The International Monetary Fund (IMF) has projected that Namibia’s economic growth will resume at about four per cent in 2018, Namibia Press Agency (NAMPA) reported.
Speaking at a media briefing here Tuesday, IMF Mission Chief for Namibia Geremia Palomba said the projected growth is due to the production from new mine, manufacturing and retail activities recovery.
Palomba emphasised that the downside risks to the outlook include unpredictable Southern African Customs Union (SACU) revenue, subdued commodity prices and fiscal slippages that could undermine the policy credibility.
“Namibia’s key challenges going forward are to manage the ongoing adjustment process and preserve macroeconomic stability, while reducing unemployment and income equality,” said Palomba.
He noted that although the government and the Bank of Namibia have already taken steps to reduce the fiscal deficit and preserve financial stability, more still needs to be done as external vulnerabilities are on the rise.
Palomba further emphasised that policies need to address the sources of recent decline which include public wage costs, combine expenditure and revenue measures that can support long-term growth, while safeguarding critical social and development spending.
“Strengthening revenue administration, improving budget formulation and expenditure controls as well as carefully managing extra-budgetary entities including public enterprises are critical steps to consolidate the fiscal accounts,” said Palomba.
He noted that the government has also taken actions to support growth, tackle high unemployment among the youth and reduce income equality.
Palomba added that reforms targeted at addressing the shortage of skilled workers, better aligning wage dynamics to productivity trends and simplifying business regulations have the potential to significantly boost employment and deliver more inclusive growth.