Namibia could have done much better

NAMIBIA’S economy has failed to perform as well as could have been expected and growth has been inhibited because of a myriad of political factors, an economic analyst has suggested.

The editor of the magazine Insight, Robin Sherbourne, told a Debt Relief and Development in Africa conference in Windhoek on Monday evening that despite having a number of economic positives at Independence, Namibia had not been able to use these to its benefit. He said the country could have been in a better position than it currently finds itself in.Although Namibia’s economy was not faring as poorly as those of other African nations, different choices could have led to better economic growth and prosperity.”For political reasons it is difficult for Namibia to follow correct policy measures.It is trapped in its history.It could have been quicker on its feet and nimbler.Its inability to take the right policy decisions, therefore, is because of its political history,” said Sherbourne.According to him, with the exception of a poorly educated population, Namibia had much in its favour which could have been the base of better economic performance.Namibia’s inherited debt from South Africa was written off soon after Independence, the country had good infrastructure, a functioning market economy, a liberal constitution, the highest foreign aid per capita of any other African nation and significant natural resources to get it started.But Government had failed to generate new jobs and 10 years later unemployment had grown from 19,1 per cent in 1991, to 31,1 per cent.Namibia also chose to increase public spending by bloating the civil service to provide much-needed jobs as a quick fix and as a means of racial rebalancing, and now spends most of its budget on salaries rather than development.Sherbourne said political correctness had prevented Namibia from making better economic policy choices.The lack of skills of many Namibians has meant that the rewards of being well-employed had only benefited a few.PROBLEMATIC REGULATIONS Nation-building efforts since Independence, Sherbourne said, had also resulted in the sidelining of foreigners to advise Government on better competition and trade policies.Stringent labour market regulations had made job creation more difficult, and Sherbourne noted that these regulations had also come about as a result of the politics of the country.Sherbourne concluded that an effective Government was critical to achieving economic success.During the conference, political analyst Joe Diescho said that Africa, including Namibia, could not expect to become more prosperous until it moved beyond the ideology that only liberation leaders could lead their countries.Despite starting with a virtually debt-free slate at Independence, Namibia has not managed to beat a yearly budget deficit, which it finances through borrowing.Spending has also constantly increased despite not having the money available to foot the costs and Government has failed to meet its debt target of 25 per cent of GDP.Its debt now stands at around 33 per cent of GDP – still far below many African countries that are riddled with even bigger debt.”Growth has been lacklustre.Namibia is rich in many aspects such as natural resources, but is poor in skills, dynamic entrepreneurs who can sell new products and services to a world market,” concluded Sherbourne.Sherbourne said there was no reason why a small economy such as Namibia could not be grown to be as successful as bigger economies, citing the tiny state of Luxembourg as an example.In his opinion, Namibia should focus on producing goods and offering services unique to the country.For example, he said, Namibia’s tourism potential was not being exploited fully.He said it was a misconception for Namibia to believe that it could only grow the economy significantly through manufacturing.The conference, during which delegates grappled with whether Africa could be considered poor or rich from both a political and an economic perspective, ended yesterday.He said the country could have been in a better position than it currently finds itself in.Although Namibia’s economy was not faring as poorly as those of other African nations, different choices could have led to better economic growth and prosperity.”For political reasons it is difficult for Namibia to follow correct policy measures.It is trapped in its history.It could have been quicker on its feet and nimbler.Its inability to take the right policy decisions, therefore, is because of its political history,” said Sherbourne.According to him, with the exception of a poorly educated population, Namibia had much in its favour which could have been the base of better economic performance.Namibia’s inherited debt from South Africa was written off soon after Independence, the country had good infrastructure, a functioning market economy, a liberal constitution, the highest foreign aid per capita of any other African nation and significant natural resources to get it started.But Government had failed to generate new jobs and 10 years later unemployment had grown from 19,1 per cent in 1991, to 31,1 per cent.Namibia also chose to increase public spending by bloating the civil service to provide much-needed jobs as a quick fix and as a means of racial rebalancing, and now spends most of its budget on salaries rather than development.Sherbourne said political correctness had prevented Namibia from making better economic policy choices.The lack of skills of many Namibians has meant that the rewards of being well-employed had only benefited a few.PROBLEMATIC REGULATIONS Nation-building efforts since Independence, Sherbourne said, had also resulted in the sidelining of foreigners to advise Government on better competition and trade policies.Stringent labour market regulations had made job creation more difficult, and Sherbourne noted that these regulations had also come about as a result of the politics of the country.Sherbourne concluded that an effective Government was critical to achieving economic success.During the conference, political analyst Joe Diescho said that Africa, including Namibia, could not expect to become more prosperous until it moved beyond the ideology that only liberation leaders could lead their countries.Despite starting with a virtually debt-free slate at Independence, Namibia has not managed to beat a yearly budget deficit, which it finances through borrowing.Spending has also constantly increased despite not having the money available to foot the costs and Government has failed to meet its debt target of 25 per cent of GDP.Its debt now stands at around 33 per cent of GDP – still far below many African countries that are riddled with even bigger debt.”Growth has been lacklustre.Namibia is rich in many aspects such as natural resources, but is poor in skills, dynamic entrepreneurs who can sell new products and services to a world market,” concluded Sherbourne.Sherbourne said there was no reason why a small economy such as Namibia could not be grown to be as successful as bigger economies, citing the tiny state of Luxembourg as an example.In his opinion, Namibia should focus on producing goods and offering services unique to the country.For example, he said, Namibia’s tourism potential was not being exploited fully.He said it was a misconception for Namibia to believe that it could only grow the economy significantly through manufacturing.The conference, during which delegates grappled with whether Africa could be considered poor or rich from both a political and an economic perspective, ended yesterday.