- GDP (PPP):
- $26.8 billion
- -1.4% growth
- 0.6% 5-year compound annual growth
- $10,037 per capita
- Inflation (CPI):
- FDI Inflow:
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.
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.
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.
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.
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.
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.