The negative economic outlook on Namibia issued by the international credit rating agency, Fitch Ratings, is not a result of carelessness by the current administration, but rather a result of the slowdown of the global economy.
In fact, it is this administration’s plan of action to cut costs on unnecessary expenditure and to stop wastage. That was the sentiment of President Hage Geingob at a recent press briefing that dealt with, among others, the Fitch Ratings agency, which said Namibia’s high deficit and the projections of national debt rising above and beyond the accepted threshold are some of the reasons for the negative outlook.
“This is not caused by the carelessness of government. We know that the whole world is going through a certain downturn,” Geingob informed reporters. “Economic growth has been minimal in all the countries, including sub-Saharan Africa, but we’re doing much better. However, there are things that are causing this. It’s not because of our carelessness,” he explained.
Geingob added that his administration has undertaken swift action to see where wastage can be stopped. “We took action to stop any tender that we suspect that somehow some unethical method was used and we’re continuing with that.”
He further said: “We will have forensic investigations into certain issues. We’re looking at how to stop wastage. We’re going to have that review in October. We’ll bring forth areas in which we’re going to stop this, including foreign trips.”
The high likelihood of government not being able to narrow the deficit in coming financial years, is said to be another reason Fitch revised Namibia’s economic outlook from stable to negative.
Other reasons given include anaemic economic growth and the likely impact of the recently announced New Equitable Economic Empowerment Framework, which Fitch says, “could slow down foreign investment in manufacturing and services.”
Dr John Steytler, the president’s economic adviser, last week said global economic growth prospects have already been revised downward twice this year by the International Monetary Fund, as well as the World Bank, both of which gave a not-so-positive picture of global growth prospects.