NAMIBIA
BY JONATHAN S SMITH
Repatriate Capital & Profits
Tap into the development cycle
S
ince independence, Namibia has pursued freemarket principles in an attempt to promote
both economic development and job creation.
In 1990, the Namibian government promulgated
the Foreign Investment Act, which Act, inter alia,
guarantees foreign investors against nationalisation
and permits the repatriation of capital and profits in
accordance with the rules of this Act.
Economy
Namibia’s economy is mostly primary sector based:
this means that most of Namibia’s gross domestic
product (GDP) is generated through the export sales
of mining, livestock and fish. Some industry has
developed over the years and, as a result, the tertiary
economic sector has played a role in f inancing
development and commercial property.
also means that fiscal policy (as opposed to monetary
policy) is used to promote economic growth. African
Economic Outlook’s prediction for Namibia’s GDP
growth during 2014 is 4.3%. This growth will mainly
be driven by construction projects in housing, a
container terminal in Walvis Bay and investment in
mining projects.
A fiscal deficit of 5.5% of GDP is anticipated for the
2014/5 fiscal year (which ends on 31 March, 2015)
and inf lation is approximately 6% at present. The
World Bank’s Doing Business report ranked Namibia
98 out of 189 as countries which foster private-sector
investment: Namibia was ranked 8th amongst the SubSaharan countries in Africa in report.
Namibia is a member of the Southern African
Development Community (SADC) but also, more
importantly, the South African Customs Union
(SACU). This means that no tariffs are applied to
imports between South Africa, Namibia, Botswana,
Lesotho and Swaziland.
The Namibian Dollar remains correlated to the
South African Rand which has benefitted Namibia
by its acceptance into the international economy but
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Challenges
However, one of the principle risks to the Namibian
economy is the present faltering South African
economy which suffered a 0.6% decline in GDP
growth during the first quarter of 2014: this will not
bode well for South Africa’s partners in SADC and
SACU as South Africa leads these economic clusters
as far as their exports are concerned.
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