| Salient features and drivers of the economy. Namibia is located on the western side of the southern African subcontinent. The country became independent on 21 March 1990. Its neighbouring States are Angola and Zambia in the north, Botswana in the east and South Africa in the south. Namibia’s main economic activity is centred on: 1. Mining. 2. Services – financial services, telecommunications, tourism, transport (and Government services). 3. Marine fisheries. 4. Agriculture (extensive livestock farming). Since Independence, the economy has seen a transformation from a purely natural-resource based economy to a more diversified economy with some processing of natural materials (for example diamonds and marble) and other value added activities (for example textiles), a stronger contribution of the services sector, notably the transport, tourism and financial service sectors, and emerging diversification into on-land marine and freshwater fish farming, exploitation of indigenous natural plants and fruits, and high value irrigation production (for example grapes and dates). The country is host to two major deserts, the Kalahari Desert stretching along the eastern border with Botswana and the Namib Desert along the Atlantic Ocean. On-shore diamond and uranium mining have been long-standing economic activities in the Namib Desert area. High world mineral prices have prompted intensified exploration and one new uranium mining operation has been commissioned recently, with another to follow shortly. It has further prompted renewed interest in copper mining activity (including processing) and a large scale zinc mine was established in recent years. Mining continues to be a key driver of the economy. Rainfall shows high levels of variation and is highly variable between seasons, resulting in low carrying capacity of the land restricting agricultural activities largely to extensive livestock farming with opportunities for horticulture along the perennial rivers in the North (Kunene, Okavango and Zambezi rivers) and the South (Orange River) and various dams across the country. Despite its salient challenges, agriculture continued to provide a livelihood to the majority of Namibians. Namibia’s land surface covers an area of approximately 823,680 km2, stretching about 1,320 km between the northernmost and southernmost points. In addition to the land surface, Namibia’s exclusive economic zone stretches 200 nautical miles off the coast covering an area of about 526,000 km2. The cold, nutrient rich Benguela Current in the Atlantic Ocean flows from south to north along the western coast, providing good opportunities for marine fisheries. Offshore-diamond mining is a main economic activity and the sizable offshore Kudu gas field may be exploited in future. Off-shore exploration for oil, gas and diamonds is on-going. Rich and expanding wildlife populations, diverse landscapes and cultures, and majestic wilderness settings provide internationally competitive tourism attractions for game/nature viewing and hunting audiences. An extensive and renowned protected area network (covering more than 14% of the country) serves as the engine for much of this tourism. Concomitantly, the recently introduced communal conservancy program also offers large-scale tourism development opportunities, and in the process is poised to provide substantial employment and livelihood benefits to rural community residents in remote locations where few other development options are available. Namibia’s physical (transport, telecommunication, power) infrastructure is relatively advance and so its financial service sector. The service industry (financial services, telecommunications, tourism, transport ) is another main driver of economic growth in Namibia. Population. Namibia’s population increased from 1.41 million in 1991 to 1.83 million in 2001, growing at a rate of 2.6% per annum over the ten year period. The rate of population growth decreased from 3.1% in 1991 to 2.6% in 2001, mainly due to the high HIV/AIDS infection rates. Close to 40% of the population is aged below 15 years. Namibia is the second least densely populated country after Mongolia. The mean population density in 2001 was 2.2 persons per km2. 67% of the country’s population resides in the rural areas and 28% of all households obtained their main household income from farming activities, though with significant regional differences. The population is more concentrated in the northern areas along the perennial rivers, in the central area around the capital Windhoek and at the coastal towns in the west. Physical and services infrastructure coverage. The sheer size of the country combined with low population densities constrains the physical and services infrastructure coverage, with large parts of the rural areas un- or under serviced by the modern services technology available in urban and peri-urban centres. Poverty profile and Millennium Development Goals. Namibia is classified as “lower middle income country” (LMIC) with a high annual GDP per capita of about USD2,843 , an average that hides considerable disparities. According to Namibia Household Income and Expenditure Survey (NHIES) of 2003/04, the richest 10% of the households in Namibia account for nearly half of the total income of private households. The GINI co-efficient was 0.6, down from 0.707 in 1993/4. The gap between average rural and urban incomes, and the perception of better opportunities in urban areas, fuels migration from rural areas to the country’s major cities, which in turn increases urban poverty. Poverty is higher among historically and traditionally disadvantaged groups. Namibia represents a typical dualistic economy where abject poverty exists alongside extremes of wealth. Wide disparities in infrastructural development between the impoverished northern parts of the country where most of the population lives, and the central and southern regions, unequal access to quality education and health services represent other dimensions of poverty in Namibia. The economic and geographical dualism, partly a legacy of the country’s colonial past, poses one of the biggest challenges to the fight against poverty in Namibia. HIV/AIDS is yet another challenge with considerable socio-economic costs, especially to the poorest groups. Low productivity of affected and infected working population as well as the increasing number of orphaned children poses a country-wide challenge. In spite of these challenges, Namibia is not a priority country for Overseas Development Assistance (ODA) because of its “lower to middle income country” classification. This underscores the fallacy of per capita income as a major determinant of a country’s level of welfare. Namibia is concerned about the decline in overall Overseas Development Assistance (ODA) to Namibia, inclusive of a trend globally by some development partners that involves redirection of resources from individual nations to multilateral and international funds . Namibia\\\'s LMIC status restricts access to some of the funds, while, for those multilateral funds for which Namibia is eligible, Namibia is competing against developing nations globally or continentally, including Least Developed Countries (LDCs). This trend is particularly worrisome in light of a UNDP Namibia estimated gap in assistance it receives as contrasted to estimated funding required to implement MDGs and Vision 2030 of NAD8.5 billion, an amount that is exclusive of those resources already secured from GRN, bilateral development partners, and other sources, such as the Global Fund on HIV/AIDS, Malaria and Tuberculosis. Namibia’s economic growth has been insufficient to enable it to attain its MDGs for reduction of poverty and its related Vision 2030 development goals. |
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