Austerity for Namibia’s Working People?

Despite the theme of Namibia’s 2026 budget, ‘People, Productivity, Prudence’,’ it was certainly not transformational.

It remains trapped in neo-classical economics, focusing on fiscal restraint, low inflation and market-led development.

In other words, it’s still about subordination to the market. The obsession with balanced budgets and fiscal restraint is hardly evidence based but is ideological.

The other side of such an austerity budget in Namibia is revealed by, for example, the loss of millions from Namibian gold mines: the Capricorn Group making a N$5 million profit a day for six months, FirstRand Namibia’s profit of N$1.497 billion for the six months (that ended 31 December 2025) with earnings rising 15.3% year on year, etc.

Namibia is a wealthy country. And citizens are not less important than profits.

WHAT’S NEEDED?

Overcoming mass unemployment demands broader structural reforms. Bolder interventions are needed.

What was glaringly missing from the budget was a clear long-term economic transformation plan that includes industrialisation and large-scale investment in the social sector.

The country demands much higher economic growth. The country demands genuine transformation.

Industrialisation and value addition demand more aggressive strategies.

We need a people-centred productivity agenda for the diversification of the economy and a more radical approach to food sovereignty.

Finance minister Ericah Shafudah failed to provide details for the health and social sectors and neglected to include social cohesion and mental health in the economic planning.

Austerity means overcrowded public hospitals and schools, and a lack of nurses, teachers, and magistrates. The limited funding is only sealing cracks, not building capacity.

Meanwhile the municipal infrastructure worsens while the cost burden for citizens increases.

STAGNATION

The budget normalises stagnation but debt stabilisation without transformation entrenches inequality and provides no dignity for the unemployed.

It certainly doesn’t restructure the economy. What is the mandate for beneficiation? What about domestic manufacturing?

The finance minister was also silent about the transfer pricing manipulation in, for example, the gold industry.

What are we doing about capital flight? There was no mention of a wealth or windfall tax, while there is selective enforcement of tax.

The austerity of neoclassical economics is a mechanism of repression. It is not about fiscal responsibility.

Austerity keeps citizens indebted, forces the acceptance of low wages, and narrows the horizon of what feels possible for working people.

Influenced by neoclassical economics, the government’s macroeconomic policies have been disastrous and resulted in stagnation.

Neoclassical economics, for example, neglects to consider what is called sellers’ inflation, i.e. that in times of crises large corporations will increase their prices because of their market power.

This is crucial in understanding the cost-of-living crisis in Namibia as seen in the food and transportation sectors.

ECONOMIC DEMOCRACY

Neoclassical economics helps entrench an unjust economic system by trying to depoliticise economic decisions.

In her research on escaping the trap of capitalism, Italian economist Clara Mattei shows that austerity measures were designed to suppress alternatives to this destructive economic system and to entrench social class hierarchy.

Political choices are masked as economic necessity through technocratic institutions such as the Bank of Namibia.

This has contributed to financial instability.

If anything, a more interventionist Namibian state is needed that can challenge the orthodox fiscal and monetary constraints.

The country needs an economic framework that can protect democracy by challenging the material conditions that make authoritarian politics possible.

Democracy cannot survive if citizens cannot afford to live.

The country urgently needs an expansionary macroeconomic policy that can stimulate sustained growth of at least 5% or 6% – certainly not 2.9%.

Policies must prioritise employment, equity and inclusive development. This could be done through substantial public investment and deficit spending for full employment.

The state can spend its currency into existence. We can afford it if we can do it.

There should therefore be democratic control over finance and credit creation, not the current undemocratic situation where it is left in the hands of private banks.

GROWTH FOR ALL

There is an imperative need for windfall profit taxes on these corporations and strategic price controls.

According to German economist Isabella Weber, this is the essence of anti-fascist economics. Heterodox economics must return to the political economy, where ideas are understood in their historical and social context.

Namibia’s working people must challenge austerity or neo-fascist measures as a form of repressive politics. We need to grow the economy for all citizens.

We must prioritise human dignity and confront corporate power.

Economic policy should guarantee that citizens can meet basic needs – food, basic services, energy, healthcare, housing – without being at the mercy of corporate price-setting.

We need democratic, worker-centred economic models. Democracy must extend to the economy, not stop at the ballot box.
 

• The authors are members of the Marxist Group of Namibia.

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