#DevTalks: Confronting Post-COVID Macroeconomic Challenges in Namibia

The Growth Lab's "Development Talks" is a series of conversations with policymakers and academics working in international development. The seminar provides a platform for practitioners and researchers to discuss both the practice of development and analytical work centered on policy.

The end of the commodity super-cycle slowed growth in Namibia and the fiscal situation worsened with COVID-19. In this Development Talks Seminar, Ipumbu Shiimi, Namibia's Minister of Finance, discusses the growth challenges facing the country, including high poverty rates, inequality, and unemployment.


DISCLAIMER: This webinar transcript was loosely edited and there may be inaccuracies. 

Miguel Santos Let me first welcome everyone to the Development Talks of the Harvard Growth Lab. My name's Miguel Santos, director of Applied Research at the Growth Lab and I have the honor today to moderate this session called Confronting Post-COVID-19 Macroeconomic Challenges, which is something that my guest today has been doing for some time now. Ipumbu Shiimi, Minister of Finance of Namibia. We're very happy to have him today with us. He's been the Minister of Finance of Namibia since 2020. Before that, he served as governor of the Bank of Namibia for from 2010 to 2020 after a long career at the bank. He holds a Master of Science Degree in Financial Economics and a Postgraduate Diploma in Economic from the University of London. And he also holds a diploma in Foreign Trade and Management from Maastricht School of Management in the Netherlands and an honors degree in economics of the University of Western Cape in South Africa. He's also a Bachelor in Commerce, Economics, and Accounting at the University of the Western Cape. Before we start, the Growth Lab has had the pleasure of been working with the government of Namibia for 1.5 years and a half, so we agreed that I'll make before a first very short presentation to get everybody up to date with the situation in Namibia and the challenges the country is facing. And then we'll go. We are going to take it directly with the minister so far. I mean, Namibia, it's as many of you are aware, Namibia. It's a country that had gone from a colony in 1989 to a functioning, fully functioning democracy, as we can see here. The other country that went from colony to independence in this period is Eritrea. The country has been working since independence to strengthen its state, so state fragility indexes are going down, which in this chart mean are improving. These are the things economists don't. So I say fragility is going down, so the country is becoming stronger, stronger than. The state capacity has evolved significantly. Namibia enjoys a very fast growth acceleration period for 15 years since 2000 to 2015. That was driven by investments associated to natural resources within the context of the supercycle of commodities. The country grew to income per capita 58 percent in those 15 years, growing at a compounded annual growth rate of 3.4 per year. And he was not all. It was not all the boom in commodities. The country significantly increased its share of the world market in his for products and even managed to launch 19 new products in that period that increase the take on per capita and the amount of one hundred and eighty per capita and the end. In the meantime, and also since independence, but faster given the growth from 2000 onwards, social indicators like infant mortality decreased significantly. Life expectancy increase in parallel to GDP, school enrollment at all levels increased significantly. I mean, in tertiary education, it had jumped by a factor of 10. Since independence and it has great infrastructure, this and we have discovered and over the course of our work that infrastructure, quality of roads and ports are, it's one of the competitive advantages that Namibia enjoys. The country still has one of the highest income inequality in the world. You can see on the chart on the left, Namibia had a Gini coefficient by 2015, at the peak of the windfall that was among the highest in the world, just trailing South Africa. And it has also one of the lowest participation rates among peers and Hager's unemployment rate. So this is one of the most significant challenges the country is facing that most of the growth was recorded in industries that are not labor-intensive and therefore jobs didn't peak didn't pick up, and the period of growth ended as the super committee cycle ended. So the investment boom in Namibia stopped in 2014. This is not a Namibian phenomenon. Here we can see the countries receiving investments in extractive sectors experienced a significant down downward trend in investment and that meant for Namibia a slowdown in the grades of growth since 2015. And that was when where the country was when COVID 19 hit. Of course, as commodities came down, the country was forced to made a significant fiscal adjustment. So public expenditures came down from 2015 to 2020 by six percentage points of GDP. That's a massive fiscal adjustment. Primary deficits came very close to zero. The difference being that the increase in interest payments but COVID 19 forced the country to implement an aggressive response to fight that face the shock that brought the deficit back almost to the level where it was before the fiscal adjustment. So now Namibia is slowly starting to consolidate its fiscal accounts again. The country has a lot of credibility on the international community and entered on the RFI program with the IMF and IMF authorities, and it's a perception of many in the development world that it's in track in spite of their persistent fiscal deficits that are the aftermath of the COVID shock. The country has a plan to bring fiscal sustainability back, so those are the three challenges that Namibia is facing. It's facing a growth challenge because growth slowed down in 2015 and took a deep dove on COVID and the COVID crisis and inclusion challenge. Because even at the peak of the windfall, the country still had the second-largest inequality rate in the world. Very low labor market participation and the country has a fiscal challenge because, yeah, the COVID 19 response brought the level of fiscal deficit back to where it was before the adjustment. So the challenge for Namibia, and that's what we're going to talk about with the minister today is how do you improve along one or two of these dimensions without deteriorating the others at the same time? Or if you one, are there any measures and policies that can hit these three dimensions at the time? So that's a that's a setting. Minister, we're very happy to have you. I know you are charging people that call your minister a rate of one U.S. dollar for every time. But for the purpose of these talks, I'm going to call you minister throughout, and that's how we get started. So we wanted to hear about your experience. Is Namibia now. How are you feeling what has been really hard of going through this crisis? And I had a question as well. Is there anything that has been a positive surprise? Is there any factor that reacted in a more positive way than you expected, any help you got from the international community? Is there any surprising plus or were these like myriad of negative news the country and Namibia is getting since the outbreak of COVID 19?

