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||This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (May 2007)|
|Economy of Namibia|
|Currency||Namibian dollar (NAD)|
|Fiscal year||1 April - 31 March|
|Trade organisations||WTO, SADC, SACU|
|GDP||$13.764 billion (2009 IMF)|
|GDP growth||-0.739% (2009 IMF)|
|GDP per capita||$6,610 (2009 IMF.)|
|GDP by sector||agriculture: 9.5%, mining: 12.4%, manufacturing: 15.4% (2007)|
|Inflation (CPI)||7.1% (2011)|
below poverty line
|34.9% of the population live on $1 per day and 55.8% live on $2 per day|
|Labour force||820,000 (2005 est.)|
|agriculture: 47%, industry: 20%, services: 33% (1999 est.)|
|Unemployment||52% (Broad Definition) (2008)|
|Main industries||meatpacking, fish processing, dairy products; mining (diamonds, lead, zinc, tin, silver, tungsten, uranium, copper)|
|Ease of Doing Business Rank||78th |
|Exports||$2.04 billion f.o.b. (2005 est.)|
|Export goods||diamonds, copper, gold, zinc, lead, uranium; cattle, processed fish, karakul skins|
|Main export partners||South Africa 33.4%, US 4% (2004)|
|Imports||$2.35 billion f.o.b. (2005 est.)|
|Import goods||foodstuffs; petroleum products and fuel, machinery and equipment, chemicals|
|Main import partners||South Africa 85.2%, US (2004)|
|Public debt||NAD 17.2 billion (March 2012)|
|Revenues||$1.945 billion (2005)|
|Expenses||$2.039 billion (2005)|
|Economic aid||recipient: ODA, $160 million (2000)|
|Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars
The Namibian economy has a modern market sector, which produces most of the country's wealth, and a traditional subsistence sector. Although the majority of the population engages in subsistence agriculture and herding, Namibia has more than 200,000 skilled workers, as well as a small, well-trained professional and managerial class.
Namibia is a low middle income country with an estimated annual GDP per capita of US$5,155 but has extreme inequalities in income distribution and standard of living. It leads the list of countries by income inequality with a Gini coefficient of 70.7 (CIA) and 74.3 (UN), respectively.
Since independence, the Namibian Government has pursued free-market economic principles designed to promote commercial development and job creation to bring disadvantaged Namibians into the economic mainstream. To facilitate this goal, the government has actively courted donor assistance and foreign investment. The liberal Foreign Investment Act of 1990 provides guarantees against nationalisation, freedom to remit capital and profits, currency convertibility, and a process for settling disputes equitably. Namibia also is addressing the sensitive issue of agrarian land reform in a pragmatic manner.
The country's sophisticated formal economy is based on capital-intensive industry and farming. However, Namibia's economy is heavily dependent on the earnings generated from primary commodity exports in a few vital sectors, including minerals, especially diamonds, livestock, and fish. Furthermore, the Namibian economy remains integrated with the economy of South Africa, as the bulk of Namibia's imports originate there.
In 1993, Namibia became a signatory of the General Agreement on Tariffs and Trade (GATT) signatory, and the Minister of Trade and Industry represented Namibia at the Marrakech signing of the Uruguay Round Agreement in April 1994 . Namibia also is a member of the International Monetary Fund and the World Bank, and has acceded to the European Union's Lomé Convention.
Given its small domestic market but favourable location and a superb transport and communications base, Namibia is a leading advocate of regional economic integration. In addition to its membership in the Southern African Development Community (SADC), Namibia presently belongs to the Southern African Customs Union (SACU) with South Africa, Botswana, Lesotho, and Swaziland. Within SACU, no tariffs exist on goods produced in and moving among the member countries. Namibia is a net receiver of SACU revenues; they are estimated to contribute 13.9 billion NAD in 2012.
The Namibian economy is closely linked to South Africa with the Namibian dollar pegged to the South African rand. Privatisation of several enterprises in coming years may stimulate long-run foreign investment, although with the trade union movement opposed, so far most politicians have been reluctant to advance the issue. In September 1993, Namibia introduced its own currency, the Namibia Dollar (N$), which is linked to the South African Rand at a fixed exchange rate of 1:1. There has been widespread acceptance of the Namibia Dollar throughout the country and, while Namibia remains a part of the Common Monetary Area, it now enjoys slightly more flexibility in monetary policy although interest rates have so far always moved very closely in line with the South African rates.
Ninety percent of Namibia's imports originate in South Africa, and many Namibian exports are destined for the South African market or transit that country. Namibia's exports consist mainly of diamonds and other minerals, fish products, beef and meat products, karakul sheep pelts, and light manufactures. In recent years, Namibia has accounted for about 5% of total SACU exports, and a slightly higher percentage of imports.
