Thematic Focus for Bank of Namibia Symposium, 2002

A critical challenge facing Namibia is the need to raise the economy’s growth potential in order to reduce unemployment, raise standards of living to an acceptable level, and achieve a visible reduction in poverty. Namibia’s economic growth since the mid-1990s has not been satisfactory, averaging around 3.5% a year. According to a recent IMF report on Namibia, higher growth has been hindered by stagnant investment, a shortage of skilled workforce, and weak public enterprises.

 It has been proposed that the 2002 Annual Bank of Namibia symposium should focus on ‘raising investment and growth in Namibia’. The intention of this theme is to take stock of what has been the post-independence experience, in particular to examine those factors that hinder investment in Namibia, and to propose possible policy measures. The objective is to identify possible policy gaps in the country’s investment and growth strategy.

Symposium Papers

An Overview of Namibia’s Investment and Growth Performance, 1990 – 2001: This conference paper will review Namibia’s investment and growth performance since independence. It will serve as an introduction, reviewing policies to attract domestic and foreign investment, assessing their impact and highlighting the immense challenges to improve the situation.

By Ipumbu Shiimi

 Bank of Namibia

Industrial Policy, Trade Strategy and Growth in Namibia: Popular reasons advanced in public debate with respect to slow industrial growth in Namibia are the apparent lack of profitable investment opportunities and the relatively smallness of the domestic market. Clearly, industrialization offers substantial dynamic benefits that are important for changing the traditional structure of the economy. What is the state of industrial policy in Namibia and how can it be improved to support high economic growth? Is there room for infant industry protection? Empirical evidence supports the positive relationships between exports and industrialization, hence the policy prescription for an outward-oriented, export-led growth strategy. Is there a potential for export diversification in Namibia? Can an analysis of the country’s revealed comparative advantage be of use in shaping its growth promotion strategy? What are the possible incentives to promote non-traditional exports? The intention of this paper should be to identify possible policy gaps in the country’s industrial and trade strategy and whether there is a need for a paradigm shift.

By Dr. Carolyn Jenkins

 University of Oxford

Namibia’s Services Sector: Assessing its Growth Potential Traditionally, manufacturing has always been regarded as the engine of growth. Hence, attracting or protecting manufacturing investment has been a major preoccupation of many governments. This has, in some cases, undermined strategies to develop other sectors. While it is true that the manufacturing sector is generally the most dynamic part of the industrial sector, there are economies that have flourished, but with only modest manufacturing activity and robust quality services activity. Perhaps this realization needs to be more pronounced in the face of increasing global integration and technological progress. What is the case for Namibia? Can Namibia become a modern service economy? Does it have a comparative advantage in services? Can this comparative advantage be turned into a competitive advantage? What are the appropriate policies and strategies for developing the competitive advantage in the services sector?  For example, recent research suggests that growth in a number of countries have been boosted by an efficient and competitive system of telecommunications. On the surface, it can also be argued that most new jobs that are being created in Namibia are in the services sector. Is there a policy focus to support this trend?

By Dr. Patrick Asea

United Nations Economic Commission for Africa

Financing Growth in Namibia: Policies and Strategies.  This paper should be seen as an extension of last year’s conference, which reviewed the present structure of the Namibian financial system and how it could be improved to channel more funds to the productive sectors. This time, it is necessary to provide a critical examination of Namibia’s saving level. It is generally stated that Namibia has ample savings, but these saving are largely contractual. Is this the ‘right’ saving that are necessary for the stimulation of the type of investment that Namibia needs? Do we need different saving vehicles? How does the composition of Namibia’s saving compare to that of other countries, for example the Asian Tigers? What policies/strategies were put in place to mobilize saving in these countries?

By Dr. Meshack Tjirongo

 International Monetary Fund