Min. Shiimi Thank you. Allow me to go, I. I hope you can all hear me. And let me thank Harvard for inviting me, I really feel honored to be part of this conversation. We gave you, you still have to be you cannot escape the fee that you think you have to pay for putting the minister, but you can only talk about when I went to Poland. So maybe, maybe I can connect with that with at LEG so I can give you some time to get the money, but then you have to pay. Well, you have more escalate the situation in Libya, the economic situation, as you have said, it's it has been a challenging situation, especially since the pandemic started. The pandemic already found us in a very difficult position given the fact that the commodity supercycle came to an end and of course, government was also consolidating at the same time. So we were faced with two evil, so-to-speak. One, your revenue has has has come down and is coming down because really part of the strategy of fighting the pandemic was to try and restrain economic activities. You restrain mobility, you, you lock up the country. No people from outside are allowed to come in. People from inside. You cannot move around and therefore economic activities are constrained without constraint. Economic activity The Ministry of Revenue is also going down quite significantly, and that's one thing we have seen. The second even is that while your revenue is going down, your expenditure will have to go up because now you have to spend more money on health. You have to spend money on social grants. For instance, when we started combating the pandemic at the very beginning, and unfortunately, there was no playbook at that time. So we didn't we didn't really have a playbook to look at and see how we responded to this to this pandemic. Should we lock up the economy, should we keep it open? And there was a lot of debates between and of course, our colleagues from the health sector and us from the economic side to try and see whether we can find, you know, a suitable balance or an appropriate balance as to how you can, how you can keep economic activity still going or still being active or the economy. You know, we allow people to be active while the same time introducing measures that are going to contain the pandemic. So this debate where you are in a crisis and in the pandemic, you tend to listen more to the doctors than to listen to the economist. At the beginning, we were leaning more towards listening to the doctors and then listening today to the economist. So as a result, you know, we are locked up the country. But as I say, as I said, apart from now, you know, giving grants. You also had to spend money on the house, on the house health measures to contain the pandemic on the grounds. We had to introduce because basically many people who were deriving their livelihoods on the informal economy, that's quite a significant number in Namibia. Because of the measures that the government has taken, these people could no longer function. They could no longer derive any livelihood. So we send them home now during that time. So they were facing two choices either they starve to death because they are not getting any income at all, and therefore they cannot buy food or will have to help them. So we introduce any major income grant. And the question was how do we deliver aid in the space of a weeks? What sort of infrastructure do we have to deliver these social grants in three weeks to those that have lost their livelihood? And I believe we came up with a very innovative idea of, you know, using the banking system through electronic money. We could deliver the electronic wallets to the qualifying people and money go to the hands off into the hands of the deserving Namibians within a period of a week and a half or something. Which would, you know, it is not something that we have done before in that event. And I believe it's something that we're going to see replicated if we chafe, if we have to, to distribute the grant in a more efficient way. Of course, it was quite cost-effective. We have not really spend money on that on the distribution of these grants. So those like those were the two evils that were that we were facing. Now, when we have asked the question of is there any silver lining in this? I'm not sure whether the way they see any silver lining in the pandemic, but what I have, what I haven't seen is when you are facing difficult economic situation. Generally, people are people also have. A better. Understanding about the reforms that have to be undertaken. So if there's any silver lining in this is that people who are willing to listen when you say we are facing a very difficult situation, we have to reform. People say we're listening better than before. So that's probably the silver lining when we started with the pandemic, one of the of the big-ticket items in terms of our expenditure was the money that we're spending on our national airline, which was making losses year in, year out. The conversation was then is this sustainable? Can we maintain it? We know, you know, going forward or should we basically cut our losses and close close the airline? Then then the national debate started, and then ultimately, to cut the long story short, we agreed to liquidate the airline before the pandemic. I believe that was going to be extremely difficult because there is a lot of sentimental value that is attached to the airline. People still talk about their flags they see on their planes and things like that. So this is probably one of the silver linings that I see in the pandemic that, you know, the propensity to reform is higher than during normal times, and that's probably the silver lining of it. You have asked the question about, you know, support of multiple multilateral institutions. I believe that the fact that this was a global pandemic. The response was also global. So in terms of countries working together to contain the pandemic, in terms of multilateral financial institutions such as the IMF and the World Bank availing facilities, and also, of course, also the African Development Bank availing facility to help countries to contain the crisis and of course, making financial resources available for for the four countries to they know to to be able to absorb these significant losses. In Zimbabwe, for instance, the IMF introduced a rapid facility rapid financing facility that may not many developing countries would exit access in Namibia was one of those that could access that that facility to be able to, you know, to to be able to finance this new venture during these difficult times when that when revenue has collapsed. The African Development Bank also launched a similar facility and the World Bank, so I think it was a lot of support from different angles, from multilateral institutions to help countries that just need to do to come to contain the pandemic and of course, to help with to manage the financial losses that are caused by the pandemic. So a loan is the way you may question.

