Must businesss!!! Namibia has reacted well to external factors – Geingob
By Timo Shihepo
Windhoek – As commodity prices continue to tumble across the world, Namibia’s small, open and fragile economy continues to battle tough times but the country’s President Dr Hage Geingob said that the southern African nation has contained these external shocks very well.
Since 2015, Namibia’s economy has been performing way below expected levels, this is caused by the recent global economic downturn, which also affected many countries. These shocks include reduced international demand for commodities, a sharp depreciation in the exchange rate and reduced receipts from the SACU revenue.
As a result the Namibian government immediately instituted drastic expenditure measures to ensure fiscal stability. These drastic expenditure measures kept Namibia’s GDP at 40 percent, meaning the country’s debt ratio is well below the SADC regional sustainability benchmark of 60 percent.
Due to government’s drastic measures, Namibia’s overall balance sheet as depicted in the International Investment Position also shows a strong positive balance, due to huge contractual savings abroad.
Speaking at the International Conference for African European party dialogue of socialists and democrats in Windhoek this week, Geingob said it’s almost like some people, especially international ratings agencies, have turned a blind eye on these measures.
“Unfortunately these measures were not recognised by the proxies of ‘international capital’, namely the ratings agencies that downgraded the international issuance of Namibian bonds to sub-investment grade,” he said, adding that this was done despite the fact the bulk of Namibian debt is denominated in local currency, and that the country’s import coverage has almost doubled over the past year.
Geingob added that government has built solid governance architecture and has put in place all the necessary foundations to enable economic growth. The next frontier on government leadership, Geingob said, is to deliver on the promise of prosperity.
He acknowledged that the government would not be naïve and will not promise that each individual would be prosperous but they were determined to ensure that the playing field was levelled by providing fair opportunity for all and reducing the extremely high inequality gap.
He added that Namibia’s commitment to equity was not restricted to poverty and income measure as they believed that that gender equity was equally important for a stable and harmonious society.
Geingob also said that his government was devoted to fighting the inequality gap, which was rated among the highest in the world.
A century of colonial rule and apartheid concentrated Namibia’s wealth, including the ownership of land, in the hands of a white minority. The government is now coming up with a strategy to bridge this gap but it’s also mindful that it cannot allow an elite, white minority ownership of the economy to be replaced by few black Namibians.
“The stats of Namibia’s inequality among the highest in the world keep me awake at night as it is simply not acceptable. Inequality is the principal cause of the current economic flux that the world finds itself in. It is behind the rising levels of economic migration, terrorism, human trafficking and all other forms of international, organised crime,” Geingob said.