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Opinion - Time to innovate and reinvent local economy

2022-09-06  Josef Kefas Sheehama

Opinion - Time to innovate and reinvent local economy

The new normal will continue and accelerate the move towards digital spaces, which, without in-person interaction, are abstract and hard for many to grasp.

When we lost our physical nearness, we created emotional bridges that connected us in new and significant ways. 

It turns out that it took constrained distancing to bring out our most complete and true humankind.

The Namibia Statistics Agency released national account figures with revisions that pointed to more positive momentum in the economy. 

Namibia’s GDP increased to N$181.9 billion in 2021, compared to N$174.2 billion in 2020. 

The official figures show that for 2021, the GDP growth rate was estimated at 2.7%.

Whether growth picks up beyond a modest cyclical rebound will depend on the government’s ability to deliver against high expectations to reduce policy uncertainty and accelerate structural policies that can raise the growth potential of the Namibian economy more meaningfully. 

The most recent economic update simulates various reform scenarios and their impact on jobs, poverty and inequality. It holds some potentially good news for Namibia. 

We have also noted an annual growth of 14.3% in Gross Fixed Capital Formation recorded in 2021, compared to 13.4% in 2020. 

Furthermore, Namibia’s Private Consumption accounted for 75.1 % of its GDP in 2021, compared to the previous year. 

Private consumption includes all purchases made by consumers, such as food, housing and energy, among other things. 

It also includes durable goods, such as cars, but not households’ purchases of dwellings, which are counted as This means private consumption accounts for the largest part of GDP; it is the key engine that drives economic growth. 

Government spending is vital in influencing the economy, reduces by 0.30% in 2021, compared to expenditure levels in 2020. 

It forms aggregate demand in addition to household consumption, business investment and net exports. 

Thus, the changes will affect the When it increases, aggregate demand increases, and we expect the economy to grow higher. 

Conversely, when the government cuts its spending, aggregate demand declines – and so does the economy. Therefore, in response to the financial slowdown and its impact on the economy, the government plays a key role by increasing its spending in to boost economic growth. 

Going forward, I believe only businesses with the agility and adaptability to meet volume spikes, market changes and business disruptions will thrive in the new normal. 

At the same time, big players and agile innovators alike will need to balance technology adoption with creative approaches to maintain a sense of community and a shared culture. 

The competitive, technical economic and social environments are all in flux – and businesses need to quickly transform their operations to meet the new normal. 

This is also the time for businesses to think about the future of their businesses and, where possible, divest non-core or underperforming assets to structure their portfolios in a manner that reflects efficiency and value creation. 

This is a defining moment, which calls for Namibian companies to innovate and break new ground. 

The safety of employees should also be put on high priority to help them cope with the already difficult times. 

This is the time when a business can reinvent to better support customers, optimise for a digital future and become more agile in their operations. Change is always a big challenge – and more so an organisation’s preparedness and readiness to transform.

Additionally, there are several commonalities that present themselves to businesses of all sizes. 

The question to ask is: what are some of the major opportunities and shifts that will dominate the business landscape, and can organisations rise to take advantage of these evolving market dynamics? 

A diversification strategy could be a solution for your business. A sudden drop in the economy can potentially kill your business if it does not have contingencies in place for such situations. 

Your priority before any diversification should be to make your core business stable in terms of capital and resources. 

Your core business is what would fund the diversification for some time. Remember, even a well-established business can suffer if resources are spread too thin. 

So, management teams must not only have the responsibility but they must also be empowered to move things forward.

Moreover, economic control is not merely control of a sector of human life that can be separated from the rest; it is the control of the means for all our ends. 

Therefore, the National Development Plans are very important in redefining the future of Namibia’s Economic recovery and growth plan. 

Proper implementation of the National Development Plans would restructure the economy, and it could put the country onto a sustained higher growth path. 

We now need to look at public policies to ensure that these benefits become permanent. 

Having been catapulted into the digital future, we must make the most of this opportunity by doubling down on digital transformation. 

Investing in new digital capacities, infrastructures and technologies will be a key element of the recovery effort. 

We have gone through an accelerated digital learning cycle due to the pandemic. 

The government, by involving the private sector in the new normal, will have a partner that is focused on maximising profits from operating and maintaining the infrastructure. 

Furthermore, inflationary pressures are expected to rise in 2022; the Bank of Namibia will continue to tighten monetary policy, further tamping down inflation expectations. 

The fiscal deficit and public debt levels are expected to remain elevated as the government implements its ambitious economic recovery programme and limits the fiscal space needed for infrastructure and human capital investment.

To that end, in this time of unprecedented change, there is a very real element of societal transformation that we can expect, with a more direct impact on how we live and work. 

But adapting to this new normal requires a collaborative effort, which calls for unity between the private and government leaders. 

The question is: are we ready to be bold and take a long-term view to drive progress for a healthy, economic future? 

Therefore, the time to reinvent and innovate Namibia’s economy is now.

2022-09-06  Josef Kefas Sheehama

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