Namibia has been ranked second in terms of income inequality, with an inequality index score of 59.1 according to a report by Rand Merchant Bank (RMB).
RMB’s “Where to Invest 2024” report highlights a dramatic widening of the gap between the rich and poor in Namibia, placing it second only to South Africa on the income inequality index.
“Namibia retains several troubling difficulties also entrenched in its southern neighbour. Both nations are among the world’s most extreme for inequality and unemployment,” the report said.
It further reported that the country’s unemployment rate had positioned it in the 27th place with a rate of 20.6% on the RMB Where to Invest in Africa model, surpassing South Africa by four positions. The report also added that both countries were grappling with entrenched inequality.
“To the investor, this may represent a low base with much to be gained if change is made,” the report stated.
Despite these challenges, Namibia has shown potential in other areas. It ranks as the 18th most attractive investment destination in Africa, according to the RMB, scoring -0.05.
While this places Namibia behind countries like Benin, Rwanda and Botswana, the report highlights strong fundamentals such as a sound GDP per capita, robust political stability, and high personal freedom as potential strengths.
The report cites the country’s emerging oil and gas industry could also significantly boost its investment attractiveness.
The country’s Orange Basin is considered one of the world’s most promising oil and gas regions, with the potential to transform Namibia into a petro-state.
“Namibia’s most exciting prospect lies in offshore oil and gas discoveries. In fact, the country’s Orange Basin is emerging as one of the world’s most promising prospective oil and gas regions and, as the Financial Times puts it, “could make it the world’s newest petro-state,” the report reads.
The report warns however that the successful commercialisation of these discoveries and the effective management of potential oil wealth through a sovereign wealth fund will be crucial factors in determining the country’s future economic trajectory.
