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- GDP (PPP):
- $16.8 billion
- 4.0% growth
- 3.5% 5-year compound annual growth
- $7,772 per capita
- Inflation (CPI):
- FDI Inflow:
Namibia’s economic freedom score is 59.4, making its economy the 94th freest in the 2014 Index. Its score is 0.9 point worse than last year, with declines in the control of government spending and business freedom outweighing improvements in labor freedom, trade freedom, and fiscal freedom. Namibia is ranked 12th out of 46 countries in the Sub-Saharan Africa region, and its overall score is above the regional average.
Namibia was first graded in the 1997 Index, and its economic freedom score has dropped since then by over 2 points. A gain of over 45 points in trade freedom has been more than offset by declines in seven of the 10 economic freedoms, including large declines in property rights, financial freedom, and investment freedom. Namibia’s economy is now rated “mostly unfree.”
Namibia’s overall economic freedom remains constrained by institutional weaknesses and an absence of commitment to deeper reforms. Namibia is weak in protecting property rights and ineffective in eliminating corruption. The judicial system is inconsistent in contract enforcement and vulnerable to political influence. Corruption is perceived as significant.
President Hifikepunye Pohamba won a second five-year term in 2009. Namibia is rich in minerals, but weak property rights and poor infrastructure impede growth, and unemployment in the formal economy remains a serious problem. About a third of Namibians depend on subsistence agriculture and herding; the services sector employs most workers in the formal economy and contributes the most to GDP. Namibia receives 30–40 percent of its revenues from the Southern African Customs Union. Economic growth depends largely on the price of uranium. 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. The state owns many enterprises in key sectors.
Official corruption remains a problem, and investigations of major cases proceed slowly. Public office is often given as a reward for political service, and tribal affiliation is a factor. The rule of law remains weak, and access to justice is obstructed by economic and geographic barriers, a shortage of public defenders, and delays. Property rights are not protected effectively.
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 is equal to 28 percent of gross domestic income. Public expenditures equate to 37 percent of GDP. Public debt has risen to a level equivalent to over a quarter of the gross domestic economy.
There is no minimum capital requirement for starting a business, but completing licensing requirements now takes over 100 days. The public and energy sectors employ much of the formal labor force. The labor market continues to lack flexibility. Wasteful subsidies to state-owned enterprises impede efficiency, and rising inflation threatens monetary stability.
Namibia has a low 1.1 percent average tariff rate. Imports of several agricultural products face additional non-tariff barriers. New foreign investment can be subject to government screening. The financial sector is not fully developed. Financial intermediation remains uneven across the country, and scarce access to credit and banking services discourages entrepreneurial activity.