Africa-Press – Namibia. LOW investment and falling gross capital formation from approximately N$6 billion at independence, peaking at N$47 billion in 2014, and which has since been declining and stood at N$21 billion in 2020, are some of the challenges Namibia is grappling with.
This was said by Bank of Namibia (BoN) governor, Johannes !Gawaxab, who called for more investments in Namibia’s economic activities.
He was speaking at during Innovation Investment Readiness Week last Friday, where he said low private sector participation, widening income inequality and increasing poverty are also issues faced by the country. These fuel the high unemployment rate, particularly among the youth, he said.
!Gawaxab said the country continues to observe a decrease in manufactured goods as a share of its exports and a constrained fiscal space and access to finance, land, and electricity are some of the key challenges firms face.
He also said despite a mature telecoms market, Namibia’s adoption of digital technologies is found wanting.
The entry of new operators into IT infrastructure and connectivity areas will enhance investments and technology to improve service quality, access, and affordability, he said.
!Gawaxab highlighted that the Covid-19 pandemic had worsened the country’s challenges, and the recent developments in the global economy, including the war in Ukraine, had heightened inflation globally and domestically.
“However, slow progress and traction on our development initiatives make us susceptible to shocks, reversing the gains we have made. This is a call to action and an imperative to scale up our efforts and build resilience,” he said.
He called for a paradigm shift in terms of approach to implementation and following through.
“We cannot grow the economy sustainably without a strong macro-economic foundation.
“Safeguarding macro-economic stability is therefore critical and of paramount importance to ensure that these efforts are enduring, sustainable and impactful,” he said.
!Gawaxab said the BoN had crafted a fintech regulatory framework focused on innovation, through which enterprises and individuals with innovative business concepts can present their ideas to the central bank for consideration against the relevant frameworks of the bank and incubation.
The BoN also embraced the fourth Industrial Revolution fully and established an Innovation hub to contribute to the digital transformation journey.
It is meant to leverage appropriate technologies to modernise the financial system and drive financial inclusion and economic development in Namibia.
!Gawaxab said as part of the paradigm shift, the private sector must be the engine for the country’s growth.
“There is the need therefore, to facilitate and ensure an enabling environment for the private sector, through appropriate policy and regulatory reforms, particularly on investment and finance,” he said.
Among the key things Namibia needs to do, is to pick up the pace of reforms, as circumstances and the environment are changing fast and there is a need to facilitate an environment that offers new investment and financial mechanisms.
“We need to scale up efforts to address high unemployment, particularly among our youth, tackle inequality, and secure our food and energy security. Similarly, we must build climate shock resilience,” he said.
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