Miguel Santos: I want to encourage people to ask their questions. The minister has asked me that we move fast to Q&A. He's very direct. He would like to hear from people, direct questions so more, and ask one or two more questions. And then we're going to turn to people. But one thing I wanted to ask you is the first time I went to Namibia and we were summoned in that meeting and that outdoors at mid-card. I've been in these meetings in many parts of the world, but the first thing we did is you stand up and sing the national anthem, and I don't think I'll ever forget that moment. I learned that the Namibians are very nationalistic in the good sense of the word. They love their country, they're willing to work hard, and they're very proud people and linked to the pride on the nation. I wanted to ask you a question of something that I've been curious about, which is I've heard you say in many places like that, Namibia ask for a rapid financing instrument of the IMF, but we have never been to the IMF before. We have never need to go to the IMF before. And there's an element of pride there that I wanted to ask you about. Is this is this more as just a signal of capacity to stand for yourself? Is this a signal over a rendition of ideology? What is this about?

Min. Shiimi: Well, that's an interesting question to get. I I believe it's it's both of that. The understanding here in the media is that, you know, countries run to the IMF as the last resort where they can no longer, you know, finance their, you know, their budgets within the domestic resources that are available to them taxes. And of course, the domestic financial markets and also the commercial capital markets. So you run to the IMF where you are in a crisis, when are you going to see us because you don't have any other choice? So the mantra has been, let's manage the financial resources of government in such a way that we're never run to the IMF because that would be a sign of failure. So it's seen as a sign of failure on the part of those that are managing the country so that's has been the hesitancy. The other reason is that I think we are somehow fortunate compared to other developing countries, especially on the continent, that we have a functioning financial markets. We are able to raise 80 percent of our funding needs. Government funding needs from the domestic market because we have quite significant savings relative to our GDP. And although savings can be accessed by government as well, if you if I can just give you a figure of institutional saving, it's more than one percent of GDP. So not too many countries are in that position and therefore they can. They do not really have. And IMF may not be the lender of last resort in their cases. It could be the lender of maybe second resort or even first resort in some instances. So I think that's that probably explains why, you know, our reluctance to go to the IMF. But the IMF is an institution that we own. We are members of the IMF and it is an institution that was established to help countries to manage crises and the pandemic is one of those crises, and therefore we will not always shy away from going to the IMF. If there are good reasons to do that, but we wouldn't want to run to the IMF because we were unable to manage our office internally. I hope I answered your question.

