…Harvard’s CID report reflects Namibia’s economic failure
By Hilary Mare
NAMIBIA has failed to make it into the top 20 (in Africa) of the latest Global Growth Projections by the Centre for International Development at the prestigious Harvard University (CID), landing on 66th globally, a reflection of the country’s growth prospects.
With the exception of India and Philippines, all the countries in the top 10 are in Africa — Kenya (6.7 percent), Malawi (6.5 percent), Tanzania (6.5 percent), Egypt (6.0 percent), Madagascar (5.9 percent), Zambia (5.8 percent), Senegal (5.5 percent) and Philippines (5.5 percent).
Namibia is ranked 21 in Africa with a growth projection of 3.76 anually
Reflecting on Namibia’s poor prospects the Managing Director of Trustco, Dr Quinton van Rooyen highlighted that the reason for the country’s poor economic outlook becomes quite clear.
“What’s going to make Uganda, Tanzania and Kenya economic juggernauts and not Namibia? These countries have been shifting out of farming and into limited manufacturing sectors, giving them a diverse export basket. As such, when one export market is down, the rise in another market can offset the impact on their country’s economy. Namibia, on the other hand, has a much more concentrated export market, with the majority of our exports being primary resources, exposing our economy much more to the commodity market upturns and downturns. The CID has identified growth as coming from knowhow-driver economies that adapt existing products for local manufacture as the key to outpace advanced economies. Namibia should take note and expand its export offerings if we want to regain the economic growth we achieved during the first half of this decade.
“Creating new export markets will fall on the shoulders of the private sector, but government must support its endeavours. Increasing incentives such as Export Processing Zones is but a part of it, but more important is releasing restrictions on skills, talent and international exposure to the local labour market. We need know-how, and those restrictions are an additional obstacle to overcome and may even be the primary reason we are unable to diversify our economy. These restrictions might have had good intentions to decrease unemployment, but did not deliver. I know from own experience of a diversity marker and investment landscape that ultimately employment will only increase if we can build new businesses, with new products, for a world market. Untie our hands, and let us help ourselves and create wealth for as many as possible at any given time,” he said.
The report notes that India and Uganda are poised to lead global growth in the next decade as new economic projections indicate the ascendency of countries on the Indian Ocean rim and East Africa.
With average annual growth projections of 7.9 percent and 7.0 percent for India and Uganda, respectively, the latest report indicates relative stagnation for Europe and the US, while China’s growth will start to peter out.
CID’s projections are based on the newly released 2015 global trade data and The Atlas of Economic Complexity, an online tool which measures a country’s productive knowledge and predicts its rate of growth.
According to the Financial Times’ John Authers, a senior columnist, “CID has a successful record of identifying which countries are positioned to grow. Based on the latest global trade data for 2015, they aim to identify the drivers of why some countries grow, while others do not.”
“Our economic complexity predictions find India’s disputed upper hand in growth will expand into a widening gap in the medium-term, with growth projections to 2023 predicted to be at 7.9 percent annually, ahead of the 4.6 percent for China,” he said.
The projections also favour Pakistan’s potential, at 5.1 percent predicted growth, presenting a clear picture of South Asia and East Africa’s positive growth outlook.
The report notes that countries like India, Kenya and the Ph i l ippi n e s have made quantum leaps in diversifying their exports “into more complex products”.
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