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Economy of Namibia

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Economy of Namibia
Windhoek aerial.jpg
Windhoek, the economic centre of the Namibia
Currency
1 ZAR = 1 NAD
1 April – 31 March
Trade organisations
AU, AfCFTA, WTO, SADC, SACU
Statistics
GDP
  • Increase $13.824 billion (nominal, 2018 est.)[1]
  • Increase $27.106 billion (PPP, 2018 est.)[1]
GDP rank
GDP growth
  • 1.1% (2016) −0.9% (2017)
  • −0.1% (2018e) 0.9 (2019f)[2]
GDP per capita
  • Increase $5,726 (nominal, 2018 est.)[1]
  • Increase $11,228 (PPP, 2018 est.)[1]
GDP per capita rank
GDP by sector
  • 5.200% (2019 est.)[1]
  • 4.294% (2018 est.)[1]
  • 6.147% (2017)[1]
Population below poverty line
17.4% (2015, World Bank)[4]
59.1 high (2015, World Bank)[5]
Labour force
956,800 (2017 est.)[3]
Labour force by occupation
UnemploymentNegative increase 34% (2016 est.)[3]
Main industries
meatpacking, fish processing, dairy products, pasta, beverages; mining (diamonds, lead, zinc, tin, silver, tungsten, uranium, copper)
Decrease 107th (2019)[8]
External
ExportsDecrease $3.995 billion (2017 est.)[3]
Export goods
diamonds, copper, gold, zinc, lead, uranium; cattle, white fish and mollusks
Main export partners
ImportsDecrease $5.384 billion (2017 est.)[3]
Import goods
foodstuffs; petroleum products and fuel, machinery and equipment, chemicals
Main import partners
 South Africa 61.4% (2017)[3]
FDI stock
Increase −$438 million (2017 est.)[3]
Negative increase $7.969 billion (31 December 2017 est.)[3]
Public finances
Negative increase 41.3% of GDP (2017 est.)[3]
−5.5% (of GDP) (2017 est.)[3]
Revenues4.268 billion (2017 est.)[3]
Expenses5 billion (2017 est.)[3]
Economic aidrecipient: ODA, $160 million (2000)
Foreign reserves
Increase $2.432 billion (31 December 2017 est.)[3]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The Namibian economy has a modern market sector, which produces most of the country's wealth, and a traditional subsistence sector. Although the majority of the population engages in subsistence agriculture and herding, Namibia has more than 200,000 skilled workers and a considerable number of well-trained professionals and managerials.[9]

Overview[edit]

Namibia is a higher middle income country with an estimated annual GDP per capita of US$5,828 but has extreme inequalities in income distribution and standard of living.[10] It leads the list of countries by income inequality with a Gini coefficient of 59.7 (CIA)[11] and 74.3 (UN),[12] respectively.

Since independence, the Namibian Government has pursued free-market economic principles designed to promote commercial development and job creation to bring disadvantaged Namibians into the economic mainstream. To facilitate this goal, the government has actively courted donor assistance and foreign investment. The liberal Foreign Investment Act of 1990 provides guarantees against nationalisation, freedom to remit capital and profits, currency convertibility, and a process for settling disputes equitably. Namibia also is addressing the sensitive issue of agrarian land reform in a pragmatic manner. However, Government runs and owns a number of companies such as Air Namibia, Transnamib and NamPost, most of which need frequent financial assistance to stay afloat.[13][14]

The country's sophisticated formal economy is based on capital-intensive industry and farming. However, Namibia's economy is heavily dependent on the earnings generated from primary commodity exports in a few vital sectors, including minerals, especially diamonds, livestock, and fish. Furthermore, the Namibian economy remains integrated with the economy of South Africa, as the bulk of Namibia's imports originate there.

In 1993, Namibia became a signatory of the General Agreement on Tariffs and Trade (GATT) signatory, and the Minister of Trade and Industry represented Namibia at the Marrakech signing of the Uruguay Round Agreement in April 1994. Namibia also is a member of the International Monetary Fund and the World Bank, and has acceded to the European Union's Lomé Convention.

