Namibia’s economy is now in a state of depression following 10 quarters of consecutive negative growth, analysts said on Thursday.
The Namibia Statistics Agency (NSA) announced that the local economy had recorded a 10th straight quarter of negative growth after a contraction of 0.8 percent compared to a negative one percent in the same period of 2017.
The negative growth was mainly due to the mining, electricity and water and transport and communication sectors.
Declines were also witnessed in construction, wholesale and retail.
Economist Rowland Brown said the economy was now in a depression.
“It’s not a recession or a ‘technical recession’, but a depression. The initial slowdown was partially externally driven, but the current depression is our own fault. Investment has collapsed because of terrible, anti-business policies,” Brown said.
Another economist, Indileni Nanghonga, believes Namibia’s current economic situation is worse than officially stated, especially with job losses last year and this year, which she said had affected people’s spending power.
“The negative growth in the third quarter was not unexpected, most of the sectors are depressed,” she said. “Most sectors are flat.”
Analyst Rome Mostert also said Namibia’s economic crisis had deepened. “Recession deepens as the economy has now contracted for 10 straight quarters,” he said.
Economist Klaus Schade said much more needs to be done to improve the country’s competitiveness and its attitude towards investors.
“It takes by far too long to start a business. Reportedly, it took the investment into asparagus in the North West of Namibia two years to start going. The project only materialised because of the perseverance of the investor, not because of the support he received from Namibian institutions,” he said.
Schade said there is need to establish a one-stop-shop where investors can register with all institutions at once, adding that Namibia need to use ICT technology rather than paperwork.
He also said there was need for the government to increase policy certainty and finalise the policies that will have a strong impact on investor confidence - such as NEEEF, the Namibia Investment Promotion Act (NIPA) and resolutions of the land conference.
“We need to find compromises that will support our socio-economic development objectives and will create an attractive environment for investors.”
He also wants the government to address the huge wage bill in a more structured manner, adding that natural attrition will not result in a leaner and more efficient public service.
The economist further said the weaknesses of public enterprises need to be addressed, and accountability and transparency has to be increased.
Schade, however, sees the Namibian economy rebounding to positive growth in 2019.
“The construction sector will bounce back, among other because government is expected to increase the execution rate on capital projects that was held back this year because of challenges with the Central Procurement Board.”
He said the employment of more teachers by the ministry of education in 2019 should result in positive growth rates for the education sector.
“Growth in the construction sector and additional teachers will result in additional employment which will benefit the wholesale and retail trade sector.”
He also expects a stronger growth in construction-related manufacturing activities.
He further said the recent successful ICAO Security audit and renovation work at the Hosea Kutako International Airport should remove some uncertainties in the tourism sector and result in positive growth rate in hotels and restaurants as well as tourism related sectors such as transport, financial services and ICT.
Meanwhile, inflation figures released by the NSA on Thursday showed that inflation had jumped to 5.6 percent in November from 5.1 percent in October following increases in inflation for food and transport.
The quarter also recorded a trade deficit of N$3.3 billion, an improvement of 60 percent when compared to N$8.3 billion in the third quarter of 2017.
The reduced deficit was because exports grew by 56 percent, while imports went up by 16 percent.