we connect with others has changed and so has the way we view the global economy. We are now living in a global village. This means that there are no boundaries when it comes to communication and relationships. We can connect with anyone, anywhere in the world, at any time. With technology becoming more advanced and social media becoming more popular, the global village is only going to continue to grow.
So, what does this mean for Namibia’s economy now and in the future? And how do we make sure that everyone benefits from this growth?
Addressing our economic challenges requires an immediate focus on policies that will raise Namibia’s potential growth. A sustainable trajectory for the Namibian economy is one where reforms are implemented to raise Namibia’s potential growth rate. The government should urgently implement a reform that can boost Namibia’s growth in the short term, while also creating the conditions for higher long-term sustainable growth.
These growth reforms should promote economic transformation, support labour-intensive growth, and create a globally competitive economy. The current state of the Namibian economy is unsustainable. Low economic growth entrenches poverty and inequality. High-income inequality aggravates social fragmentation and poses a risk to economic growth. Inequality contributes to extremely divergent views, which make compromises difficult the resulting stalemate and policy uncertainty can contribute to economic weakness.
Furthermore, as an independent economics and business researcher, the United Kingdom (UK) and the United States of America (USA) new economic partnership draw my attention to view Namibia’s policies and, also what we can reform collectively.
International trade is essential
No country can produce everything it needs at reasonable prices within its borders. Instead, a country will be richer if it makes what it is best at and imports what it is not as efficient at producing. That idea is known as comparative advantage and is why Namibia, for instance, sells, copper, diamonds, and fish amongst other things, to countries around the world but imports products like petroleum oils, motor vehicles, and so on from elsewhere.
On 8 June 2023, prime minister Rishi Sunak and president Joe Biden agreed on an innovative economic partnership, which will see their countries work together more closely than ever before across the full spectrum of economic, technological, commercial, and trade relations.
A trading relationship worth £279 billion a year, and shared investment totaling over £1 trillion cemented their relationship. During the ceremony, the PM announced £14 billion of new US investment into the UK, demonstrating the importance of this relationship to UK growth and jobs. Another interesting fact, the Inflation Reduction Act provides a US$3 750 incentive for each vehicle, on conditions including that the critical minerals used in its products principally used in the battery are sourced from the US or a country with whom the US has a critical minerals agreement.
The economic trade agreement between UK and US which is a first-of-its-kind economic partnership is a long-term plan to protect their economies. The BRICS group of emerging markets is ramping up its bid for greater global influence and to challenge the US, sensing a moment to capitalize on a splintering world order to build out its ranks beyond Brazil, Russia, India, China, and South Africa. The BRICS efforts to strengthen collaboration, including on industrial development matters, while expected collective collaboration with Africa. Over time, however, if de-dollarization efforts gain traction, there could be implications for the US economy.
The BRICS continue to flex their muscles
A new agreement will promote the use of their own national currencies when trading with each other rather than the US, but what about the African Continental Free Trade Area (AfCFTA)? The AfCFTA significantly boosts intra-Africa trade, particularly trade in value-added production and trade across all sectors of Africa’s economy. The AfCFTA’s effective implementation has been elusive. Africans are to blame if others define and solve our problems - Rwanda’s Kagame.
In conclusion, the Namibia Investment Promotion and Development Board (NIPDB) should advise investors on policies for entering the Namibian market and establishing a business. The trade policy can play an important role in building and supporting economic resilience.
Therefore, policymakers should acknowledge that sound policies benefit countries as a whole but makes some citizens richer and others poorer. Revitalising consensus on policies among political parties and the public at large requires looking back, underlining the good things that policy has achieved; but also looking forward, devising new ways of making trade policies more inclusive and equitable for everyone.
* Josef Kefas Sheehama is an independent economics and business researcher.