Regional integration[edit]

Given its small domestic market but favourable location and a superb transport and communications base, Namibia is a leading advocate of regional economic integration. In addition to its membership in the Southern African Development Community (SADC), Namibia presently belongs to the Southern African Customs Union (SACU) with South Africa, Botswana, Lesotho, and Swaziland. Within SACU, there is no customs on goods produced in, and being transported amidst, its members.[9][citation needed] Namibia is a net receiver of SACU revenues; they are estimated to contribute 13.9 billion NAD in 2012.[15]

The Namibian economy is closely linked to South Africa with the Namibian dollar pegged to the South African rand. Privatisation of several enterprises in coming years may stimulate long-run foreign investment, although with the trade union movement opposed, so far most politicians have been reluctant to advance the issue. In September 1993, Namibia introduced its own currency, the Namibia Dollar (N$), which is linked to the South African Rand at a fixed exchange rate of 1:1. There has been widespread acceptance of the Namibia Dollar throughout the country and, while Namibia remains a part of the Common Monetary Area, it now enjoys slightly more flexibility in monetary policy although interest rates have so far always moved very closely in line with the South African rates.

Namibia imports almost all of its goods from South Africa. Many exports likewise go to the South African market, or transit that country.[9] Namibia's exports consist mainly of diamonds and other minerals, fish products, beef and meat products, karakul sheep pelts, and light manufactures. In recent years, Namibia has accounted for about 5% of total SACU exports, and a slightly higher percentage of imports.

Namibia is seeking to diversify its trading relationships away from its heavy dependence on South African goods and services. Europe has become a leading market for Namibian fish and meat, while mining concerns in Namibia have purchased heavy equipment and machinery from Germany, the United Kingdom, the United States, and Canada. The Government of Namibia is making efforts to take advantage of the American-led African Growth and Opportunity Act (AGOA), which will provide preferential access to American markets for a long list of products. In the short term, Namibia is likely to see growth in the apparel manufacturing industry as a result of AGOA.

Data[edit]

The following table shows the main economic indicators in 1990–2017.[16]

Year 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GDP in $
(PPP) 		5.55 Bln. 7.60 Bln. 9.82 Bln. 13.92 Bln. 14.91 Bln. 15.87 Bln. 16.61 Bln. 16.78 Bln. 18.02 Bln. 19.32 Bln. 20.68 Bln. 22.19 Bln. 24.02 Bln. 25.74 Bln. 26.35 Bln. 26.51 Bln.
GDP per capita in $
(PPP) 		4,124 4,769 5,373 7,112 7,486 7,959 8,207 8,171 8,641 9,132 9,592 10,104 10,734 11,284 11,335 11,311
GDP growth
(real) 		... 4.1 % 3.5 % 4.7 % 3.9 % 3.6 % 2.7 % 0.3 % 6.0 % 5.1 % 5.0 % 5.6 % 6.4 % 6.0 % 1.1 % −1.2 %
Inflation
(in Percent) 		... 11.1 % 10.2 % 2.3 % 5.0 % 6.5 % 9.1 % 9.5 % 4.9 % 5.0 % 6.7 % 5.6 % 5.3 % 3.4 % 6.7 % 6.1 %
Government debt
(Percentage of GDP) 		... 20 % 21 % 27 % 25 % 19 % 19 % 16 % 16 % 27 % 25 % 25 % 25 % 40 % 45 % 46 %

Sectors[edit]

Namibia is heavily dependent on the extraction and processing of minerals for export. Taxes and royalties from mining account for 25% of its revenue.[17] The bulk of the revenue is created by diamond mining, which made up 7.2% of the 9.5% that mining contributes to Namibia's GDP in 2011.[18] Rich alluvial diamond deposits make Namibia a primary source for gem-quality diamonds. Namibia is a large exporter of uranium and over the years the mining industry has seen a decline in the international commodity prices such as uranium, which has led to the reason behind several uranium projects being abandoned. Experts say that the prices are expected to rise in the next 3 years because of an increase in nuclear activities from both Japan and China. The mining industry in Namibia is supposedly going to reach US1.79bn by the year 2018.[1][19]

Mining and energy[edit]

Main article: Mining in Namibia

Diamond production totalled 1.5 million carats (300 kg) in 2000, generating nearly $500 million in export earnings. Other important mineral resources are uranium, copper, lead, and zinc. The country also extracts gold, silver, tin, vanadium, semiprecious gemstones, tantalite, phosphate, sulphur, and mines salt.[9]

Namibia is the fourth-largest exporter of nonfuel minerals in Africa, the world's fifth-largest producer of uranium, and the producer of large quantities of lead, zinc, tin, silver, and tungsten. Namibia has two uranium mines that are capable of providing 10% of the world mining output.[2] The mining sector employs only about 3% of the population while about half of the population depends on subsistence agriculture for its livelihood. Namibia normally imports about 50% of its cereal requirements; in drought years food shortages are a major problem in rural areas.

