Economic diversification and socio-economic development: a case of Namibia
- Authors: Fikunawa, Brigitte
- Date: 2024-12
- Subjects: Diversification in industry , Economic development -- Namibia , Namibia -- Economic conditions
- Language: English
- Type: Doctoral theses , text
- Identifier: http://hdl.handle.net/10948/70264 , vital:78334
- Description: Economic diversification has been at the forefront of many countries’ socio-economic development agendas, especially resource-rich developing countries. It is seen as a tool for attaining socio-economic development. After independence as a strategy to resolve socio-economic challenges, most developing economies like Namibia implemented policies and strategies enabling economic diversification. This study provides an empirical analysis of Namibia’s economic diversification and socio-economic development between 1990 and 2021. The study used a concurrent mixed research methodology involving quantitative secondary and qualitative interview-based primary data to assist in filling any gaps left by either methodology. The interviews helped expand and validate the secondary data results. The quantitative component of the study focuses on determining the level of economic diversification, the drivers of that diversification and the effect of economic diversification on socio-economic development. The study used the Tress and Ogive indices to proxy for economic diversification, while employment, poverty reduction and economic growth represent socio-economic development. Reading from these economic diversification measures, Namibia’s economy is relatively diversified but remains in the initial stage, with Tress and Ogive indices levels of 48.09/6.03. The study also found that in the long run, foreign direct investment (FDI), education and institutional quality lead to increased economic diversification while inflation discourage economic diversification. In the short run, FDI and education enhances diversification while inflation, financial sector development and earnings from natural resources lead to a decline in economic diversification. In examining the effect of economic diversification on socio-economic development, the results show that it has a positive influence on employment creation, poverty reduction and economic growth in the long and the short term. So overall the study found that economic diversification contributes positively to socio-economic development. To validate the quantitative results, six senior executives from five entities which includes ministries, government agencies and the private sector were selected purposively for interviews on their perception of economic diversification in Namibia and the data were analysed thematically. The results were inconclusive with regard to the effectiveness of the enabling policies. The participants agreed the enabling policies had contributed to employment, poverty reduction, income equality and economic growth. However, more needs to be done, like creating value chain-connected sectors that create seasonal employment, for the contribution to be sustainable. The study also found that the cost of doing business (mainly taxation and the cost of water and electricity); policies and institutional frameworks (like immigration, trade and investment laws); competitiveness of the economy in terms of its size, quality of human capital, manufacturing capacity and economic uncertainty are the leading challenges affecting the progress of Namibia’s economic diversification process. This researcher drew up several recommendations for the Namibian government to continue enhancing economic diversification to address the socio-economic challenges of unemployment, poverty and income inequality through investment in productive areas of the manufacturing and services sectors which can contribute to growth and employment. The government also needs to address the challenges hindering the progress of economic diversification in the country to create an environment that can foster economic diversification. The study recommends targeted intervention to enhance the attractiveness of other sectors so as to wean the economy off its high dependence on the primary sector through the provision of both fiscal and non-fiscal incentives. The required human capital development should be harnessed through investment in capabilities like vocational skills that are needed for economic diversification and socio-economic development to be achieved. Good governance should be attained by fighting corruption to enhance investment confidence. It further recommends that Namibia ratifies and implement the SADC protocol on trade and the African Continental Free Trade Area (AfCFTA) agreement to increase market accessibility and address the country’s market size, which is currently uncompetitive for investment. , Thesis (PhD) -- Faculty of Business and Economic Sciences, School of Economics, Development and Tourism, 2024
- Full Text:
- Date Issued: 2024-12
- Authors: Fikunawa, Brigitte
- Date: 2024-12
- Subjects: Diversification in industry , Economic development -- Namibia , Namibia -- Economic conditions
- Language: English
- Type: Doctoral theses , text
- Identifier: http://hdl.handle.net/10948/70264 , vital:78334
