Namibia: A Booming Economy, but Not for All; Namibia Is a Country of Contrasts, a Prosperous and Highly Developed Territory Living Cheek by Jowl with a Downside That Weakens All the Positives. Axaro Gurirab Reports

Article excerpt

A formal analysis of the Namibian economy creates the impression that it is well with our souls in the land of the brave. With a GDP per capita of US$1, 475, Namibia is ranked as a middle income country. In the context of the Southern African Development Community (SADC), Namibia comes in at fourth place, after South Africa, Mauritius and Botswana.

With an economic growth rate of close to 3% per annum, a low inflation rate and an exchange rate of just over N$7 for US$1, all these factors and more do indeed make Namibia look like an economic success story in the African context.

A breakdown of the GDP shows that the biggest contribution comes from the tertiary sector (services) with more than 50%, followed by the primary sector with about 25%, and the secondary sector (manufacturing) with 15%. The tertiary contribution is dominated by government services and wholesale, retail and repairs.

Typical of developing countries, the manufacturing sector is not well developed, and in order to beef up manufacturing and value-addition in general, the government launched the Export Processing Zone (EPZ) initiative in the mid-1990s, with tax holidays and other incentives, to attract foreign direct investment. One of the largest of such investments is by the Malaysian textile giant Ramatex, on the outskirts of the capital Windhoek, employing close to 8,000 Namibians.


The primary sector is dominated by mining, especially diamond and uranium mining. The De Beers clan is the dominant name in diamond mining, and has established a joint venture company with the government called NamDeb (short for Namibia De Beers). This is a similar model to Debswana in Botswana.

Thanks to rising uranium prices, production has had a new lease of life with two more uranium mines opening. Agriculture, especially livestock farming, is fairly vibrant, followed by fisheries. The sale of weaner calves reached record levels last year with more than 200,000 calves sold at record prices of close to US$2 per kilogram, mostly to South African feedlots.

With an annual capital development budget of over US$2bn, the government has spent considerable amounts of dollars to develop previously neglected areas. For instance, many clinics, schools and low-cost houses have been constructed. Equally impressive has been the commitment to rural electrification, tarring (bitumen standard) of streets in former black townships, light industrial parks and informal markets (locally known as omatala).

The government is acutely aware of the fact that a prosperous nation has to invest in its human resources, and thus education takes up approximately 25% of the annual budget. Hence, more than 90% of children of school-going age attend school, and the literacy rate has shot beyond 80%. The two major institutions of higher learning, namely the University of Namibia (UNAM) and the Polytechnic of Namibia (POLYTECH), have experienced a tremendous increase in their enrolment figures over the years. For the record, both institutions were created from scratch after independence.

In fact, the social sector makes up close to 50% of the national budget. The primary health care programme is quite successful, and several health centres continue to be set up all over the country. Despite this, however, a polio outbreak earlier this year set the country back in this regard, but the response of the government with regard to the nationwide immunisation campaign has been phenomenally successful. The outbreak is officially attributed to the poor living and sanitation conditions in the informal settlements (squatter camps).


There are other major development projects of note, such as the northern railway line, of which phase one, covering 250km, has already been completed under the almost personal supervision of founding president Sam Nujoma. This line will open up the northern parts of Namibia and will link up the country with its northern neighbour, Angola. …


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