By:Mauricia Koopman
Prime Minister Saara Kuugongelwa-Amadhila says for the economy to thrive and optimise its contribution to job creation, financing is crucial.
Kuugongelwa-Amadhila was speaking at the Standard Bank African Central Bank conference which recently concluded in Johannesburg, South Africa.
She stated that the limited access to financial products and services is a key constraint to sustaining economic recovery on the African continent.
“Namibia therefore has determined access to finance as one of the key priority areas under its national policies,” she told the gathering.
She added that financial system must address the challenges that encroach on the efficiency of the financial markets and reconcile the need for increased dynamism and the necessary safeguard measures.
The Prime Minister said the economic rebound from the global Covid-19 pandemic and the blow of the escalated conflict in Europe have caused inflation to increase to levels that have not been seen in a long time in advanced and emerging market economies.
“In response the central banks have increased interest rates to contain inflation. A combination of higher interest rates and inflation has dampened the disposable incomes of both households and businesses, putting brakes on the economic growth momentum that began in 2021,” she remarked.
She encouraged regulators and Central banks in Africa to explore block chain technology, drive digitisation and leverage the new business models that are opening exciting possibilities for financial services and financial inclusion.
Kuugongelwa-Amadhila said the financial sector in Namibia has expressed interest in advancing digital ledger technology, on which a block chain has been built.
She added that such technology was driving the development of digital assets and the creation of platforms to deliver great value and revenue for businesses across the world.
These developments, she said, have caused many central banks to get onto the bandwagon and develop central bank digital currencies.
“This is in response to the fast-changing technological developments noted within the digital assets, payments and the finance space.”
Furthermore, the Prime Minister noted that the high debt and rising rates restricted economic policy in developing economies and drove low-income countries into default without any clear safety nets.
She expressed that sovereign defaults in countries with a high degree of dependence on external financing for investment could result in slower economic growth, affecting consumers and businesses.
However, she said the current economic landscape shows challenges and opportunities for the policy makers.
“Namibia for instance, despite an estimated improvement in growth during 2022, the impact on Namibia’s main economic challenges, namely poverty, inequality and unemployment remains inadequate and calls for concerted efforts to sustain and improve economic growth.”
Kuugongelwa-Amadhila mentioned that the discoveries of oil and the green hydrogen project in the country could emerge as potential avenues of economic opportunity for the region.
She thus suggested that Namibia and the Southern African region optimise its natural resources and ensure a smooth energy transition from fossils to renewables.
“Invest in skills development, technological progress and know-how agglomeration, which are fundamental to the process of structural transformation that characterises economic development,”she advised.
She also called for the reform of structures in institutions to enable growth, by leveraging assets and developing self-sustaining economies in municipalities, town and village councils.
“Remove rigidities, promote competition and inclusivity. Improving domestic resource mobilisation and specifically tax compliance.”
Kuugongelwa-Amadhila called on promoting and attracting foreign direct investment through properly designed incentives in exchange for jobs and export earnings.
“Promote and encourage private sector investments in high labour-absorptive sectors such as agriculture,”the Prime Ministersaid.
PM Says Access To Financing Crucial For A Thriving Economy
