Namibian economy expected to return to positive growth: IMF

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People stand outside the main entrance of the Namibian Diamonds Trading Company where Namibian diamonds from NAMDEB mining are graded and stored on June 21, 2017 in Windhoek. / AFP PHOTO / GIANLUIGI GUERCIA (Photo credit should read GIANLUIGI GUERCIA/AFP via Getty Images)
FILE PHOTO: People stand outside the main entrance of the Namibian Diamonds Trading Company where Namibian diamonds from NAMDEB mining are graded and stored in Windhoek. (Photo credit should read GIANLUIGI GUERCIA/AFP via Getty Images)

The Namibian economy is projected to see positive growth in 2020 as the drought fades and mining production picks up, the International Monetary Fund (IMF) said on Monday.

In a statement, IMF mission chief for Namibia Geremia Palomba said absent structural reforms, growth would strengthen only gradually over the medium-term.

“Downside risks to this outlook include a decline in global as COVID-19 virus risks materialize, and possible lower than expected Southern African Customs Union (SACU) revenue and fiscal slippages that would undermine the government’s effort to stabilize public debt dynamics,” Polamba noted.

He added that the Namibian government needs to continue fiscal adjustment policies to stabilize public debt over time and balance the adjustment with broader reforms to support growth.

“In preparation of the FY2020/21 budget, the government’s medium term fiscal adjustment plans and supporting policy measures should be clearly identified. There is need to jumpstart structural reforms to reignite growth and boost job creation,” he said.

He called for the country to improve the efficiency of the economy, as it is imperative. This includes streamlining business regulations, strengthening market operations of key public enterprises, removing obstacles that contribute to high electricity and transportation costs, and better align wage dynamics in the public sector and in the economy to productivity trends.

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