Guest Contributor | Jul 29, 2020 | 0
Confidence in the local economy remains on a low and forecast for growth remains bearish – SSS
Despite the positive growth projection of 0.7% in 2019, confidence in the local economy remains on a low and forecast for growth remains bearish in most sectors during the first quarter of 2019.
According to the latest Quarterly Economics and Fixed Income report by Simonis Storms Securities, there has been contractions in some of the major contributors to GDP, with Fishing declining by 10.6% and wholesale and Retail trade dropping by 5.8%. Taxes on products has also declined as consumers remain under pressure and this is expected to continue to strain government revenue.
“During recessions, the economic theoretic steps to be taken are to reduce interest rates, increase government spending and reduce taxes. In Namibia, despite the deep recession, we are in an environment where fiscal and monetary policies cannot be adjusted to address the slowing growth. The reality is that Government is consolidating, further tax policies are being proposed and monetary policy is expected to tighten,” Simonis Storms stated.
The firm suggested that in order to recover the economy, government must remove policy uncertainties (land redistribution, NEEEF, Investment Promotion Act, Proposed Income Tax Amendments) to try and win back investors and investor confidence, adding that rent-seeking behaviour must be shackled.
“For this we need strong institutions, which in turn are made up of strong, efficient and effective people. Improving capital allocations, attracting talent and skills and applying harsh penalties to corruption and maltreatment of the country’s resources,” the firm added.