Miguel Santos: You have. You have. Before we move on to the foreign minister, I wanted to launch upon your personal story because I mean, your story is kind of the story of many Namibians that are coming from the north to the capital to try to make a living and improve and improve its standards of living. And you are a success story. And I guess that's why we are all working to give every Namibian the possibility of have a story like the one you have had a success story that they can tell their children and be proud of. And because they got opportunities. So coming from the north to the capital, the north of Namibia, for people not familiar with these is it's mostly rural. Communal land predominates and it's a very fertile line. So it holds a significant majority, not a majority, but a fairly large number of Namibians are located there. And you came to win at some point. What was difficult? What did you miss when you arrived and what was the toughest part of coming to town and then when you flew to study abroad?

Min. Shiimi: Well, we got. I don't know where that whether it's really a success story or whether maybe, you know, we I happened to be our of luck, but I think one thing I should, I should mention is that yes, indeed I grew up in the area looking after cattle and goats. So that was my main activity. Apart from going to school, I was fortunate to go to school, but probably the main reason why, probably were where I am today is because I benefited from relatively good education. Compared to others that were in the same position. In my secondary school, I happen to go to I have I came to Capitol, to the Capitol during that time when I started secondary school and I went to a Catholic school and that was more or less of an elite school, that time for black people. Of course, they way either good schools, but you know, that time before independence, it was only for, you know, for certain sectors of the population, which was basically the white population. So the school where I went, it's it was considered to be a very, very good school. So I almost grabbed any, you know, any success that I have achieved. Anything else that I'm an extraordinary person. I would just as a normal, normal child, normal students like any of us. But probably the fact that I have, you know, I have benefited from a relatively good education helped me to to to to bring me to where I am today. That's why the second thing that I started waiting also for a relatively good institution, you mentioned earlier that I used to be at a central bank. I have been in that institution for twenty-five years and I think it's is probably one of the success stories of my day in terms of our institutional development. Before independence, we didn't have any central bank. We had to establish one from scratch. But it's an institution that has a in terms of creating, you know, stability and delivering on its mandate, but also developing people. And Apple have benefited from You know exposure, meeting people like me and smart people like Miguel and others. And you know, that's a privilege that not not many not even settle. So again, nothing extraordinary is education and exposure. I just happen to be fortunate

Miguel Santos: Many people that came to the capital. I was impressed that if they had children, they left them back in the north with their grandparents. And I mean, when I ask if that was economic reasons, people said yes, of course, but it's not economic. So what are they going to learn our culture if we bring them here? So that also seems to be an important component that people in the North it's proud of their culture, and they feel if we migrate the whole family, then who is going to teach the kids the culture?

Min. Shiimi Yeah, yeah, yeah, it is, it's partly also historical, because people who came to the capital and you asked me if I have an answer to your question on what was the most difficult part when I came to the capital, the first thing was language. I could hardly speak English and I could speak. I could hardly speak Afrikaans, which was the lingua franca of most parts of Namibia. So it was difficult to communicate. But fortunately, I was a bit young so I could still pick up English and I could still pick up of the country. So if you ask me to learn a language now, I think it's going to be extremely difficult. Now, I was saying it's partly it's partly also for historical reasons before because we had we had a system where you could you could only be in certain parts of Canada if you have a permit to be to be in in in these parts of Canada. So you would not be you are not allowed to stay in the capital, for instance, if you had finished so you were on a contract system. So you come to wake up, your contract expires, you go back. So people still consider where they came from as their home because they were, they were basically a temporary. Now that I think has passed on from generation to generation. So now we don't have that system anymore. But still people still think that's home where they are in the capital. That's no fun for them. So they I just see to work. And then when they retire, they will go back home. And of course, they are. Their parents and grandparents are there that they will leave their children there with a difference. But I think that's changing, though. I don't think that's something that is going to continue for a long time with the rate at which embolization is happening in Libya. I think the future generation will not consider where their parents came from his home. I think they are home anyway. So maybe if you come back to me after 10 years, you will probably find it less and less people who will tell you that, you know, we left our children there because that's where the majority will probably have their children around here. I hope to answer your question.

