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- GDP (PPP):
- $15.7 billion
- 3.6% growth
- 3.7% 5-year compound annual growth
- $7,363 per capita
- Inflation (CPI):
- FDI Inflow:
Namibia’s economic freedom score is 60.3, making its economy the 84th freest in the 2013 Index. Its score is 1.6 points worse than last year, with declines in labor freedom, trade freedom, and business freedom. Namibia is ranked 9th out of 46 countries in the Sub-Saharan Africa region, and its overall score is above the world and regional averages.
Namibia’s progress toward greater economic freedom has been patchy, and its economy underperforms in many critical areas. 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. There is little evidence of political will for reform, and Namibia’s decline in economic freedom ranks among the worst recorded in this year’s Index.
Open-market policies have been advanced only marginally, with layers of non-tariff barriers and lingering investment restrictions undercutting the growth of productivity. A lack of deeper commitment to enhanced regulatory efficiency further impedes the emergence of a more vibrant private sector and diversification of the economy.
South West Africa People’s Organization candidate Hifikepunye Pohamba succeeded President Sam Nujoma in 2005 and won a second five-year term in 2009. Namibia is rich in minerals, including uranium, diamonds, copper, gold, lead, and zinc, but weak property rights and poor infrastructure impede growth, and unemployment is reportedly a problem. About a third of Namibians depend on subsistence agriculture and herding for their livelihood. Official pressure on white and foreign landowners to sell their property to the government so that “historically disadvantaged” and landless Namibians can be resettled has included expropriations. State-owned enterprises operate in many key sectors. Namibia’s economy is closely linked with that of South Africa, its major trading partner and former administering power.
The rule of law remains weak and uneven across the country. Property rights are not protected effectively, and the legal framework remains inefficient and susceptible to political interference. Parliament exercises little control over the government. Public office is often given as a reward for political service, tribal affiliation is a factor in official appointments, and endemic corruption is a significant issue.
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 (VAT). The overall tax burden equals 28.9 percent of total domestic income. Government spending has increased to 30.8 percent of GDP. The budget deficit has widened substantially due to the implementation of a large stimulus package aimed at creating jobs. Public debt is close to 22 percent of GDP.
Despite some progress in the past few years, the overall regulatory framework remains cumbersome. There is no minimum capital requirement, but launching a business still takes more than 60 days. The cost of completing licensing requirements remains higher than the level of average annual income. The labor market lacks dynamism. Inflation has moderated over the past few years.
The trade-weighted average tariff rate is a low 1.8 percent, but customs delays and some restrictions on agricultural imports raise the cost of trade considerably. 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, and access to credit and other financial services is limited.