By: Peneyambeko Jonas
“Why is it that other African countries are growing their economies through manufacturing, value addition and industrialisation, while Namibia continues to depend largely on importing finished products?”
Founder of Water Engineering Africa, Tangeni Nghiwewelekwa, posed this question during a discussion on the recent increase in the repo rate by the Bank of Namibia.
His remarks have reignited a broader conversation about Namibia’s economic structure, vulnerability to external shocks, and whether the country is doing enough to build industries able to withstand global uncertainties.
The Bank of Namibia recently increased the repo rate from 6.50% to 6.75%, citing the need to safeguard the Namibia Dollar’s peg to the South African Rand amid growing global economic uncertainty. While the decision may appear technical, its impact is felt directly by businesses and households across the country.
For many entrepreneurs, the increase means one thing: borrowing money has become more expensive.
Nghiwewelekwa argued that Namibia should focus more aggressively on local manufacturing and value addition to reduce its dependence on imports and strengthen economic resilience.
“We should be manufacturing more products locally, processing our raw materials here at home, expanding industries and exporting finished goods. That is how many African countries are growing their economies,” he said.
His comments come at a time when policymakers are increasingly concerned about the effects of external economic shocks on Namibia’s development ambitions under the Sixth National Development Plan (NDP 6).
The concerns raised by Nghiwewelekwa were echoed by local entrepreneur Taimi Shivute, founder of Tuno Foods and Tuno Events, who says the latest repo rate increase creates additional pressure on small businesses.
Speaking to Eagle Media House, Shivute explained that many entrepreneurs are becoming reluctant to take out loans because of the high interest costs attached to borrowing.
“We cannot afford to take loans for our businesses because of the high interest rates we are expected to pay back. As a result, we are forced to use our own savings or daily business profits to finance operations and expansion. The money that could have been invested elsewhere is now being used to keep the business running,” said Shivute.
According to Shivute, this limits business growth and makes it difficult for entrepreneurs to seize opportunities that require capital investment.
The repo rate is the interest rate at which commercial banks borrow money from the central bank. When that rate increases, banks often pass those costs on to consumers and businesses through higher lending rates.
This means higher repayments on loans, reduced borrowing, and potentially slower economic activity.
While businesses grapple with rising financing costs, economic experts warn that the issue extends beyond interest rates.
Financial expert, mathematician and computer scientist Samuel Nuugulu from UNAM believes “Namibia is one of the African countries whose economy is heavily affected by external shocks occurring in other parts of the world.”
He added that “If South Africa’s currency strengthens or weakens significantly, Namibia is affected because of the relationship between the two currencies. Government may then be forced to spend money that was never planned for in order to respond to those economic shocks.”
External economic shocks include events such as conflicts in the Middle East, rising global oil prices, supply chain disruptions, global recessions and other international developments that influence the cost of goods and services.
These shocks often force governments to divert resources away from planned development projects and towards emergency interventions.
Bank of Namibia Governor Ebson Uanguta recently warned that such developments could slow the implementation of NDP 6.
According to Uanguta, Namibia has clear development aspirations, but external events can create setbacks that force government to redirect resources.
In practical terms, funds originally intended for infrastructure development, schools, hospitals and other national priorities may instead be used to subsidise consumers, cushion the effects of inflation, or respond to economic crises.
This creates a difficult balancing act between protecting citizens from immediate economic hardship and investing in long-term development.
For a country pursuing ambitious goals of economic transformation, job creation and poverty reduction, the challenge is significant.
The growing concerns raised by entrepreneurs and economic experts point to a larger issue: Namibia’s need to build a stronger and more diversified economy.
As the repo rate increase continues to dominate economic discussions, many believe the solution lies not only in monetary policy, but also in accelerating industrialisation, supporting local manufacturing, promoting value addition and reducing reliance on imports.
For entrepreneurs like Nghiwewelekwa and Shivute, the debate is no longer simply about interest rates. It is about the kind of economy Namibia wants to build; one that remains vulnerable to global shocks, or one capable of creating sustainable growth from within.
