Guest Contributor | Feb 21, 2024 | 0
Rising food and energy prices hampering economic recovery – !Gawanab
The prospects for a stronger recovery in growth are being dampened by rising food and energy prices, likely exacerbating unemployment, poverty, and inequality in the country, an executive said Thursday.
Increasing inflationary pressures are putting a strain on the local economy, as the cost of living has become a major concern for society’s most vulnerable members, who are disproportionately affected by increases in commodity prices, said Bank of Namibia Governor, Johannes !Gawaxab while addressing public enterprises CEO’s at the 7th Public Enterprise Chief Executive Officers Forum’s Annual General Meeting in Oranjemund.
According to Gawaxab, through the central bank’s monetary policy stance, one primary mandate is to contain inflation and ensure sustainable development.
“To protect the exchange rate’s peg to the Rand and to begin normalising interest rates, the Monetary Policy Committee raised the Repo rate by 25 basis points in February 2022 and another 25 basis points in April 2022,” he said, adding that this is likely to continue to protect the peg and prevent capital flight to other member states of the Common Monetary Area.
!Gawaxab said despite the escalating risks to the domestic economy, the central bank continues to forecast positive growth in 2022, fuelled by mineral exploration, diamond production, and the agriculture, forestry, and fishing industries.
“Despite challenges such as water supply constraints and higher input costs, the uranium mining sector is expected to grow at a healthy rate in 2023. Finally, growth in metal ores will be supported by increased output from the gold sub-sector, which accounts for the majority of metal ores,” he added.
In terms of the country’s economic recovery strategy, !Gawaxab said that the recent emphasis on attracting much needed Foreign Direct Investment should be accompanied by appropriate policies to create a business-friendly environment.