Sekondi Accra

After winning a contentious 2009 election battle, the South West African People's Organization led by President Hifikepunye Pohamba is busy dealing with a pension scandal. Shortly thereafter the Supreme Court ordered a vote recount, the opposition Rally for Democracy and Progress, led by Hidipo Hamutenya, ended its boycott of parliament to claim its eight seats in the 72-seat National Assembly.

The influence of Namibia's founding president, Sam Nujoma - still very active at age of 81 - can be witnessed in the rise of his eldest son, Utoni Nujoma, who holds the post of foreign minister and who many political analysts cite as being groomed to succeed Pohamba. Other contenders are SWAPO Vice-President Hage Geingob and Justice Minister Pendukeni Iivula-Ithana. Much will depend on whom Nujoma decides to support at a special party congress to be convened in three years time, but rival factions are already drawing battle lines.

Policy will continue being based on maintaining foreign-investor interest, especially in the mining sector, and promoting opportunities for emergent Namibian entrepreneurs through black economic empowerment (BEE) measures and affirmative action. These require a shift in the ownership of private sector firms in favor of "historically deprived" Namibians, including an initial 26% minimum equity stake for BEE entities, although the Windhoek government has assured mining companies that the provisions will be implemented gradually and on a flexible basis.

The government's land purchase and resettlement program will continue to be based on willing buyer, willing seller arrangements. Expropriations of mainly absentee-owned commercial farmland, for which compensation is paid in line with the provisions of the constitution, are likely to remain minimal. However, the government has yet to address criticism that resettled Namibians are not provided with sufficient assistance to farm effectively.

The impact of the global recession and lower commodity prices was smaller than the government anticipated, with real GDP contracting by just under 1% in 2009. A marked decline in diamond output was partially offset by increased beef, fish and uranium production. The International Fund (IMF) estimates the GDP growth will rebound to 4.4% in 2010 due to increased diamond production (up by 106% to 0.8 million carats in the first half) and further growth in uranium production.

In 2011, GRP growth should rise to around 4.8% due to continued expansion in the diamond and uranium production, the doubling of the capacity at the Tsumeb copper smelter, the reopening of two copper mines and the commissioning of the large German owned Ohorongo cement plant. Although the South african government's reluctance to sign a gas supply agreement has so far delayed development of the Kudu gas field, which contains reserves of 1.4 trillon cubic feet, Windhoek's plan is for Russia's Gazprom to build a gas-to-powerplant in Walvis Bay.

Reduced receipts from the Southern African Customs Union will be more than offset by the growth of exports and direct investment capital. The banking system is stable due to low exposure to the global credit crunch. Inflation receded from a peak of 12% in October 2008 to 3.6% in August 2010, reflecting lower food and fuel prices. The governement anticipates continued expansion into 2011-12, when the budget deficit is due to peak at 8.2% of GDP. The treasury forcasts that government debt will more than double to $4 billion dollars (27%) of GDP between 2009-10 and 2011-12 to cover large deficits. However, most will come from domestic market borrowing, with external debt set to remain low at $570 million dollars.


Official Data


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The U.S. Embassy in Namibia is located at 14 Lossen Street, Windhoek (tel. +264 61-295-8500).
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