Embed This Data
- GDP (PPP):
- $25.3 billion
- 4.5% growth
- 5.3% 5-year compound annual growth
- $11,408 per capita
- Inflation (CPI):
- FDI Inflow:
Namibia’s economy has benefited from a relatively high degree of regulatory efficiency and engagement in global commerce. The overall regulatory environment is fairly well organized and straightforward. With simplified and low tariffs, openness to trade is relatively high. Despite the challenging global economic environment, annual economic growth has averaged more than 5 percent over the past five years.
Overall economic freedom in Namibia remains constrained by long-standing institutional weaknesses and the absence of political commitment to deeper reforms. Namibia is weak in protecting property rights, and despite some progress, anticorruption measures lack effectiveness. The judicial system enforces contracts inconsistently and is vulnerable to political influence.
Namibia has been politically stable since independence from South Africa in 1990. President Hage Geingob won a five-year term in 2014. The ruling South West Africa People’s Organization (SWAPO) has won every parliamentary election by large majorities since 1990. The mining sector brings in more than 50 percent of foreign exchange earnings, and the country is projected to become the world’s second-largest uranium producer after a Chinese-owned mine is fully on line. Namibia has one of the highest credit ratings in Africa. Its economy is closely linked to South Africa’s economy, and its dollar has been pegged to the South African rand since 1993.
Property rights are constitutionally guaranteed, but the parliament can legally expropriate property and regulate the property rights of foreign nationals. The rule of law remains weak, and the judicial system suffers from a lack of resources and chronic delays. The president’s strong anticorruption drive, backed by exemplary action, has helped the fight against graft, but significant weaknesses in transparency and government accountability persist.
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 30.9 percent of total domestic income. Government spending has amounted to 38.5 percent of total output (GDP) over the past three years, and budget deficits have averaged 4.5 percent of GDP. Public debt is equivalent to 27.2 percent of GDP.
The overall regulatory framework has become more efficient and streamlined, but the pace of reform has slowed. Enforcement of commercial regulations is fairly effective and consistent. Labor regulations are relatively flexible, but the labor market lacks dynamism. Subsidies and transfers intended for educational assistance, medical care for public servants, and roads and infrastructure are expected to increase by nearly 1 percent of GDP.
Trade is extremely important to Namibia’s economy; the value of exports and imports taken together equals 100 percent of GDP. The average applied tariff rate is 0.8 percent. Foreign investment is screened by the government, and state-owned enterprises distort the economy. Financial intermediation remains uneven across the country, and scarce access to credit and banking services discourages more robust entrepreneurial activity.