2021 Index of Economic Freedom

Namibia

OVERALL SCORE62.6
WORLD RANK83
Rule of Law

Property Rights57.1

Judicial Effectiveness63.6

Government Integrity47.4

Government Size

Tax Burden67.5

Government Spending57.4

Fiscal Health53.7

Regulatory Efficiency

Business Freedom65.6

Labor Freedom85.2

Monetary Freedom77.2

Open Markets

Trade Freedom71.2

Investment Freedom65.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 2.5 million
  • GDP (PPP):
    • $26.8 billion
    • -1.4% growth
    • 0.6% 5-year compound annual growth
    • $10,037 per capita
  • Unemployment:
    • 20.3%
  • Inflation (CPI):
    • 3.7%
  • FDI Inflow:
    • $-17.4 million

Namibia’s economic freedom score is 62.6, making its economy the 83rd freest in the 2021 Index. Its overall score has increased by 1.7 points, primarily because of an improvement in fiscal health. Namibia is ranked 6th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional and world averages.

Namibia’s economy has improved its ranking within the moderately free category this year, aided by a substantial improvement in fiscal health. To continue toward greater economic freedom, the government needs to address rigidities in its economic and fiscal structures. Other shortcomings include ongoing corruption and related misallocations of resources, which have weakened government integrity.

IMPACT OF COVID-19: As of December 1, 2020, 151 deaths had been attributed to the pandemic in Namibia, and the economy was forecast to contract by 5.9 percent for the year.

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Background

Namibia gained its independence from South Africa in 1990 and has been politically stable since then. President Hage Geingob was elected to a second five-year term in 2019 but by a much narrower margin than he earned in 2014. The ruling South West Africa People’s Organization (SWAPO), which has won every election by large majorities since 1990, lost its parliamentary supermajority in the 2019 election. The mining sector, especially uranium, brings in more than 50 percent of foreign exchange earnings. Namibia’s economy is closely linked to South Africa’s, and its credit rating is one of the highest in the region. The government is considering land reforms, including expropriation of land with “fair compensation” for redistribution to the black majority.

Rule of LawView Methodology

Property Rights 57.1 Create a Graph using this measurement

Judicial Effectiveness 63.6 Create a Graph using this measurement

Government Integrity 47.4 Create a Graph using this measurement

Although property rights are guaranteed by law and the courts can enforce them, land rights are contentious, and property registration is difficult and time-consuming. The judiciary is independent but inadequately resourced and lacking in technical capacity. In 2019, a multibillion-dollar corruption scandal resulted in convictions of high government officials and senior business leaders who co-opted the national fishing quota system for personal gain.

Government SizeView Methodology

The top individual income tax rate is 37 percent, and the top corporate tax rate is 32 percent. Other taxes include a value-added tax. The overall tax burden equals 29.3 percent of total domestic income. Government spending has amounted to 37.7 percent of total output (GDP) over the past three years, and budget deficits have averaged 5.0 percent of GDP. Public debt is equivalent to 55.9 percent of GDP.

Regulatory EfficiencyView Methodology

Starting a business, obtaining electricity, and dealing with construction permits now cost less than they did, but business freedom as a whole has not improved compared to business freedom in other countries. It is not difficult to hire or dismiss an employee. There are government subsidies for education, medical care, roads and infrastructure, and agriculture.

Open MarketsView Methodology

Namibia has five preferential trade agreements in force. The trade-weighted average tariff rate is 6.9 percent, and one formal nontariff measure is in effect. However, other barriers, exacerbated by regulatory shortcomings, undermine overall trade freedom. There are no formal limits on foreign ownership, but some sectors are subject to a joint local ownership requirement. Despite some progress, financial intermediation is uneven across the country.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius772.1
2Rwanda68.3-2.6
3Botswana67.6-2.0
4Seychelles66.32.0
5Cabo Verde63.80.2
6Namibia62.61.7
7Côte d'Ivoire61.72.0
8Tanzania61.3-0.4
9South Africa59.70.9
10Benin59.64.4
11Ghana59.2-0.2
12The Gambia58.82.5
13Nigeria58.71.5
14Uganda58.6-0.9
15Gabon58.11.4
16Senegal580.0
17Madagascar57.7-2.8
18Togo57.53.4
19Niger57.32.6
20Guinea56.50.0
21Burkina Faso56.5-0.2
22Djibouti56.23.3
23Mauritania56.10.8
24São Tomé and Príncipe55.9-0.3
25Comoros55.72.0
26Mali55.6-0.3
27Eswatini55.1-0.2
28Kenya54.9-0.4
29Guinea-Bissau54.91.6
30Angola54.22.0
31Lesotho53.5-1.0
32Cameroon53.4-0.2
33Malawi530.2
34Sierra Leone51.73.7
35Ethiopia51.7-1.9
36Mozambique51.61.1
37Republic of Congo50.78.9
38Chad50.40.2
39Zambia50.4-3.1
40Burundi49.90.9
41Equatorial Guinea49.20.9
42Liberia49.20.2
43Democratic Republic of Congo49-0.5
44Central African Republic48.8-1.9
45Eritrea42.33.8
46Zimbabwe39.5-3.6
47Sudan39.1-5.9
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