Being an avid fan of rugby, and especially the World Cup, I have been drawn to the events currently taking place in London. I’m supporting England, of course, because India is not fielding a team, but I am also intrigued by the other countries competing, and one in particular, Namibia.
Although it shares a border with South Africa, which I have written a lot about, and not positively, I seem to have overlooked Namibia. If it weren’t for a paragraph in Dan Keeler’s weekly roundup of news from the Frontier Markets in the Wall Street Journal, I may have continued obliviously.
But what caught my eye was this quote from Namibia’s president, Hage Geingob: “Africa has to address the question of poverty, and if we are to address poverty, we must create a conducive investment climate. The government must provide an environment for the private sector to create jobs.”
I knew I needed to do some research and educate myself about this country that in my opinion has been flying under the radar. I had always thought they were previously part of the British Empire, but actually they were a colony of Germany named German South West Africa. That was before they became somewhat of a protectorate of South Africa, and it sounds as if that was to their detriment. They gained their independence from South Africa as recently as 1990, and since then have been a democracy.
What struck me during my research was the fact that not only are they a democracy, but they have one of the most stable democracies in all of Africa. Good for them. They also have a multi-party system, and further they enjoy political, economic and social stability. Wow! Namibia’s GDP on a per capita basis is around $6,000 and on a purchasing power parity basis around $9,000, which has to be one of the highest in all of Africa.
From an investing perspective, they do have a stock exchange and their benchmark index NSX is about flat for the year. They also have an ADR Trustco, which trades OTC. In addition, there are multinational companies that are dually listed on their exchange together with the Johannesburg exchange, such as Old Mutual, a British insurance company, and Anglo American, which is a mining company. They are, unfortunately, a commodity based economy with diamond and gold being the major exports; however, they also have the fourth largest uranium mine in the world.
In 2014, their GDP growth came in at 6.4 percent, representing an increase from 5.7 percent in 2013, but inflation hovers around 5.4 percent. Of course there has to be a downside to all this and that would be the unemployment rate, which is around 25 percent, something the President alluded to in the Wall Street Journal article. But things are moving in the right direction, with bills to address the unemployment rate, a well-developed infrastructure, and a banking system that includes online banking, something to be admired on that continent.
So I wish Namibia the best of luck, not only in their economic future, and they do have a bright future unlike some other countries on that continent, but I also wish their rugby team the best of luck in the World Cup. It’s unfortunate that the first game they played was against a powerhouse like New Zealand where they got crushed 58-14. Ouch! – Nasdaq