Propel the Namibian economy

  By Abraham Shilomboleni

It is very important and indeed absolutely crucial to recognise that all economic growth takes place at a productive level of either an enterprise, or a government otherwise it is impossible to have a clear understanding of the growth process.

To further emphasise or elaborate on this given aspect I would say that, GDP is measured as the sum of the products produced in all counted economic activities of a country.

In many times it is measured at the level of final goods and services, but of course it incorporates all the value added stages of production and consumption during various economic stages that goes into those final products.

More often, in building national accounts, we count the value added by each activity along the way, thus catching all the various pieces that end up constituting the final product of the economy of a given country.

When there is an increase in national output or income this in the end gives us (higher real GDP).

The Namibian leadership, more especially the economic leadership and policymakers need to know that there are two main aspects of economic growth:

Aggregate demand (AD) and this mainly comprises of consumer spending, investment levels, government spending, exports-imports.

Aggregate supply (AS) and this as well comprises of productive capacity, the efficiency of economy, labour productivity.


Therefore to then increase economic growth in Namibia as a country we need to create and see a rise in demand and or an increase in productive capacity.

As I have indicated above with the two pivotal economic aspects being the aggregate demand and aggregate supply it is very important for Namibia a  country to have a deep look into these two economic aspects and put more weight on them by means of trying to influence the rate of economic growth through demand-side and supply-side policies.

These can be done in various already existing economical methodologies that are not limited to these below such as:

Expansionary in fiscal policies-These relates to cutting taxes to increase disposable income in order to best encourage spending. Nevertheless, lower taxes will indeed cause an increase in the budget deficit and will lead to higher borrowing costs at times.

Hence, the expansionary fiscal policy is most appropriate in a recession when there is a fall in consumer spending.

Expansionary in monetary policiesThis is usually done by the central bank in this case the Bank of Namibia by cutting interest rates which can help boost domestic demand.

Stability. A key function of the government is to provide economic and political stability which enables the usual economic activity to take place. Uncertainty and political tension can discourage investment and economic growth.

As a key function of government, a well-managed supply-side policies would yield Namibia a good economic stand if we increase investment in infrastructure, e.g. new roads, railways lines and broadband internet, increases productive capacity and reduces congestion.

Moreover privatisation and deregulation would also increase efficiency and productivity.


Growth in productive capacity which is aggregate supply, will also be great if we:

Improve technology developed by the private sector which enables higher labour productivity (e.g. development of computers enables greater productivity)

Improved management techniques which enable a more skilled workforce.

Improved education and training by both private sector and public sector

Investment in infrastructure, e.g. building new roads and train lines. This is mainly the responsibility of the government.

By providing basic levels of education and infrastructure the scope for higher growth rates is much higher.

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In addition, macroeconomic stability would involve a commitment to low inflation.

Low inflation would then create a climate where foreign investors have more confidence to invest in our country.

On the contrary, a high inflation can lead to devaluation of the currency and discourage foreign investment.

To create a low inflationary framework, it requires our government to:

Have effective monetary policies. Our central bank (BoN) should have the independence to control inflation through the use of favourable monetary policies.

As a country we should develop disciplined fiscal policies in order to avoid large budget deficits. Other policies for economic development could include these aspects that I indicated below such as:

Having an improved macroeconomic conditions that create a stable economic climate of low inflation and positive economic growth.

The need for creating free market supply-side policies that are indeed related to privatisation, deregulation, lower taxes, less regulation in order to best stimulate private sector investments and all related.

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Government interventions through intentional and targeted supply-side policies would create an increased spending on ‘public goods’ such as education, public transport and our healthcare.


Globally speaking, if you look at the current situation of China and India at the moment these countries both  have high rates of economic growth which is a good thing, but it is of an interesting concern that their economies could easily ‘overheat’ and cause inflationary pressures.

Therefore, in order to keep a lid on inflation is an important underlying factor in sustainable economic development.

Economic development implies an improvement in economic welfare through higher real GDP, but also through an improvement in other economic indicators, such as improved literacy, better infrastructure, reduced poverty and improved healthcare standards as I have indicated above or before.

Namibia being a developing country indeed with a developing economy, we would then need to as well concurrently apply these methodologies such as the diversification of economic activities as a way to promote economic development and also doing more on manufacturing and agriculture.

*Abraham Shilomboleni is an economic expert, who works for NUST; holds a bachelor’s degree in accountancy and studied both economics as an integral part of his studies. He is also the author of an economics book titled ‘Propel the Economy’ to be published soon. He has also written other books such as ‘The Total Wisdom’ which is an inspirational and motivational book.