Miguel Santos: No, absolutely. Absolutely. I'm going to turn to some of the questions that people is asking. A few of them are going to put you in trouble with the central bank where you previously worked because it's a classic tension in crisis and it has been at the forefront of in the US over the previous presidency. They need to have quantitative easing or a lax monetary policy so the economy can recover versus the central bank bottle. Potential concerns with inflation and in the case of Namibia, with the peg of the of the Namibian dollar to the South African rand. So two of the questions that I'm having are related to do you think the central bank is doing enough? I'm not going to put you into that sort of trouble, but I want to ask how has being the coordination? I think you are in a unique position because you were before the central bank and now the Minister of Finance. Do you feel that you change hearts or this is pretty much people. It's on the same boat and there has been agreements and there's a very good question from somewhat are the guys call on the subsidies that you granted business over the pandemic to allow them to survive? How do you roll them back and when and how has that process been still questions?

Min. Shiimi: Absolutely, absolutely. Well, and the first one is a very difficult question, so I'm not sure whether I will be able to answer it satisfactorily. But maybe the fortunate thing is that when the pandemic started, I was at the central bank and and and and that time already some troubling decided to relook at this monetary policy. And it was actually my last meeting at the central bank, the Monetary Policy Committee. But that was a meeting where interest rate we reduce aggressively. That's the one. We then also started looking at the provisioning or the central bank's provisioning rules of commercial banks. So that commission bank can be a bit more lenient because the business sector is going to struggle. And then therefore, if you keep the provisioning rules the same way, just killing an entity that is already struggling. So the central bank has already I mean, right from the beginning, the central bank has it has introduced by and eased, you know, the situation before for businesses because you don't want to kill businesses because it's difficult to establish a new business, then maintaining a new one, I mean, maintaining an existing one. So that's one. I think even then, when I left, I came to the Minister of Finance. So again, during the pandemic and anytime so they concentrate, they continue to do the same, you know, reducing interest rates, I think over the currency of the pandemic, the central bank has probably reduced interest rate by, if I'm not mistaken, probably 300 basis points. So and of course, you have you have asked about coordination still, you know, the minister of finance or government is, you know, is introduced was introducing measures to support business as you have talked about it providing emergency grants so that it was done in unison with the central bank. There has been a lot of discussions. We even introduce actually a scheme that was going to help, especially the small businesses. And that scheme was funded by the central bank. But the losses we're guaranteed by by by the central government. So there has been a lot of coordination, and I think that's coordination between central banks and the Minister of Finance is very critical to the well-being of the economy. Whether you're in a crisis mode or whether you are in peace in normal times, so that that is always critical. Of course, there are inherent conflicts. You know, sometimes we wonder what interest we discussed this government because, you know, we want to reduce our cost of funding. But the central banks also have their own mandate to ensure that they they they they keep the value of the currency. They keep inflation low. So I hope I answer your question then. Let me now move on to the other question of some of the subsidies that we have provided. The fortunate thing is that all these subsidies were temporary. The, you know, they had a definite expiry date. For instance, one of the subsidies, as we have introduced, was a subsidy for those that lost employment. So that was a subsidy for about three months or so. Yeah. So they could claim from, you know, the Social Security benefits, but the central government also, then we also introduce a subsidy to businesses that also lost their livelihoods, you know, to help them be to pay wages and salaries. And again, that was for a period of six months, and all those subsidies have expired. So it's not. It's not only a question of rolling back because they are no longer in existence. So I hope I have an answer to your question.

Miguel Santos: Yeah, yeah, you have to the extent that you can respond to a question on the central bank, which is putting you in an uncomfortable position. So all countries are we having some fellows at the Lab come in to ask questions directly of the ones that we have in line?

Patricio Goldstein Yes, I think we can invite Tim McNaught to ask the question, make Tim a panelist.

Miguel Santos Tim, so if you are free to ask your question directly to the minister now. OK. Thank you,

Tim McNaught Minister. I had the question written down, but I can't see it anymore. But anyways, I was really fascinated by the mobile payments, the social grant program that you did, and I found it really fascinating in a new way, the government use technology and really an effective way. And I was wondering if there were other examples of digitization of government that throughout the pandemic, where you feel like there's been improved processes or there's have been other successes related to digitization of government. So thank you very much.

