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- GDP (PPP):
- $23.6 billion
- 5.3% growth
- 5.3% 5-year compound annual growth
- $10,765 per capita
- Inflation (CPI):
- FDI Inflow:
Namibia’s recent economic expansion, which has averaged more than 5 percent annually over the past five years, has been propelled by a relatively high level of political stability, prudent macroeconomic management, and foreign direct investment in the mining sector. Fiscal policy has been expansionary, but overall public spending has been below the fiscal cap of 40 percent of GDP.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 61.9 (up 2.3 points)
- Economic Freedom Status: Moderately Free
- Global Ranking: 81st
- Regional Ranking: 8th in Sub-Saharan Africa
- Notable Successes: Trade Freedom and Monetary Freedom
- Concerns: Property Rights, Corruption, and Financial Freedom
- Overall Score Change Since 2012: No Change
The absence of an independent and fair judiciary weakens the rule of law and undermines prospects for long-term sustainable economic development. Corruption is pervasive, and the efficiency of government services is poor. A lack of deeper commitment to enhanced regulatory efficiency holds back the emergence of a more vibrant private sector and impedes diversification of the economy.
Namibia has been politically stable since independence from South Africa in 1990. President Hage Geingob won a five-year term in 2014. The ruling SWAPO party has won every parliamentary election by large majorities since 1990. Namibia’s economy is centered on agriculture and vulnerable to external shocks. It is also closely linked to South Africa’s economy, and the Namibian dollar has been pegged to the South African rand since 1993. Since 2004, there has been official pressure on white and foreign landowners to sell their property to the government so that “historically disadvantaged” and landless Namibians can be resettled.
Although former President Hifiyepunye Pohamba made efforts to curb corruption, misconduct by government officials remains a problem, and investigations of major cases proceed slowly. SWAPO’s longtime political dominance has resulted in a conflation between party and state, further hampering anti-corruption efforts. The rule of law remains weak, and the judicial system suffers from a lack of resources and chronic delays.
The top individual income tax rate is 37 percent, and the top corporate tax rate is 34 percent. Other taxes include a value-added tax. The overall tax burden equals 32.1 percent of total domestic income. Government spending amounts to 34.7 percent of GDP. Although overall spending remains under control, rising public-sector wages could undermine fiscal sustainability. Public debt amounts to about 25 percent of GDP.
Despite some progress in recent years, the overall regulatory framework remains cumbersome. There is no minimum capital requirement, but the cost of completing licensing requirements remains higher than the level of average annual income. The labor market lacks dynamism. In late 2014, the government announced a large multi-year program to provide housing subsidies for low-income citizens, putting upward pressure on housing prices.
Namibia, a member of the Southern African Customs Union, has a low 0.8 percent average tariff rate. Non-tariff barriers affect dairy, wheat, and other agricultural products. The government screens new foreign investment. Although foreign investment is formally encouraged, the necessary regulatory infrastructure for spurring dynamic growth in new investment is not in place. The financial sector remains underdeveloped.