Namibia is seeking to diversify its trading relationships away from its heavy dependence on South African goods and services. Europe has become a leading market for Namibian fish and meat, while mining concerns in Namibia have purchased heavy equipment and machinery from Germany, the United Kingdom, the United States, and Canada. The Government of Namibia is making efforts to take advantage of the American-led African Growth and Opportunity Act (AGOA), which will provide preferential access to American markets for a long list of products. In the short term, Namibia is likely to see growth in the apparel manufacturing industry as a result of AGOA.
Namibia is heavily dependent on the extraction and processing of minerals for export. Taxes and royalties from mining account for 25% of its revenue. Rich alluvial diamond deposits make Namibia a primary source for gem-quality diamonds. Namibia is the fourth-largest exporter of nonfuel minerals in Africa, the world's fifth-largest producer of uranium, and the producer of large quantities of lead, zinc, tin, silver, and tungsten. The mining sector employs only about 3% of the population while about half of the population depends on subsistence agriculture for its livelihood. Namibia normally imports about 50% of its cereal requirements; in drought years food shortages are a major problem in rural areas.
Mining contributed 12.4% to GDP in 2007, of which diamond mining activities represented 5%. Diamond production totalled 1.5 million carats (300 kg) in 2000, generating nearly $500 million in export earnings. Other important mineral resources are uranium, copper, lead, and zinc. The country also is a source of gold, silver, tin, vanadium, semiprecious gemstones, tantalite, phosphate, sulfur, and salt.
During the pre-independence period, large areas of Namibia, including off-shore, were leased for oil prospecting. Some natural gas was discovered in 1974 in the Kudu Field off the mouth of the Orange River, but the extent of this find is only now being determined.
The clean, cold South Atlantic waters off the coast of Namibia are home to some of the richest fishing grounds in the world, with the potential for sustainable yields of 1.5 million metric tonnes per year. Commercial fishing and fish processing is the fastest-growing sector of the Namibian economy in terms of employment, export earnings, and contribution to GDP.
The main species found in abundance off Namibia are pilchards (sardines), anchovy, hake, and horse mackerel. There also are smaller but significant quantities of sole, squid, deep-sea crab, rock lobster, and tuna.
At the time of independence, fish stocks had fallen to dangerously low levels, due to the lack of protection and conservation of the fisheries and the over-exploitation of these resources. This trend appears to have been halted and reversed since independence, as the Namibian Government is now pursuing a conservative resource management policy along with an aggressive fisheries enforcement campaign. The government seeks to develop fish-farming as an alternative.
In 2000, Namibia's manufacturing sector contributed about 20% of GDP. Namibian manufacturing is inhibited by a small domestic market, dependence on imported goods, limited supply of local capital, widely dispersed population, small skilled labour force and high relative wage rates, and subsidised competition from South Africa.
Walvis Bay is a well-developed, deepwater port, and Namibia's fishing infrastructure is most heavily concentrated there. The Namibian Government expects Walvis Bay to become an important commercial gateway to the Southern African region.
Namibia also boasts world-class civil aviation facilities and an extensive, well-maintained land transportation network. Construction is underway on two new arteries—the Trans-Caprivi Highway and Trans-Kalahari Highway—which will open up the region's access to Walvis Bay.
While many Namibians are economically active in one form or another, the bulk of this activity is in the informal sector, primarily subsistence agriculture. A large number of Namibians seeking jobs in the formal sector are held back due to a lack of necessary skills or training. The government is aggressively pursuing education reform to overcome this problem.
Namibia has a high unemployment rate. "Strict unemployment" (people actively seeking a full time job) stood at 20.2% in 1999, 21.9% in 2002 and spiraled to 29,4 per cent in 2008. Under a broader definition (including people that have given up searching for employment) unemployment rose from 36.7% in 2004 to 51.2% in 2008. This estimate considers people in the informal economy as employed. 72% of jobless people have been unemployed for two years or more. Labour and Social Welfare Minister Immanuel Ngatjizeko praised the 2008 study as "by far superior in scope and quality to any that has been available previously", but its methodology has also received criticism.
The total number of formally employed people is decreasing steadily, from about 400,000 in 1997 to 330,000 in 2008, according to a government survey. Of annually 25,000 school leavers only 8,000 gain formal employment—largely a result of a failed education system
Namibia's largest trade union federation, the National Union of Namibian Workers (NUNW) represents workers organised into seven affiliated trade unions. NUNW maintains a close affiliation with the ruling SWAPO party.