This time of the year is always an opportunity to reflect on what is most important.
For his part, president Hage Geingob has declared 2024 ‘The Year of Expectations’.
As Namibia heads towards general elections, there is pressure on political leaders to tackle economic challenges and implement policies that will deliver an inclusive and competitive economy.
The economy plays an important role in presidential and national assembly elections, as voters often determine their satisfaction with the incumbent administration based on perceptions of how well the economy is doing.
Unlocking big, bold investments can drive sustainable development and climate action and put the Namibia economy on a stronger growth path for all.
However, factors such as higher interest rates and increased unemployment contribute to the uncertainty surrounding Namibia’s economic trajectory.
To address these challenges, policymakers must focus on strategies to stimulate growth and reduce inequality.
Moreover, social rifts could increase ahead of the November elections and undermine momentum, given the heightened stakes of this year’s elections.
The economy will grow at a softer pace in 2024 and inflation will continue to eat into consumers’ pockets.
Economic growth is officially projected to contract by 0.5% in 2024, bringing it to 3,4% after a growth forecast of 3,9% in 2023.
The Africa Development Bank projected Namibia’s Real GDP to grow by 3.5% in 2023 and 3% in 2024 because of economic recovery, particularly in diamond processing and exports, as well as increased consumption in wholesale and retail trade and tourism.
The fiscal deficit is projected to decline.
The country’s trade balance deficit is still high despite an improvement in exports. Therefore, Namibia should consider implementing policies that promote domestic production and reduce reliance on imports.
In addition, the lack of sufficient, productive and decent jobs complicates efforts to end poverty.
The high public debt is an impediment to sustainable economic growth and employment creation.
The cost of servicing debt continues to crowd out fiscal resources that could have been invested in critical social services such as healthcare and education.
Pessimism about the outlook creates a downside risk for recovery and suggests policymakers should be wary of removing support measures too rapidly.
There has been improved spending in critical sectors such as education, healthcare and infrastructure.
The most important thing to keep in mind is that economic outcome variance globally has radically increased, fuelled by the war in Ukraine and Gaza.
Attaining economic prosperity in 2024 depends on the ability to formulate policies as a vehicle to upgrade the open markets.
Policymakers should work together and inspire action to meet Namibia’s commitment to leave no one behind in implementing the Sixth National Development Plan (NDP6).
It is imperative to reflect on previous NDPs’ shortcomings by coming up with well-researched and well-reasoned mechanisms that prioritise and synchronise activities to yield the desired results and avoid the economy faltering.
NDP6 could integrate the flexibility inherent in the informal sector into the formal sector – such as economic diversification, industrialisation, sustainable economic growth and investment – as well as social concerns like inequality, poverty, and well-being.
Linking informal targets and NDPs can provide a basis for inter-sectoral partnership during implementation.
We should look at our failures as a necessary stepping stone to achieve our desired goals, not as a deterrent to not try again.
Therefore, real solutions can’t come from the pessimists among us, but from those prepared to face the uncertainty of the future and willing to overcome the fear of failure.
The Industrial Policy should be revisited or reformed to incorporate the informal economy.
Current industrial policy narratives have tended to either neglect the informal economy or even view it as potentially threatening to the formal economy, needing elimination and control rather than support and investment for inclusive structural economic transformation.
Recognising the precarious nature of the informal economy has also brought attention to its resilience and creative energy to cope and adapt to change.
It is an untapped engine of innovation and growth worthy of policy attention, investment and support.
Oil discoveries in Namibia are likely to bring in an equivalent of N$53 billion in revenue for the state, a global consultancy group has estimated.
This will significantly improve energy security in a nation that relies heavily on petroleum imports.
The development of a consistent domestic energy supply will prove critical for the economy while reducing imports from neighbouring countries.
It is important to note that green hydrogen can create more space for renewables by driving electrolysis with energy that would otherwise be curtailed.
Namibia’s agricultural sector needs serious reforms and an increase in public investment.
To reach these goals, developing skills and knowledge is a key cross-cutting and value-adding strategy.
Globalisation means Namibia has to diversify its economy to be able to viably compete.
We are also living in a time of exciting technological innovations.
Namibia must realistically anticipate and be positioned to harness the opportunities of the Fourth Industrial Revolution (4IR) and adopt appropriate policies.
In conclusion, policymakers should look to build resilience and remain growth-minded despite a volatile economic backdrop.
More than ever, it’s important to be proactive, seek a better understanding of the outlook and discover how to turn potential pitfalls into prospects.
- Josef Kefas Sheehama is a business and economics researcher.
Stay informed with The Namibian – your source for credible journalism. Get in-depth reporting and opinions for only N$85 a month. Invest in journalism, invest in democracy –