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The Bank of Namibia (BoN) has predicted that the local economy would grow by some N$13,5 billion at current prices this year – the bulk of which is expected to come from the tertiary sector.
This is contained in the bank’s February 2022 economic outlook, released yesterday.
According to this outlook, the Namibian economy is projected to grow by 3,4% in 2022 to N$195,1 billion, and to improve further in 2023 to reach N$209 billion.
The bank is more hopeful than the minister of finance, Iipumbu Shiimi, who last week, while tabling the 2022/23 national budget, said he expects the economy to grow by 2,9% in 2022, before accelerating further to 3,7% in 2023.
The bank said this would be mainly on the back of better growth prospects for the mining industry and most of the tertiary industries.
The tertiary sector is Namibia’s biggest driver of national output, pushing over N$100 billion into the economy every year.
For 2022, the central bank said this cluster of industries, such as wholesale and retail trade, repairs, financial and insurance services, real estate, public administration and defence would be responsible for economic activities worth N$114 billion.
The tertiary sector is followed by the primary sector – agriculture and mining – which is projected to produce N$38 billion.
The secondary sector, which is typically manufacturing, produces the lowest, with expected value creation only at N$31,1 billion.
This shows Namibia is a less industrialised nation, with an underdeveloped manufacturing sector, dominated by the extraction, agricultural, and service industries.
This type of economy is not sustainable, local economists Salomo Hei and Rowland Brown argued last week at the bank’s seminar in the capital.
At the same seminar, BoN governor Johanness !Gawaxab said Namibia is facing fundamental yet interrelated and self-reinforcing economic headwinds.
“The country faces the following challenges: growth, inclusion, fiscal sustainability and unemployment. The era of being bystanders in solving our challenges has long ended. Apportioning blame is neither helpful, nor will armchair criticism without offering practical solutions contribute to improving the quality of the lives of Namibians,” he said.
!Gawaxab said the time has come to pinpoint the source of uncertainty and bottlenecks preventing growth to get rid of them and galvanise the level of economic activity to restore growth through complementary policy intervention.
If correctly diagnosed and remedied, Namibia’s national output could be above N$200 billion by the end of this year, he said.
But these impediments, coupled with the Covid-19 pandemic, the possibility of a fluctuating rainfall pattern, high prices for energy products, and supply disruptions around the world could see the prospect of growth fading, the bank said.
On the global front, the bank said the global economy is projected to moderate during 2022 and 2023, following an estimated stronger growth in 2021.
Growth in sub-Saharan Africa is projected at 3,7% and 4% in 2022 and 2023, respectively.
The risks to the global outlook are mainly related to uncertainty regarding the Covid-19 outbreak, coupled with global supply chain disruptions.
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