During the pre-independence period, large areas of Namibia, including off-shore, were leased for oil prospecting. Some natural gas was discovered in 1974 in the Kudu Field off the mouth of the Orange River, but the extent of this find is only now being determined.

Agriculture[edit]

Main article: Agriculture in Namibia
Welcoming sign of the Burgsdorf-farm in Hardap.

About half of the population depends on agriculture (largely subsistence agriculture) for its livelihood, but Namibia must still import some of its food. Although per capita GDP is five times the per capita GDP of Africa's poorest countries, the majority of Namibia's people live in rural areas and exist on a subsistence way of life. Namibia has one of the highest rates of income inequality in the world, due in part to the fact that there is an urban economy and a more rural cash-less economy. The inequality figures thus take into account people who do not actually rely on the formal economy for their survival. Although arable land accounts for only 1% of Namibia, nearly half of the population is employed in agriculture.[20]

About 4,000, mostly white, commercial farmers own almost half of Namibia's arable land.[21] The governments of Germany and Britain will finance Namibia's land reform process, as Namibia plans to start expropriating land from white farmers to resettle landless black Namibians.[22]

Agreement has been reached on the privatisation of several more enterprises in coming years, with hopes that this will stimulate much needed foreign investment. However, reinvestment of environmentally derived capital has hobbled Namibian per capita income.[23] One of the fastest growing areas of economic development in Namibia is the growth of wildlife conservancies. These conservancies are particularly important to the rural generally unemployed population.

An aquifer called "Ohangwena II" has been discovered, capable of supplying the 800,000 people in the North for 400 years.[24] Experts estimate that Namibia has 7720 km3 of underground water.[25][26]

Fishing[edit]

The clean, cold South Atlantic waters off the coast of Namibia are home to some of the richest fishing grounds in the world, with the potential for sustainable yields of 1.5 million metric tonnes per year. Commercial fishing and fish processing is the fastest-growing sector of the Namibian economy in terms of employment, export earnings, and contribution to GDP.

The main species found in abundance off Namibia are pilchards (sardines), anchovy, hake, and horse mackerel. There also are smaller but significant quantities of sole, squid, deep-sea crab, rock lobster, and tuna.

At the time of independence, fish stocks had fallen to dangerously low levels, due to the lack of protection and conservation of the fisheries and the over-exploitation of these resources. This trend appears to have been halted and reversed since independence, as the Namibian Government is now pursuing a conservative resource management policy along with an aggressive fisheries enforcement campaign. The government seeks to develop fish-farming as an alternative.

Manufacturing and infrastructure[edit]

In 2000, Namibia's manufacturing sector contributed about 20% of GDP. Namibian manufacturing is inhibited by a small domestic market, dependence on imported goods, limited supply of local capital, widely dispersed population, small skilled labour force and high relative wage rates, and subsidised competition from South Africa.

Walvis Bay is a well-developed, deepwater port, and Namibia's fishing infrastructure is most heavily concentrated there. The Namibian Government expects Walvis Bay to become an important commercial gateway to the Southern African region.

Namibia also boasts world-class civil aviation facilities and an extensive, well-maintained land transportation network. Construction is underway on two new arteries—the Trans-Caprivi Highway and Trans-Kalahari Highway—which will open up the region's access to Walvis Bay.

The Walvis Bay Export Processing Zone operates in the key port of Walvis Bay.

Tourism[edit]

An example of Namibian wildlife, the Plains Zebra, one focus of tourism
Main article: Tourism in Namibia

Tourism is a major contributor (14.5%) to Namibia's GDP, creating tens of thousands of jobs (18.2% of all employment) directly or indirectly and servicing over a million tourists per annum.[27] The country is among the prime destinations in Africa and is known for ecotourism which features Namibia's extensive wildlife.[28]

There are many lodges and reserves to accommodate eco-tourists. Sport Hunting is also a large, and growing component of the Namibian economy, accounting for 14% of total tourism in the year 2000, or $19.6 million US dollars, with Namibia boasting numerous species sought after by international sport hunters.[29] In addition, extreme sports such as sandboarding, skydiving and 4x4ing have become popular, and many cities have companies that provide tours. The most visited places include the Caprivi Strip, Fish River Canyon, Sossusvlei, the Skeleton Coast Park, Sesriem, Etosha Pan and the coastal towns of Swakopmund, Walvis Bay and Lüderitz.[30]

Labour[edit]

While many Namibians are economically active in one form or another, the bulk of this activity is in the informal sector, primarily subsistence agriculture. A large number of Namibians seeking jobs in the formal sector are held back due to a lack of necessary skills or training. The government is aggressively pursuing education reform to overcome this problem.

