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Economy stacks up well despite COVID-19 impact says central bank governor

Economy stacks up well despite COVID-19 impact says central bank governor

The Governor of the Bank of Namibia, Johannes !Gawaxab is confident that Namibia can rebound from the economic scarring from the COVID-19 pandemic.

He said this during a public lecture hosted at the University of Namibia campus in Keetmanshoop on 07 October, titled: ‘How Namibia Stacks Up amid the Impact of COVID-19’.

!Gawaxab made a compelling case for Namibia as a country endowed with natural beauty, diversity and resources. In this regard, he said, the country punches above its weight despite its relatively small size in terms of population on the African continent.

He said several indicators validate Namibia’s strong showing on metrics such as governance, competitiveness and overall development since independence.

!Gawaxab stated that Namibia made steady progress over the past three decades reducing income inequality and poverty while improving the quality of life for most Namibians.

However, the Covid-19 pandemic, the Governor warned, being a historic calamity of unprecedented proportion has the potential to wipe out the good progress on all fronts.

Overall, the country’s real GDP contracted by 8.5% in 2020, with the worst-hit sector hotels and restaurants, shrinking by 31.2%. The economy is only expected to recover gradually during 2021 by 1.4% then improve to a 3,4% growth rate in 2022.

Retrenchments and job losses, reported at 13 000 during 2020 and the first half of 2021, have seen Namibians being laid off as a direct consequence of the pandemic, exacerbating the precarious unemployment situation in the country. Job losses and reduced income have affected the ability of some owners to repay their instalment credit due to the prolonged weak economic environment, now worsened by the pandemic.

“Building on its strong points, Namibia can emerge from the constraints posed by Covid-19, and addressing its challenges with urgency and resolve, a return to vibrant growth is in sight. There are several promising projects and initiatives to reinvigorate growth, also here in the South, on the horizon. Continuous reforms and better macroeconomic management coupled with investments and adapting to a changing landscape are inevitable and crucial to secure a recovery going forward,” !Gawaxab said.

The Governor restated the central bank’s commitment to play its role in supporting growth through financial stability, well-contained inflation, and growth-supporting interest rates. However, he said, monetary and fiscal policies can only do so much, and the road to recovery is presently affected by slow uptake of vaccinations in some parts of the country, which impacts the country’s ability to resume economic activities.

!Gawaxab said that trivializing Covid-19 and vaccine hesitancy can be disastrous as the country is not out of the woods yet, adding that vaccination is a crucial element of reviving the economy.


 

About The Author

Donald Matthys

Donald Matthys has been part of the media fraternity since 2015. He has been working at the Namibia Economist for the past three years mainly covering business, tourism and agriculture. Donald occasionally refers to himself as a theatre maker and has staged two theatre plays so far. Follow him on twitter at @zuleitmatthys

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