What NDP 2 Yielded

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By Catherine Sasman

WINDHOEK

The second National Development Plan (NDP 2) for 2001 to 2006 aimed at sustainable and equitable improvement in the quality of life of Namibian citizens, envisioning more rapid economic growth with expansion in employment, reductions in poverty and inequality, and promotion of diversification of the economy.

The second development phase was viewed as more ambitious than NDP1 especially in its projected growth rates in the primary industries (6.7 percent as opposed to 3.2 percent in the first developmental cycle), and growth in secondary industries (5.5. percent as opposed to 1.3 percent).

The Gross Domestic Product (GDP) outstripped the targeted growth of 4.3 percent to 4.5 percent, largely driven by growth rates in the secondary and tertiary sectors, and particularly the mining sector with rapidly rising demand for minerals and diamonds in the world market.

The period saw the opening of the Ongopolo copper mine, the Skorpion zinc mine and other smaller metal mines.

A price boom was similarly experienced for minerals and huge investments in the diamond industry took place.

The “exceptional performance” of the mining industry has thus resulted in much of the foreign direct investment directed at the mining industry, and mostly into the diamond-mining sector.

However, pointed a National Planning Commission (NPC) document, the performance of the primary industries remained at a disappointing 3.7 percent largely ascribed to the poor performance in the agricultural and fishing sectors.

Unemployment targets were also not met. From a projected 2.6 percent per annum increase, employment has declined by an average of 2.7 percent per annum during 2000 and 2004, which the Government regards as a serious cause for concern.

NDP 2 visualised a reduction in inequalities in income distribution, with the Gini co-efficient (a measure of inequality in income distribution) targeted to be reduced from 0.67 to less than 0.6 at the end of last year.

Results from the Namibia Household Income and Expenditure Surveys conducted during 1993/94 and 2003/04 showed a decline of the Gini co-efficient from 0.701 to 0.604.

Further, the growth of private consumption had decelerated to 2.2 percent from a targeted 4.7 percent.

“During the NDP 1 (1995 – 2000), economic growth was broad-based, and the fruits shared more widely among the population including the subsistence farmers, which provided the momentum for the growth in private consumption.

“On the other hand, the benefits of economic growth in NDP 2 were less widely shared, with a resulting slowdown in growth in private consumption,” noted the NPC.

Government consumption has at the same time also slowed down.

During NDP 2, the budget deficit rose from 2.8 percent in 2000/01 to 4.2 percent in 2001/02, declining in the next budget year to 2.6 percent.

However, it shot up to 7.2 percent in 2003/04, which was ascribed to “shortfalls” in revenue collection. A reprise was experienced during the 2006/07 budgetary period with a welcome windfall in SACU revenues, which saw a budget surplus of 2.1 percent.

State-owned enterprises (SOEs) consist – since April this year – of 57 parastatals with an estimated gross assets of N$20 billion, with liabilities above N$10 billion, and net assets of over N$9 billion. SOEs employ around 10 000 people.

During NDP 2, the overall contributions from SOEs to State revenues fluctuated from N$79 678 000 in 2002/03, to an estimated N$695 533 000 in 2006/07.

This vast increase was due to the sale of MTC shares that fetched N$648 000 000.

Also during NDP 2, the Government resettled 295 families and acquired 828 265 hectares from 113 commercial farmers.

As part of the land reform programme, 563 communal areas were surveyed for the purpose of turning these into commercial farming units.

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