STAFF WRITER
Economist and Institute for Public Policy Research (IPPR) researcher Robin Sherbourne said Namibia’s private sector is not investing enough outside mining, raising concerns about the country’s ability to create the jobs needed to tackle unemployment.
Sherbourne was speaking last week at the release of the latest edition of the State of the Namibian Economy.
Sherbourne said private investment outside the extractive industries has been declining, warning that Namibia’s economy will not grow fast enough without stronger private-sector investment.
“Our private sector outside the extractive industry has been investing less and less over time. And that is my big concern. The economy will not grow unless you invest, unless the private sector invests, and it’s not doing so. And that should be the key question for policymakers,” he said.
His warning comes as Namibia continues to battle high unemployment, particularly among young people.
The Namibia Statistics Agency places the national unemployment rate at 36.9%.
Youth unemployment is even higher at 44.4%, meaning nearly one in every two young people participating in the labour market is without work.
Urban youth unemployment stands at 46.1%, compared with 41.3% in rural areas.
In Kavango East, youth unemployment reaches as high as 60.4%.
GROWTH TOO SLOW
Sherbourne said Namibia’s economy grew by an average of only 2.7% between 2010 and 2025.
He said this was not enough to make a meaningful dent in the country’s socio-economic problems.
“What strikes me is just how big private sector investment is compared to state-owned enterprises or government investment, yeah? And that’s normal. That would be the case in any market economy,” he said.
He added “Basically, if you want the economy to grow, you’re going to have to get your private sector to be investing, yeah? It’s not the government.”
Sherbourne also warned that the anticipated Final Investment Decisions by oil exploration companies would not result in immediate financial gains for Namibia.
SOES UNDER SCRUTINY
Sherbourne raised concerns about state-owned enterprises, particularly those that do not consistently publish annual reports.
He said this makes it difficult to scrutinise the subsidies they receive from the Treasury.
Of the 20 commercial SOEs monitored by Sherbourne during the past financial year, 10 did not consistently submit their annual reports.
He said Namibia needs to grow at a much faster rate to address its socio-economic challenges.
“An insufficiently attractive investment climate leads to low rates of private sector investment and Foreign Direct Investment (FDI) which leads to low growth, limited structural change and export diversification, resulting in insufficient job creation,” he said.
EU TRADE SUPPORTS 40,000 JOBS
Despite the concerns, Sherbourne said Namibia’s trade partnership with the European Union has created a significant number of jobs over the past 26 years.
“My conclusion was that, you know, at this point we don’t have perfect data, but over 40,000 jobs are generated by exports to the EU, especially in fishing,” he said.
He said this was more than the number of people employed in the uranium mining industry, which employs between 5,000 and 6,000 people.
“So what we export to the EU, what the EU exports to us, and what the balance of that is, we basically ran a trade surplus,” he said.
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