• October 1st, 2020

Opinion - Economic resilience: An antidote for Covid-19 crisis

Economic resilience is defined by the United Nations as the policy-induced ability of an economy to withstand or recover from the effects of external shocks. In the other quarters, there is need for economies to implement policies that enhance the ability to resist vulnerabilities arising from economic openness.  The Namibian economy is not an exemption as it also operates as an open economy. The Covid-19 calamity has negated the global economic performance. Likewise, the local economy has been negatively affected due to the link between economies through world trade, economic integration and other international agreements. This necessitates the implementation and strengthening of policies designed to promote local economic activity. To begin with, the promotion of agricultural production is of paramount importance, more especially during the pandemic as the international food supply chain is disrupted by such catastrophes. Agricultural policy does not only improve food security but also enhances good nutritional status. The disturbed food supply chain could increase the vulnerability of many citizens to Covid-19 due to the possible shortage and price hike for citrus fruits, vegetables and others recommended by nutritional specialists like the World Health Organisation. All in all, local food production should be promoted in order to mitigate food shortage even when such shocks happen.  Moreover, there is a need to strengthen the implementation of the “growth at home strategy” as stipulated by the Ministry of Industrialisation and Trade. Due to the disruption of the supply chain, the economy can longer fully rely on international supply or imports to satisfy local needs. Policies that capacitate local industries to produce efficiently and competitively should be implemented with a jet light speed. Although, many local manufacturers have engaged in the sewing of face masks and sanitizers during Covid-19, there is more that needs to be done to promote local production and consumption. Equally important, the ease of doing business should be improved in order to promote local business development and have local solutions to local problems. 

In the final analysis, local supply side policies should be supplemented by income-stabilising policies to circumvent reductions in consumers’ purchasing power in the economy. The economy continues to experience a decline in income due to a sudden decrease in demand for factors of production. Apparent retrenchments and salary reductions have hit the consumers’ pockets. Projects available for investments are no longer lucrative due to the economic calamity, hence profits and returns shrink. There a need to stabilise income through social security protection and other stimulus packages. The Ministry of Finance, Social Security Commission and other institutions should be commended for their stimulus packages. However, more of such packages are encouraged to reduce the impact of Covid-19 on the economy.

Staff Reporter
2020-08-13 11:45:40 | 1 months ago

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