Namibia will sustain an average economic growth of 3.76% per year for the next 8 years until 2026, according to a new report by Harvard University’s Center for International Development.
This is far ahead of other projections, particularly that of the IMF, which only expects 1.2% in 2018 and 3.3% next year. The World Bank sees growth of annual GDP growth at 1.5% in 2018 and 3% in 2020.
The report didn’t provide any details on Namibia’s economic growth case. It still lags behind projections for other African countries including Egypt with 6.63%, Tanzania 6.15%, Mali 5.89% and most notably Uganda with an expected annual economic growth of 7.49%
The ‘New Global Growth Projections’ report, released last week, found that after a decade of commodity and oil-driven economic growth, diversified economies are set to grow faster.
“After a decade of growth driven by record oil and commodity prices, the researchers find a landscape that has shifted in favor of more diversified economies. In sub-Saharan Africa, growth is shifting eastward from commodity-driven West Africa to East Africa, with Uganda, Tanzania (4th), andKenya (10th) in the top 10 predicted fastest growing countries globally for the coming decade,” stated the report.
It further noted that “these East African countries have seen labour shift out of farming into limited manufacturing sectors, as expressed in a more diversified export basket.”
“Far from an industrial revolution, structural change has been partial and piecemeal across these economies. Notably, a significant share of expected growth is driven by rapid population growth. This contrasts with Southeast Asia where growth has been realized in countries that have engaged in full structural transformation by diversifying production into more complex sectors,” the report indicated.
India and Uganda are set to be the fastest growing economies until 2026, with a 7.9% and 7.5% growth annually, respectively.
China will grow slower than India with 4.9% because it “has already realized many of the income gains from a diverse, complex economy,” the report found. Other first world countries such as the US and UK are set to grow by only 3.07% and 3.69% – with Germany only expect to grow a meagre 2.38%.
“The growth projections are based on Economic Complexity, a single measure of each country’s economy which captures the diversity and sophistication of the productive capabilities embedded in a country’s exports,” it said.
The report states that if low-income countries want to experience rapid growth, economic diversification and complexity is a necessity.
“Many low-income countries, including Bangladesh, Venezuela, and Angola have failed to diversify their-know-how and face low growth prospects,” Sebastian Bustos, a researcher in trade and economic complexity methods, said.
“Others like India, Turkey, and the Philippines have successfully added productive capabilities to enter new sectors and will drive growth over the coming decade.”
The World Bank says Namibia’s relatively strong economic growth has not been enough to deal with its levels of poverty, inequality, and unemployment.
According to the global bank, by the national poverty line (N$377.96), poor Namibians made up 28.7% of the total population in 2009/10, a drop of 9.0 percentage points from 37.7% in 2003/04.
The reduction was driven by gains in rural areas, it said.
By the international poverty line, 16.9% of the population lived on less than $1.90 a day in 2015, compared to 21.3% in 2010. In 2015, 39.0% lived below the $3.10 per day poverty line, compared to 44.3% in 2010. Namibia remains one of the most unequal countries in the world, with a Gini coefficient of 0.597 in 2010.