By Tio Nakasole
As the saying goes, “Your input into the mix will determine the output.” The national interest has fluctuated with the recent announcement of a reduced repo rate.
On February 12, 2025, the Reserve Bank announced a 25-basis-point cut in the repo rate, setting the stage to support the domestic economy while safeguarding the peg between the Namibian dollar and the South African rand.
It is on record that in 2024, the domestic economy expanded, albeit at a slower pace than in 2023. The main drivers of this growth were the mining, electricity generation, wholesale and retail trade, tourism, communication, transport, and livestock market subsectors.
This confidence booster still has the potential to propel the Namibian economy to greater heights. However, amid the hope and hype of projected growth, certain shortcomings could hinder the domestic economy’s progress.
Recently, the country endured the withdrawal of the USAID programme, leaving many destitute and starving, further contributing to the skyrocketing unemployment rate. Additionally, South Africa, to which the Namibian dollar is pegged, continues to face the nightmare of U.S. embargoes and restrictive measures.
This ongoing uncertainty remains a significant concern for the future performance of economic indicators, as Namibia relies on South Africa for trade and investment.
Despite mechanisms in place to prevent economic stagnation, certain risks, if left unaddressed, could hinder economic performance. Given the circumstances, urgent attention is required to harness the role of investment in expanding domestic demand.
There is a need to maintain investment growth within reasonable bounds, optimize investment structures through possible incentives, overhaul investment systems and mechanisms, and improve investment quality and efficiency. These steps are crucial in ensuring that Vision 2030 does not become an unattainable goal.
As Namibia approaches March 21, 2025, when a new government will take office, it is imperative that projects currently under construction—such as the Green Scheme and Green Hydrogen initiatives—are strategically executed to boost domestic demand. Finalizing these projects while minimizing risks will ensure that the desired economic benefits are realized.
Namibia’s industrial policy serves as a foundational framework that integrates various economic policies to promote industries and companies domestically. Additionally, the policy is anchored in Vision 2030, which envisions Namibia as an industrialized, high-income nation by 2030.
With only four years remaining, some pessimists argue that this goal is merely a pipe dream. However, as time moves forward, greater investment must be directed towards projects that enhance people’s well-being, social programs, agriculture, rural development, scientific and technological innovations, and environmental protection, all while ensuring resource conservation.
From an investment perspective, each case must be handled on its own merits. As Mahatma Gandhi once said, “A nation’s greatness is measured by how it treats its weakest members.”
There is an urgent need to clearly redefine the scope of government investment, strengthen and standardize the supervision of local authority financial platforms, and mitigate investment risks on a monthly or quarterly basis. Investment in state-owned enterprises such as TransNamib must also be standardized, ensuring effective oversight of financial reporting and project implementation. The ultimate goal should be to maximize economic and social benefits.
You cannot expect to reap maize if you sow beans; therefore, every step in the economic process must be benchmarked against desired results. Undoubtedly, we no longer live in an era of the so-called “leisure-fire economic approach,” where one waits passively for economic growth. Instead, proactive measures must be taken to ensure progress while the sun still shines.
Given the current repo rate position, greater focus should be placed on promoting investment avenues, particularly in value addition, non-governmental investments in basic industries, infrastructure, public facilities, social programs, SMEs, and financial services.
The time for action is now.
*Tio Nakasole is an Economics Honors degree holder, MBA final student, and a Research Analyst at MONASA Advisory and Associates. The views expressed do not represent those of his employer. – theoerastus@gmail.com