Min. Shiimi Thank you, thank you very much, and. Yes, I think that's that's where we need to go. You know, digital transformation, that's where we need to go because I think technology is improving and technology is going to help us to streamline our processes and actually become more efficient as to during the crisis, whether we made progress in terms of digital transformation. We have not really done much during that time. I think early on we introduced, you know, services that we went online, for instance, company registration, always online. But that has never happened before, before the pandemic, before the crisis. So in a number of services, we were online. For instance, when you know, banks vary their, you know, when they want to confirm an identity, operate off of somebody that that is also a digitalized. So a number of it. But during the crisis, unfortunately, I think we lost a bit of momentum. So we focused more of our energy on, fighting the crisis and instead of continuing with that digital transformation agenda. But the agreement is that that's really the way to go for Namibia. Namibia is, as we have seen from the gallery, you showed a picture, you know, maybe from the map, you're not able to get your understanding of how big this country is quite a sizable country with lower density. So you'll find people that are, you know, 1000 away from the capital, but there are not many, but you still have to provide them with basic social services. They need health services, they need, you know, water and electricity and things like that. But because of lower density, the cost of providing those services is very, very high. So the future is really to look at it, how to use technology to still deliver these services in a cost-effective manner. So we have made some progress, but I think there's more work to be done in that area.

Miguel Santos Great, minister. Well, will we promote the next speaker to the platform, we have a question from Paul H. that I think it's worth addressing. How much do you see inequality being constrained to long-term growth to the long-term growth where we're going?  And the question is just like how much some inclusive growth can affect or promote long-term long, long term growth? And how do you see inequality playing as a constraint to that?

Min. Shiimi Absolutely. I think inequality is a big challenge in two ways, in my view. First of all, it's important to have some social stability. Now when you have a society. Which is highly unequal, you have thoughts that are few that are commanding all the resources, and I'm good in that in that. And you have the majority. With you struggling to make a living, you have a social problem. Because soon the majority will start to demand things, but you can probably provide. So it's not at least not fair. The wealth of the country is not equally distributed. And that could lead to social unrest. You don't want a situation like that. So in any society that has to be some fair balance in terms of the distribution of resources, you probably haven't seen a society where the equal distribution of wealth of resources, but you know, a lower Gini coefficient of maybe 0.3 0.4 like you still live in countries, although inequality is increasing there. So that's already a constraint on the on, on on on that level. But also. In terms of purchasing power, I think it's also a constraint. If you have if you put all the resources in me. I can only buy one a week. So you are you also concerned about constraining purchasing power because I would probably save all that money, not spend, not spend it in Namibia. I will. I will go and visit them again in London and spend the money there. So it doesn't really help the economy. So it constrains economic growth because it also constrains purchasing power. Mm-Hmm. So from those two perspectives, you actually want to reduce inequality because it's not a good evil to live with. So that's how I see. So it's definitely something is a priority for Namibia is something that we need to create growth that is inclusive, that is creating jobs, especially for the majority of those that are looking for jobs. I think that way we can we can really have to think to reduce inequality. Although, as I say, this is a worldwide problem in Namibia, we can probably still reduce it further before we start the rest of the world to see how would we be. How would you keep it low? Because I think that's a challenge. I mean, you want.

Miguel Santos Absolutely, you're going to get a question now from someone you know, Nikita Taniparti. 

Nikita Taniparti Thank you, Miguel, and thank you, Minister. I think we've had the honor of knowing and learning much about Namibia recently. But for someone totally unfamiliar with the current context of Namibia, having listened to what Miguel presented and some of the responses you've given, what should they know about the broad opportunities for economic development in Namibia? What's something that you think is not as known to the rest of the world? And where do you see the challenges to overcoming? Where do you see the challenges that need to be overcome to see these come to life?

