2018 Index of Economic Freedom

Namibia

overall score58.5
world rank103
Rule of Law

Property Rights56.6

Government Integrity45.4

Judicial Effectiveness54.2

Government Size

Government Spending50.4

Tax Burden63.0

Fiscal Health16.5

Regulatory Efficiency

Business Freedom67.5

Labor Freedom85.5

Monetary Freedom74.8

Open Markets

Trade Freedom83.3

Investment Freedom65.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 2.3 million
  • GDP (PPP):
    • $26.0 billion
    • 4.5% growth
    • 4.5% 5-year compound annual growth
    • $11,290 per capita
  • Unemployment:
    • 25.6%
  • Inflation (CPI):
    • 6.7%
  • FDI Inflow:
    • $274.9 million
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Namibia’s economic freedom score is 58.5, making its economy the 103rd freest in the 2018 Index. Its overall score has decreased by 4.0 points, with a very steep decline in the score for the fiscal health indicator overwhelming improvements in government integrity and judicial effectiveness. Namibia is ranked 11th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.

Although Namibia’s economy has benefited greatly from relative openness to trade and investment and from global commerce, the government’s announced intention to take drastic steps to redress inequality could increase investor uncertainty and disrupt the business climate. Popular demand for expropriation will remain a constant pressure, and enactment of some restrictions on foreign land tenure is likely. Economic freedom is constrained by long-standing institutional weaknesses and the absence of political commitment to deeper reforms.

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Background

Namibia has been politically stable since gaining independence from South Africa in 1990. President Hage Geingob was elected to 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 once a Chinese-owned mine is fully online. Namibia’s economy is closely linked to South Africa’s, and its credit rating is one of the region’s highest. In 2017, the government announced that it was considering accelerating its expropriation of land with “fair compensation” for redistribution to the black majority.

Rule of LawView Methodology

Property Rights 56.6 Create a Graph using this measurement

Government Integrity 45.4 Create a Graph using this measurement

Judicial Effectiveness 54.2 Create a Graph using this measurement

Although property rights are constitutionally guaranteed, parliament may expropriate property and regulate the property rights of foreign nationals. The rule of law remains weak, and the judicial system suffers from insufficient resources and chronic delays. The law provides criminal penalties for corruption by officials, but enforcement is ineffective. Government officials sometimes engage in corrupt practices with impunity.

Government SizeView Methodology

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 34.3 percent of total domestic income. Over the past three years, government spending has amounted to 40.7 percent of total output (GDP), and budget deficits have averaged 7.3 percent of GDP. Public debt is equivalent to 42.1 percent of GDP.

Regulatory EfficiencyView Methodology

A business environment that is among the best in Africa is seen as increasingly threatened by populist political forces. Reform has stagnated. Labor market regulations are relatively flexible, but the labor market lacks dynamism. The government maintains an extensive system of subsidies and transfers, including subsidies to the loss-making state airline.

Open MarketsView Methodology

Trade is extremely important to Namibia’s economy; the combined value of exports and imports equals 112 percent of GDP. The average applied tariff rate is 0.9 percent. Nontariff barriers impede trade. Government openness to foreign investment is above average. The financial sector is not fully developed. Financial intermediation is uneven across the country, and scarce access to credit and banking services discourages entrepreneurial activity.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius75.10.4
2Botswana69.9-0.2
3Rwanda69.11.5
4South Africa630.7
5Uganda621.1
6Côte d'Ivoire 62-1.0
7Seychelles61.6-0.2
8Burkina Faso600.4
9Cabo Verde603.1
10Tanzania59.91.3
11Namibia58.5-4.0
12Nigeria58.51.4
13Gabon58-0.6
14Mali57.6-1.0
15Guinea-Bissau56.90.8
16Madagascar56.8-0.6
17Benin56.7-2.5
18Comoros56.20.4
19Ghana56-0.2
20Swaziland55.9-5.2
21Senegal55.7-0.2
22Kenya54.71.2
23Zambia54.3-1.5
24Mauritania54-0.4
25Lesotho53.90.0
26São Tomé and Príncipe 53.6-1.8
27Ethiopia52.80.1
28The Gambia52.3-1.1
29Guinea52.24.6
30Democratic Republic of Congo52.1-4.3
31Malawi52-0.2
32Cameroon51.90.1
33Sierra Leone51.8-0.8
34Burundi50.9-2.3
35Liberia50.91.8
36Niger49.5-1.3
37Sudan49.40.6
38Chad49.30.3
39Central African Republic49.2-2.6
40Angola48.60.1
41Togo47.8-5.4
42Mozambique 46.3-3.6
43Djibouti45.1-1.6
44Zimbabwe440.0
45Equatorial Guinea42-3.0
46Eritrea41.7-0.5
47Republic of Congo 38.9-1.1
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