Mr. Yaya W. Junardy

The Namibian economy has a modern market sector, which produces most of the country’s wealth, and a traditional subsistence sector. Namibia’s gross domestic product (GDP) per capita is relatively high among developing countries, but obscures one of the most unequal income distributions on the African continent. Although the majority of the population depends on subsistence agriculture and herding, Namibia has more than 200,000 skilled workers, as well as a small, well-trained professional and managerial class.

The country’s economy is based on capital-intensive industry and farming. However, Namibia’s economy is heavily dependent on the earnings generated from primary commodity exports in a few vital sectors, including minerals, livestock, and fish. Furthermore, the Namibian economy remains integrated with the economy of South Africa, as the bulk of Namibia’s imports originate there.

Since independence, the Namibian Government has pursued free-market economic principles designed to promote commercial development and job creation to bring disadvantaged Namibians into the economic mainstream. To facilitate this goal, the government has actively courted donor assistance and foreign investment. The liberal Foreign Investment Act of 1990 provides for freedom from nationalization, freedom to remit capital and profits, currency convertibility, and a process for settling disputes equitably.

Namibia is part of the Common Monetary Area (CMA) comprising Lesotho, Swaziland, and South Africa. Both the South African rand and the Namibian dollar are legal tender in Namibia, but the Namibian dollar is not accepted in South Africa. As a result of the CMA agreement, the scope for independent monetary policy in Namibia is limited. The Bank of Namibia regularly follows actions taken by the South African central bank.

Given its small domestic market but favorable location and a superb transport and communications base, Namibia is a leading advocate of regional economic integration. In addition to its membership in the Southern African Development Community (SADC), Namibia presently belongs to the Southern African Customs Union (SACU) with South Africa, Botswana, Lesotho, and Swaziland. Within SACU, no tariffs exist on goods produced in and moving among the member states. In July 2008, SACU signed a Trade, Investment and Development Cooperation Agreement (TIDCA) with the United States. SACU also has plans to negotiate free trade agreements with China, India, Kenya, and Nigeria. The SACU Secretariat is located in Windhoek.

Nearly 70% of Namibia’s imports originate in South Africa, and approximately one-third of Namibian exports are destined for the South African market, according to the World Trade Organization. Outside of South Africa, the EU (primarily the U.K.) is the chief market for Namibian exports. Namibia’s exports consist mainly of diamonds and other minerals, fish products, beef and meat products, grapes, and light manufactures. China’s value as an export market is increasing, particularly for minerals.