Min. Shiimi Well, that's a that's a difficult question. We believe as a country, there are economic opportunities. I mean, you get our heads showed you what has happened in the past that the country was growing and plus growing relatively fast for, you know, almost a decade ago has showed showed you that the country know, move into new industries, gain more market share. So I think what is left now is for us to become a bit more innovative and start to figure out what else can be done, what can we do, which are the new areas of growth? One, for instance, which which which are. We are aggressively pursuing one strategy that you make. If you wonder what exactly is that the country is has got access to renewable energy in terms of wind and solar. We are one of the best in the world comparable to countries like Chile and and Saudi Arabia. So the question that we're asking is, how do we make use of this renewable resource that we have? Of course, we need energy, we import some of our energy from our neighbors, but also how can we use make use of this energy, for instance, to move into new areas, for instance, the green hydrogen? So that's something that we have, that we have to be very, very optimistic at COP26 in November, maybe votes in November in Glasgow. We we just announced because we went through a request for proposal process where we invited bids to, you know, to bid to come in and actually do payloads and experiments in Namibia. So we give them a piece of land and access to a two to our time to come and test whether, you know, the potential of a green hydrogen and that was awarded or that it was an award was announced at COP26. So we are now in the process of finalizing this with it with a bit that we did with Texas would be done. Who is going to deploy his own capital over the next 18 months or so to really demonstrate the potential of the green hydrogen sector in Namibia? So that's one area. The other areas, of course, we believe that, you know, as a country, we have now look together with our step. I looked at, you know, which areas where can we diversify into potential already existing industry? The value in existence may be small. How do we scale them up? And also in terms of new industries, what are the comparative advantage we have? So we have now come up with a list of products 75, which we have split into into phrases like this will be the priorities for the next five years or so, the next phase and then that phase. So while this request is a close collaboration between private sector and public sector, because public sector will have to provide them using public goods, you know, infrastructure, energy, telecommunications services where private sector cannot, you know, make a significant contribution is public. We have to be provided by government and also to coordinate the different entities. So we we believe if we improve our coordination, if we improve our dialog with it, with a specific public or private sector that can exploit these opportunities. Let me be as obvious growth trajectory to change, and you can start to grow again in an inclusive manner that is going to create jobs and in a manner that will hopefully help us to reduce inequality. That's more or less what I would say, but if you want me to add more, you can. You can come back.

Miguel Santos We're going to have another of our project fellows, Alexia Lochmann, coming up to ask a question. I have a few questions Minister, in the chat while Alexia up, on the African Continental Free Trade Area. How do you think that can help economic growth prospects post-pandemic? If you think it's going to slow, is it going to result in intra-African trade within southern Africa or a trade creation versus diversion? What are your thoughts?

Min. Shiimi So you are going to talk about that question now or do you want to help us do our bit for Alexia? OK, very good. I think that's that's an opportunity that is that is really opening up for the continent. The fact that, you know, the continent is dropping the tariff barriers is dropping all the other in all the other various trade. I think this is an opportunity that Namibia want to exploit. So our message to to the investors is that we want to work with them to come and sit up here, you know, produce goods for for the continent because it is a continent of more than one billion people. And unfortunately, this population is still growing. And I think last time I checked is probably still the continent that is going to have, you know, positive growth in terms of population until until 26 years old. So it's still a population that's going to create young people and probably the migrants, but it's going to change and hopefully the process is going to change. So I believe there are enormous opportunities. And therefore, as a country, we I think positioning ourselves. That's why we are looking at the comparative advantage that we have so that when we are talking to investors and we want to target those specific ones that can actually, you know, that have an interest in that have already produced the kind of of of of products and services that that that that that we we are seeing as an opportunity to produce it that may be able to deliver in the media to come and sit up here and serve as a continent. So that's definitely an enormous opportunity. Where are we now? The trade free trade area has been launched in January 2021, if I'm not mistaken. And now we are basically just, you know, doing the final rounds of making sure that we're comparing our tariff tariff schedules. So we know that everybody, we make sure that everybody needs that exchange and also making sure that the rules of origin, you know, equitable and are implemented according to agreement, because that that can be a source of a lot of these agreements. If you don't agree on on on rules, on the rules of origin, because I can import things from from the US or from China and from India and and export that to the rest of the continent. But those are things that are produced on the continent. So I will be. So we will have to make sure that the rules of origin agreed upon and everybody complies with that. If that was the point. So that's where we are. But this is an enormous opportunity.

Miguel Santos Alexia, go ahead.

