Finance Minister underlines need to diversify economic base

NAMIBIA’S under-developed economic base has been singled out as the most adverse contributor to the country’s sluggish economic growth.

Although forecast to increase to 3,8 per cent over the next year, up from 3,1 per cent in 2003, Finance Minister Saara Kuugongelwa-Amadhila said on Wednesday that there was enormous pressure to diversify markets and products as well as to strengthen industrial development. She said the status quo made the Namibian economy extremely vulnerable to external forces such as commodity prices.Kuugongelwa-Amadhila said Government was committed to creating a conducive environment to stimulate growth and employment.Taxation continues to be the country’s biggest source of revenue contributing to more than 90 per cent of total revenue during 2003-04.In light of this situation, Kuugongelwa-Amadhila said, her Ministry was working on sharpening revenue collection and clamping down on tax evaders.Much has remained unchanged in the development of Namibia’s economy since last year, with primary industries still being relied on for both job creation and contribution to national revenue.Over the next three years, about N$3,7 billion will be allocated to developing infrastructure which will lead to improved economic growth.Because secondary industries were under-developed, Kuugongelwa-Amadhila said value addition to exports was low which also limits the potential of creating much-needed employment opportunities.With Government’s earnings from the mining sector – especially the diamond industry – having plummeted over the past year because of the strengthening of the Namibian dollar against the US dollar, Kuugongelwa-Amadhila said a turnaround was expected following Samicor’s take-over of the Namco diamond company which was liquidated last year.Greater outputs from the zinc mining industry as well as higher international prices for the product are forecast to boost the State’s revenue from the mining sector during the next financial year.The agricultural sector also failed to produce much in respect of revenue this past year because of drought and falling beef prices in 2003.The Minister expressed optimism that the fishing sector would show greater improvements in 2004 than it did last year, in light of the recovery of stocks.She said the status quo made the Namibian economy extremely vulnerable to external forces such as commodity prices.Kuugongelwa-Amadhila said Government was committed to creating a conducive environment to stimulate growth and employment.Taxation continues to be the country’s biggest source of revenue contributing to more than 90 per cent of total revenue during 2003-04.In light of this situation, Kuugongelwa-Amadhila said, her Ministry was working on sharpening revenue collection and clamping down on tax evaders.Much has remained unchanged in the development of Namibia’s economy since last year, with primary industries still being relied on for both job creation and contribution to national revenue.Over the next three years, about N$3,7 billion will be allocated to developing infrastructure which will lead to improved economic growth.Because secondary industries were under-developed, Kuugongelwa-Amadhila said value addition to exports was low which also limits the potential of creating much-needed employment opportunities.With Government’s earnings from the mining sector – especially the diamond industry – having plummeted over the past year because of the strengthening of the Namibian dollar against the US dollar, Kuugongelwa-Amadhila said a turnaround was expected following Samicor’s take-over of the Namco diamond company which was liquidated last year.Greater outputs from the zinc mining industry as well as higher international prices for the product are forecast to boost the State’s revenue from the mining sector during the next financial year.The agricultural sector also failed to produce much in respect of revenue this past year because of drought and falling beef prices in 2003.The Minister expressed optimism that the fishing sector would show greater improvements in 2004 than it did last year, in light of the recovery of stocks.