President of Namibia Hage Geingob. Picture: GCIS
President of Namibia Hage Geingob. Picture: GCIS

After shrinking for 10 consecutive quarters, Namibia’s economy is set for a recovery — albeit a slow one, says Herbert Maier, Standard Bank’s chair in the country.

SA’s economic malaise has spilt over into neighbouring Namibia, as has its power shortages, given that the countries trade electricity.

Earlier in April, Bloomberg reported that Namibia had ruled out dropping its currency peg with the rand given its close trade links with its larger neighbour and its drive to recover from recession.

Namibia would also seek private investment in its energy sector partly in an effort to help reduce its reliance on imports from Eskom, Bloomberg reported, citing an interview with Namibian President Hage Geingob.

"The tenth consecutive quarterly contraction has confirmed an economic depression in Namibia and the economy continues to languish with little policy tools available through which to kick-start growth," Maier wrote in Standard Bank Namibia’s annual report for 2018.

Maier said while Namibia’s economy would recover — the central bank expects growth of 1.5% in 2019 — a full recovery "is likely to take some years".

"Pro-cyclical fiscal policy, which contributed to the overheating of the economy, may now result in it languishing in a low growth environment for an extended period," he said.

Namibia was more vulnerable to external shocks "than at any point since the global financial crisis" because of limited room to manoeuvre with respect to monetary and fiscal policy.

Standard Bank Namibia’s CEO, Vetumbuavi Mungunda, said it was "imperative" that the private sector work with government "to map-out solutions that will provide definite and immediate recovery of the economy".

"It is necessary that a package of initiatives and actions are developed by government,with input from the private sector that will enhance competitiveness of the Namibian economy, boost private sector confidence, as well as provide policy certainty needed for private enterprises to thrive," Mungunda said.