Alexia Lochmann Hello, Minister, thank you so much again for forgiving minister it. It's good to speak with you again and to hear your voice to see you. We have had the great pleasure to meet and I really hope I can. I can visit them again soon. I feel absolutely in love with the country and the people. And so, so yeah, I think my question rotates back a little bit to something we have touched upon earlier, which is kind of the digital economy. And I wonder, do you see some potential for especially younger people, let's say, for example, in in the northern areas, for example, to learn skeeters digital skills that then they can work within accordance with international community. So, for example, people don't necessarily have to emigrate to the cities to work, but maybe if they're connected to a digital framework and if they have some skills, they can actually work from what nowadays still consider home and sort of build an economy around that. Yeah, I was just wondering about your thoughts with this regard.

Min. Shiimi Thank you, Alexia, and I hope you come back soon and I know this to you. You know you're here. But unfortunately, we didn't have you not able to visit the whole of Namibia, and you would no longer do what you're supposed to be doing because of the pandemic. But hopefully things are going to change. So when you come back again. Now you mentioned, you have mentioned very, very important things the digital economy, you know, the use of technology. I believe that's the future, the future is really in digital transformation. And I think from a government perspective, the government has to intervene in different ways once you know, to expose children laziness at the young age. So we must make sure that children at school or already exposed to technology so that when they when they start to use technology, they already use technologies that way. I believe you open up those opportunities that they're thinking about. So that's one. The other one is, is this providing connectivity infrastructure? By and large, this is done by the private sector. But they may steal some level of public goods that have to be provided, as they say, as I mentioned earlier. There are areas. I see no way the densities are very, very low, so it's difficult for the private sector to go there and provide connectivity infrastructure because it's simply not profitable. And that's probably where the government has to come in and help to provide those connectivity infrastructure. So the question is, how do we find it? So that's now the question we are trying to wrap our arms around. It's a question of having different ideas, you know, for it is one that universal access funding can. We can we consider establishing something like this the way we can collect some levies from, you know, the users of telecommunication services and maybe part of that money can they can be redeployed in in areas where it's not profitable for the private sector with it. So that way you unlock that demand and that way you expose people in that area to the technology early enough so that they can actually make start making use of technology. And they don't have to come to town, as you say, but they can because you provide a service. So I think there are different areas where the government will have to intervene. This is a very, very critical area. So it's in fact an area that is enjoying the focus of government. If you look at our plan, which is we use for the next five years, we use called the Harambee Prosperity Plan, which is basically the active government development of development plan for now. It's a pillar all connectivity infrastructure because this is a key to unlock some of these opportunities in the outlying areas where people are still migrating to town. But of course, the rate of migration is not something that you can. You're going to stop. I think that that is the nature of these. But do you still want people who are going to remain to have access to these services? And maybe they can. They can still be alive while they are still there, but you know, through, you know, technological platforms. Let me leave it there, Alexia, but to come back tonight, maybe we can have more of this discussion.

Alexia Lochmann Thank you so much, Minister. Yes, I. We are planning on hopefully coming back very soon. Thank you again.

Miguel Santos Minister, thank you very much. We want to be, I mean, respectful with your time because, you know, people don't know, but we know that today you're coming from a long session in Parliament to pick up this chat after a long day. We really appreciate having the opportunity to exchange ideas with you. This is had been I can tell you, this has been one of the most populated talks that we have had and the girl development talks, and I wanted to thank you for the opportunity. I look forward to continue working together. I hope you have enjoyed the talk and as I told you, once we are, we're very excited to working in Namibia and we want to. We want to make a difference there to help you achieve all the goals that you have been pursuing because it's a great success story and it can be a great success story. And as I said, we wanted that all children, you know, when Namibia started, I was there with the minister as you, me and a group of people that was working hard to bring the country together and improve the standards of living. So I appreciate the opportunity and I appreciate having you today on our talk.

Min. Shiimi Thank you, me, Miguel, and let me thank you and your colleagues at the Growth Lab for inviting me to participate in this conversation. It has been an absolute pleasure to have, you know, to engage all those that are on this platform, but it has also been an absolute, absolute pleasure to work with. You know, this is the professional team. It's a team that is willing to make a difference, and therefore I continue to look forward to continue to work with it, with the team and the rest of the community. Thanks once again for inviting me to be part of the conversation and thank you for the conversation. Thank you very much.

Miguel Santos Thank you. Have a nice evening in Windhoek. Minister and thanks everybody for your interest.

Min. Shiimi Thank you. Thank you.