Economist Robin Sherbourne has warned that Namibia may already be showing signs of Dutch disease, even before the country begins oil production.
“Dutch disease may already be affecting our economy, even before we start producing oil. The private sector could be withering, and we haven’t even begun oil production yet. This is the classic case of Dutch disease, where resource sectors like oil and gas expand at the expense of other tradable parts of the economy. And since this is based on official data, it is a serious cause for concern,” he said.
Sherbourne noted that although overall fixed investment has increased since the COVID-19 pandemic, private sector investment outside of capital-intensive industries such as mining and oil remains on a long-term decline.
He also highlighted that the structure of the Namibian economy has seen little change since independence in 1990.
“Beyond this, we still export cattle, high-value meat products, beer, and other traditional goods. Economic policies have not identified new export products, which limits growth, incomes, and employment,” he said.
Sherbourne argued that the key issue is an unattractive investment climate, which is discouraging both domestic and foreign investors.
He said this is contributing to low private investment and weak foreign direct investment inflows, leading to slow economic growth, limited structural change and minimal export diversification.
According to him, this lack of investment is also constraining job creation, reinforcing the urgency of reforms to improve the investment environment.
