Promoting Sustainable and Inclusive Prosperity in Namibia

Aerial photo of Swakopmund, Namibia

The Growth Lab has been working with the Government of Namibia since 2020 on a project to disentangle the factors that inform Namibia’s economic prospects. The research outputs of this initiative may in turn contribute to the policymaking process in the country and inform policymakers abroad facing similar issues. The project covers a wide range of research activities, including but not limited to: understanding the drivers of macroeconomic sustainability, diagnosing the constraints to growth and identifying the most binding structural barriers preventing Namibia from realizing sustainable growth and diversification opportunities, studying inequality and labor market dynamics across the country, and analyzing the economic and export diversification opportunities by applying the framework of complexity analysis.

A generation into independence, Namibia displays significant progress towards long-term development. The country has made strides in overcoming a legacy of exclusion, biases in the development of state capabilities and access to public goods. Namibia has also established public institutions that increased civic engagement and participation; and achieved significant socio-political stability.

Namibia registered positive economic growth every year since its Independence in 1990, with the sole exception of 1993. In terms of GDP per capita, the first decade (1990-2000) recorded a moderately positive rate of growth (1.4% CAGR), but between 2000-2015, Namibia embarked upon a rapid growth acceleration, outperforming its African peers with an average annualized rate of growth per capita of 3.1%. During these fifteen years, poverty rates halved, and Namibia closed its income gap with South Africa by 45%, going from an income gap of 36% in 2000 to 20% in 2015. Household consumption per capita echoed the growth acceleration and expanded at a similar pace as GDP per capita. The growth acceleration was driven by the global commodity super cycle – which translated into favorable terms of trade, an investment boom in the mining industry, and exports coming from that sector.

However, by 2015, many of the factors behind the acceleration started to wane. The external shock of falling commodity prices, compounded with a plummeting of investment and a push for fiscal consolidation, leading to an overall contraction– Namibia contracted by 2.1% on average between 2015-2019.

By this point, at the beginning of 2020, Namibia was facing three concurrent structural challenges: reigniting economic growth, achieving a path towards fiscal sustainability, and effectively promoting pathways to opportunity for all its citizens. Onto this stage came the global pandemic of COVID-19, which only amplified these challenges and exposed the vulnerabilities in the economy.

The collaboration between the Growth Lab and the Government of Namibia aims to provide research-based inputs and active policy support that can inform policy approaches to address these structural challenges in an holistic fashion, in the global context of the post COVD-19 economic trends.

ATLAS OF ECONOMIC COMPLEXITY

Blue globe with Namibia highlighted in darker blueExplore Namibia's Country Profile

Namibia⁩ is ⁨an upper-middle-income⁩ country, ranking as the ⁨⁨73rd⁩ richest economy⁩ per capita out of 133 studied. ⁨Namibia⁩ ranks as the ⁨⁨81st⁩ most⁩ complex country in the Economic Complexity Index (ECI) ranking. Compared to a decade prior, ⁨Namibia's⁩ ⁨economy has become less complex, ⁩⁨worsening ⁩⁨⁨15⁩ positions in the ECI ranking⁩. Moving forward, ⁨Namibia⁩ is positioned to take advantage of ⁨few⁩ opportunities to diversify its production using its existing knowhow.

PROJECT DATES

May 2020 - May 2023

FUNDED BY

Government of Namibia

TEAM MEMBERS

Ricardo Hausmann

Ricardo Hausmann

Director, Growth Lab
Rafik Hariri Professor of the Practice of International Political Economy, HKS
Miguel Angel Santos

Miguel Angel Santos

Adjunct Lecturer in Public Policy, HKS
Director, Applied Research, Growth Lab
Jessie Lu headshot

Jessie Lu

Former Research Assistant, Growth Lab
Juan Paez

Juan Paez

Former Research Fellow, Growth Lab