Namibia has a high unemployment rate. "Strict unemployment" (people actively seeking a full-time job) stood at 20.2% in 1999, 21.9% in 2002, and spiraled to 29,4 per cent in 2008.[31] A 2012 study by the Namibia Statictics Agency (NSA) determined the rate of unemployment to be 27.4%. This study included subsistence farmers, work without pay, and any non-zero amount of weekly working hours, and did not count as unemployed people not actively seeking for a job.[32]

Under a much broader definition (including people that have given up searching for employment) two different studies determined the unemployment rate to be 36.7% (2004) and 51.2% (2008), respectively. This estimate considers people in the informal economy as employed. 72% of jobless people have been unemployed for two years or more. Labour and Social Welfare Minister Immanuel Ngatjizeko praised the 2008 study as "by far superior in scope and quality to any that has been available previously",[33] but its methodology has also received criticism.[31] The total number of formally employed people stood at 400,000 in 1997 and fell 330,000 in 2008, according to a government survey. The NSA 2012 study counted 396,000 formal employees. Of annually 25,000 school leavers only 8,000 gain formal employment—largely a result of a failed education system.[32][34]

Namibians in the informal sector as well as in low-paid jobs like homemakers, gardeners or factory workers are unlikely to be covered by medical aid or a pension fund. All in all only a quarter or the working population have medical aid, and about half have a pension fund.[35]

Namibia's largest trade union federation, the National Union of Namibian Workers (NUNW) represents workers organised into seven affiliated trade unions. NUNW maintains a close affiliation with the ruling SWAPO party.

Household wealth and income[edit]

In the financial year March 2009 – February 2010, every Namibian earned 15,000 N$ (roughly 2,000 US$) on average. Household income was dominated by wages (49.1%) and subsistence farming (23%), with further significant sources of income being business activities (8.1%, farming excluded), old-age pensions from government (9.9%), and cash remittance (2.9%). Commercial farming only contributed 0.6%.[36]

Every Namibian resident had on average 10,800 US$ of wealth accumulated in 2016, putting Namibia on third place in Africa. Individual wealth is, however, distributed very unequally; the country's Gini coefficient of 0.61 is one of the highest in the world. There are 3,300 US$-millionaires in Namibia, 1,400 of which live in the capital Windhoek.[37]

Namibian businesspeople[edit]

See also[edit]

Notes[edit]

  1. ^ about half of Namibia's people are unemployed while about two-thirds live in rural areas; roughly two-thirds of rural dwellers rely on subsistence agriculture[3]

References[edit]

 This article incorporates public domain material from the CIA World Factbook website https://www.cia.gov/library/publications/the-world-factbook/index.html.

