Political stability and sound economic management have helped anchor economic growth and poverty reduction in Namibia. Growth has not been accompanied by job creation, however, and extreme social and economic inequities inherited from apartheid persist despite generous spending on social programs. The country is also vulnerable to short- and long-term environmental shocks as all major sources of growth depend heavily on Namibia’s fragile ecosystem.
With a preliminary estimate of gross domestic product (GDP) growth of 4.5% in 2014, down from 5.1–5.2 recorded in recent years, the economy continues to grow faster than the 4.3% long-term trend. Low interest rates, fiscal stimulus, and unusually high foreign direct investment (FDI) in mining have resulted in a construction boom, fast household consumption growth, and solid growth in tradable services. Inflation remains low at 3.3% (year on year) in July 2015, a decline from the recent peak of 6.1% in June 2014 that was driven largely by falling world oil prices. However, unemployment remains stubbornly high, estimated at 28%, essentially where it has stood since the country’s independence in 1990.
Namibia has made significant progress in addressing many development challenges. Access to basic education, primary health care services, and safe water is high and growing. Gender equality is enshrined in law and supported by government policies.
Namibia has been a leader in the area of natural resource conservation, with 44% of total land under conservation in 2012, up from 15% in 1990, and the country’s entire 1,570 km coastline has protected status. Namibia maintains social safety net programs for its most vulnerable citizens, including the elderly, the disabled, orphans and war veterans, as well as national maternity and sick leave, and medical benefit programs to workers.
The ruling Southwest Africa People’s Organization (SWAPO) won the November 2014 general election, increasing the number of women in the National Assembly from 22% to 41%. President Geingob appointed Saara Kuugongelwa-Amadhila, former Minister of Finance, as the first female Prime Minister.
Namibia’s economic growth, prudent macroeconomic policies, and generous social programs have not generated the jobs needed to overcome the inequitable distributions of income and assets or raise living standards in rural areas and among the urban poor. At the top of the government’s agenda is bringing down the very high unemployment rate.
Electricity demand has been growing rapidly, pushed by urbanization and the mining sector. Long-term agreements to purchase electricity at favorable rates are expiring, and there is no significant new generation capacity since independence. Wholesale electricity prices have risen by double-digit rates in each of the past several years.
All major production sectors—mining, tourism, livestock and meat production, and fisheries—are vulnerable to external economic and ecological shocks. Foreign demand in each industry is cyclical, seasonal, or unpredictable, with downstream effects for employment, income, and government revenue. All face risks from climate change and/or other countries’ policies to address climate change.
Last Updated: Sep 23, 2015