Namibia witnessed an improvement of over 1% in domestic economic growth in 2022.
According to the 2022 United Nations Namibia Country Report, the gross domestic product’s growth of 2.7% in 2021 to 3.9% in 2022 was attributed to the robust increase in diamond mining, as well as sustained growth for most industries in the secondary and tertiary sectors.
The UN reported that social sectors, particularly education and health, continued to receive the bulk of public resources at an estimated 46% of the national budget.
The budget for the financial year 2022/2023 had been themed “Reimaging, a Better Future for the Youth”, further directing the resources allocation to this key population group in the immediate post-Covid-19 recovery phase.
According to the report, the outbreak of the Russia-Ukraine war in February 2022 disrupted economic recovery and risks emanated from global oil and food price shocks, adding to financial burdens on already-pressured household budgets and corporates.
“The average inflation rose from 2.2% in 2020 to 3.6% in 2021 and 4.6% in 2022 through to 2023. Food price inflation on basic food staples worsened food in-security and transportation was a challenge, as the value of disposable income decreased and interest rates rose,” the UN report stated.
On the upside, mining production that is a traditional driver of growth almost doubled compared to initial forecasts.
Moreover, the UN highlighted that tertiary sectors of health and manufacturing also posted much higher growth rates than expected.
Additionally, Namibia launched the National Africa Continental Free Trade Area (AfCFTA) Implementation Strategy and Action Planin 2022, aimed at tapping into the benefits of global and regional trade, particularly following the removal of all Covid-19 restrictions.
“Investments have increased as Namibia commits to attracting foreign direct investment (FDI). FDI has increased by over 11.2%, partially driven by reinvestment of earnings by mining and financial companies, as well as renewable energy project investments, especially green hydrogen,” the report expanded.
Improved FDI inflows are also a result of intensive marketing of the country by the Namibia Investment Promotion and Development Board (NIPDB) to attract investors.
The UN said commitment towards trade strengthening was also witnessed through the work of the High-Value Fruits Productivity Taskforce and the Meat Value Chain which are aimed at addressing the constraints identified in private sector consultations.
Mobilising alternative sources of development finance has also borne fruit as international financial institutions have committed to financing, among others, climate action.
Following COP27, Namibia received a N$2 billion loan from Kreditanstalt für Wiederaufbau towards economic development programmes expected to create 350 jobs through water and road rehabilitation projects.
The Namibia Water Sector Support Programme(NWSSP ) is also funded by the African Development Bank.
The principal objectives of the NWSSP are to support sustainable production and consumption of water resources, sanitation facilities and promotion of hygiene good practices resulting in improved access to safe drinking water for human consumption and industrial use and improved food and nutrition security in the urban and rural areas in Namibia.
The programme includes three components, namely bulk water infrastructure development, rural water supply and sanitation including strengthening the water sanitation nutrition nexus and institutional strengthening, capacity building and programme management.