  1. ^ a b c d e f g "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund. Retrieved 14 May 2019.
  2. ^ "Global Economic Prospects, June 2019: Heightened Tensions, Subdued Investment. p. 127" (PDF). openknowledge.worldbank.org. World Bank. Retrieved 11 July 2019.
  3. ^ a b c d e f g h i j k l m n o p q r "The World Factbook". CIA.gov. Central Intelligence Agency. Retrieved 28 March 2019.
  4. ^ "Poverty headcount ratio at national poverty lines (% of population)". data.worldbank.org. World Bank. Retrieved 28 March 2019.
  5. ^ "GINI index (World Bank estimate)". data.worldbank.org. World Bank. Retrieved 28 March 2019.
  6. ^ "Human Development Index 2018 Statistical Update". hdr.undp.org. United Nations Development Programme. Retrieved 6 July 2019.
  7. ^ "Inequality-adjusted Human Development Index". hdr.undp.org. United Nations Development Programme. Retrieved 6 July 2019.
  8. ^ "Ease of Doing Business in Namibia". Doingbusiness.org. Retrieved 24 November 2017.
  9. ^ a b c d "Namibia (04/95)". U.S. Department of State. Retrieved 2 June 2017.
  10. ^ "Independent Evaluation of the UNDP Country Programme Document" (doc). UNDP. Retrieved 7 July 2010.
  11. ^ Distribution of family income – Gini index, The World Factbook, CIA, updated on 18 April 2018.
  12. ^ A value of 0 represents absolute equality, and a value of 100 absolute inequality. Inequality in income or expenditure / Gini index Archived 12 October 2009 at the Wayback Machine, Human Development Report 2007/08, UNDP, accessed on 3 February 2008. Note: Because the underlying household surveys differ in method and in the type of data collected, the distribution data are not strictly comparable across countries.
  13. ^ "Government income from SOEs 2013/2014-2015-2016". Insight Namibia. April 2013. p. 21.
  14. ^ "Payments and transfers to SOEs 2013/2014-2015-2016". Insight Namibia. April 2013. p. 22.
  15. ^ Nyaungwa, Nyasha Francis (5 April 2012). "Domestic debt above N$17 bn". Namibia Economist. Archived from the original on 11 June 2012.
  16. ^ "Report for Selected Countries and Subjects". Retrieved 9 September 2018.
  17. ^ Mining In Namibia, NIED information sheet Archived 10 May 2011 at the Wayback Machine
  18. ^ Duddy, Jo-Maré (27 November 2012). "Mining remains gem of economy". The Namibian. Archived from the original on 11 January 2013.
  19. ^ Uranium
  20. ^ World Almanac. 2004.
  21. ^ LaFraniere, Sharon (25 December 2004) Tensions Simmer as Namibia Divides Its Farmland", The New York Times
  22. ^ "NAMIBIA: Key step in land reform completed". IRIN Africa. 1 October 2004. Retrieved 10 September 2013.
  23. ^ Lange, Glenn-marie (2004). "Wealth, Natural Capital, and Sustainable Development: Contrasting Examples from Botswana and Namibia". Environmental & Resource Economics. 29 (3): 257–83. doi:10.1007/s10640-004-4045-z.
  24. ^ McGrath, Matt (20 July 2012). "Vast aquifer found in Namibia could last for centuries". BBC World. Retrieved 10 September 2013.
  25. ^ McGrath, Matt (20 April 2012). "'Huge' water resource exists under Africa". BBC World Service. Retrieved 10 September 2013.
  26. ^ MacDonald AM, Bonsor HC, Dochartaigh BÉ, Taylor RG (2012). "Quantitative maps of groundwater resources in Africa". Environ. Res. Lett. 7 (2): 024009. CiteSeerX 10.1.1.693.4081. doi:10.1088/1748-9326/7/2/024009.
  27. ^ "A Framework/Model to Benchmark Tourism GDP in South Africa". Pan African Research & Investment Services. March 2010. p. 34. Archived from the original on 18 July 2010.
  28. ^ Hartman, Adam (30 September 2009). "Tourism in good shape – Minister". The Namibian.
  29. ^ Humavindu, Michael N.; Barnes, Jonothan I (October 2003). "Trophy Hunting in the Namibian Economy: An Assessment. Environmental Economics Unit, Directorate of Environmental Affairs, Ministry of Environment and Tourism, Namibia". South African Journal of Wildlife Research. 33 (2): 65–70.
  30. ^ "Namibia top tourist destinations". Namibiatourism.com.na. Archived from the original on 27 December 2016.
  31. ^ a b Ndjebela, Toivo (18 November 2011). "Mwinga speaks out on his findings". New Era. via allafrica.com. Archived from the original on 5 June 2016.
  32. ^ a b Steytler, John (April 2013). "The Namibia Labour Force Survey 2012 Report" (PDF). Namibia Statistics Agency. pp. vi, viii, 9, 11. Archived from the original (PDF) on 22 February 2014.
  33. ^ The Namibian 4 February 2010 Archived 9 February 2010 at the Wayback Machine "Half of all Namibians unemployed" by Jo-Mare Duddy
  34. ^ Ekongo, John (6 August 2010). "Namibians unemployable, say experts". New Era.
  35. ^ Kaira, Chamwe (27 May 2016). "Social Security pension, medical funds long way off". The Namibian. p. 19.
  36. ^ "Household Sources of Income". Insight Namibia. August 2012. p. 13.
  37. ^ Nakashole, Ndama (24 April 2017). "Namibians 3rd wealthiest people in Africa". The Namibian. p. 13.
  38. ^ "Laureate Ben Hauwanga | Junior Achievement Namibia". Ja-namibia.org. Retrieved 2 July 2012.
  39. ^ Frans Indongo Archived 22 July 2011 at the Wayback Machine at the Namibia Institute for Democracy, 2007
  40. ^ Schlechter, Deon (1 August 2002). "Harold Pupkewitz, grootste onder die grotes" [Harold Pupkewitz, biggest among the big]. Die Republikein (in Afrikaans).
  41. ^ Dierks, Klaus. "Biographies of Namibian Personalities, S". klausdierks.com. Retrieved 2 July 2012.

External links[edit]

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