Namibian economy has steadily grown since 1990
By Timo Shihepo
WINDHOEK – Namibia celebrates 27 years of independence from apartheid South Africa on 21 March under the theme “United We Stand for the Love of Namibia”.
The main celebrations are set for Rundu, a town in Kavango East in the north-eastern part of the country, where President Hage Geingob is expected to deliver the keynote address.
Political stability and sound economic management have been the driving force behind Namibia’s successive social and economic growth since the southern African country attained independence on March 21, 1990.
During the first decade under the leadership of Founding President Sam Nujoma (1990-2005), the Namibia’s economic growth continued to improve, at an average rate of 3.5 percent.
It then rose to 4.6 percent in the second decade of independence and half way into the third decade the economy grew by 5.7 percent. The average economic growth rate between 1990 and 2015 is 4.4 percent.
The size and structure of the Namibian economy has increased significantly as well as income levels.
In 1990, the Gross Domestic Product (GDP) was a mere R5.5 billion. By 2015, the GDP had increased to R147.3 billion (26 times more than the 1990 figure). Similarly, per capita income increased from R2,425 in 1990 to R64,592 in 2015, a 30-fold increase.
Furthermore, in 1990 the country’s manufacturing sector was worth a paltry R298 million, but had grown to over R13 billion by 2015, representing a 44-fold increase.
The first-ever labour force survey conducted in 1997 indicated that only 300,000 people were employed, that figure has grown to 712,000 in 2014 from a population of 2.2 million.
Regarding government’s budgetary operations, the budget tabled in 1990-91 was a meagre R2.1 billion, but has grown to R57.54 billion in 2017/18. In 1990-91, total revenue collected was R2 billion, compared to projected revenue collection of R54.1 billion in 2016-17, which is expected to increase to R56.43 billion.
Even more insightful is the fact that in 1990-91, R240 million was allocated to capital projects, while in the 2016-17 financial year alone, R9.1 billion was spent on capital projects.
The country’s international reserves increased from a mere R211 million in 1990, to R23.6 billion at the end of 2015.
Ministry of Economic Planning has noted that this sustained strong economic growth shows that the country has created a strong foundation for future pursuance of economic development.
In order to sustain the economic growth, overseen by former Presidents Sam Nujoma and Hifikepunye Pohamba, incumbent President Hage Geingob launched a development blueprint in April 2016.
The Harambee Prosperity Plan is the implementation roadmap to fast-track the achievement of the country’s development goals and is earmarked to eradicate poverty by 2025. The four year-plans go hand in hand with the fourth National Development Plan (NDP4), and Vision 2030 earmarked to eradicate poverty by 2025.
Information from the Office of the Prime Minister also shows that Namibia has made significant inroads towards prosperity for all.
When the first comprehensive poverty count was undertaken in 1993-94 the poverty rate stood at 69 percent. It has since declined significantly to 29 percent in 2009-10.
Even more dramatic was poverty decline in regions such as Ohangwena, where shortly after independence close to 90 percent of the people living there was rated as poor. That means that 9 out of 10 inhabitants of Ohangwena were poor. By 2009/10, the poverty rate in Ohangwena had declined to 30 percent.
And in January 2017, according to the Gini coefficient, Namibia has made progress in reducing income inequalities and poverty levels amid the difficult economic conditions faced in the last five years.
According to the preliminary results for the 2015-16 financial year, Namibia’s Gini coefficient now stands at 0.572. This is a 25-point decrease in the index from the 0.597 recorded in the 2009-10 financial year.
The Gini coefficient is a world accepted standard to measure inequality of wealth distribution and poverty levels in any country. The higher the figure – closer to one – the more unequal the society while a lower figure – closer to zero – represents a society with the most equal wealth distribution.
“We have significantly expanded and improved on our social safety nets. At independence, the majority of our senior citizens were excluded from a descent old-age pension.
“Today, we have a coverage rate of close to 99 percent, meaning 99 out of every 100 senior citizens who qualify for old-age pension, receives an old-age pension,” said the Office of the Prime Minister report.
At independence, white Namibians’ old-age pension was seven times higher than black Namibians’, who received a paltry R75 per month.
Believing in equality, government opted to adjust old-age pension to R120 in 1994. In 2015, government increased the old-age pension by R400 to R1,000, and last year to R1,100.
In 2017, the old-age pension will be adjusted to R1,200.
“If this is not considered as progress, then I, honestly, do not know what progress is.
“Despite the economic challenges that affected not only Namibia but the whole world we have improved the economy,” Prime Minister Saara Kuugongelwa-Amadhila told The Southern Times.