- Description: Economic diversification has been at the forefront of many countries’ socio-economic development agendas, especially resource-rich developing countries. It is seen as a tool for attaining socio-economic development. After independence as a strategy to resolve socio-economic challenges, most developing economies like Namibia implemented policies and strategies enabling economic diversification. This study provides an empirical analysis of Namibia’s economic diversification and socio-economic development between 1990 and 2021. The study used a concurrent mixed research methodology involving quantitative secondary and qualitative interview-based primary data to assist in filling any gaps left by either methodology. The interviews helped expand and validate the secondary data results. The quantitative component of the study focuses on determining the level of economic diversification, the drivers of that diversification and the effect of economic diversification on socio-economic development. The study used the Tress and Ogive indices to proxy for economic diversification, while employment, poverty reduction and economic growth represent socio-economic development. Reading from these economic diversification measures, Namibia’s economy is relatively diversified but remains in the initial stage, with Tress and Ogive indices levels of 48.09/6.03. The study also found that in the long run, foreign direct investment (FDI), education and institutional quality lead to increased economic diversification while inflation discourage economic diversification. In the short run, FDI and education enhances diversification while inflation, financial sector development and earnings from natural resources lead to a decline in economic diversification. In examining the effect of economic diversification on socio-economic development, the results show that it has a positive influence on employment creation, poverty reduction and economic growth in the long and the short term. So overall the study found that economic diversification contributes positively to socio-economic development. To validate the quantitative results, six senior executives from five entities which includes ministries, government agencies and the private sector were selected purposively for interviews on their perception of economic diversification in Namibia and the data were analysed thematically. The results were inconclusive with regard to the effectiveness of the enabling policies. The participants agreed the enabling policies had contributed to employment, poverty reduction, income equality and economic growth. However, more needs to be done, like creating value chain-connected sectors that create seasonal employment, for the contribution to be sustainable. The study also found that the cost of doing business (mainly taxation and the cost of water and electricity); policies and institutional frameworks (like immigration, trade and investment laws); competitiveness of the economy in terms of its size, quality of human capital, manufacturing capacity and economic uncertainty are the leading challenges affecting the progress of Namibia’s economic diversification process. This researcher drew up several recommendations for the Namibian government to continue enhancing economic diversification to address the socio-economic challenges of unemployment, poverty and income inequality through investment in productive areas of the manufacturing and services sectors which can contribute to growth and employment. The government also needs to address the challenges hindering the progress of economic diversification in the country to create an environment that can foster economic diversification. The study recommends targeted intervention to enhance the attractiveness of other sectors so as to wean the economy off its high dependence on the primary sector through the provision of both fiscal and non-fiscal incentives. The required human capital development should be harnessed through investment in capabilities like vocational skills that are needed for economic diversification and socio-economic development to be achieved. Good governance should be attained by fighting corruption to enhance investment confidence. It further recommends that Namibia ratifies and implement the SADC protocol on trade and the African Continental Free Trade Area (AfCFTA) agreement to increase market accessibility and address the country’s market size, which is currently uncompetitive for investment. , Thesis (PhD) -- Faculty of Business and Economic Sciences, School of Economics, Development and Tourism, 2024
- Full Text:
- Date Issued: 2024-12
The impact of South African monetary policy on output and price stability in Namibia
- William, Anna Martha Tandakos
- Authors: William, Anna Martha Tandakos
- Date: 2020
- Subjects: Common Monetary Area (Organization) , Monetary unions -- Africa, Southern , Monetary policy -- South Africa , Monetary policy -- Namibia , Repurchase agreements -- South Africa , Repurchase agreements -- Namibia , Inflation (Finance) -- South Africa , Inflation (Finance) -- Namibia , Namibia -- Economic conditions , Transmission mechanism (Monetary policy)
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/167709 , vital:41505
- Description: Namibia is a member country of the Common Monetary Area (CMA) with Lesotho, Swaziland and South Africa. South Africa is the anchor country to which the smaller member states have surrendered monetary policy authority. This thesis therefore examines the empirical relationship between the South Africa repo rate (SArepo) on the one hand and Namibia’s repo rate (Namrepo), Prime Lending Rate (PLR), Private Sector Credit Extension (PSCE), Consumer Price Index (CPI) and Gross Domestic Product (GDP) on the other hand. The credit channel of the monetary policy transmission mechanism informs the theoretical foundation of the thesis. Vector Autoregression modelling, variance decomposition and impulse response functions were used to explore the nature and strength of the relationship between the SArepo and said variables in Namibia. This thesis used quarterly data for the period 2003 to 2017. The variation in the Namrepo was predominantly explained by the SArepo, which confirmed that the Namrepo strongly followed the SArepo. The impulse response function results found that the impact of a contractionary monetary policy shock (an increase in the SArepo) lasted for up to six quarters before the effect started to fade. The Namrepo exhibited a positive response to an increase in the SArepo, although the magnitude of the response started to fade after the third quarter. The PLR, as a representative of market rates in Namibia, also exhibited a positive response to an increase in the SArepo. The results were similar for the Namrepo and the PLR because changes to the NamRepo are passed through immediately to the market interest rates. On the real variables, the study found that a contractionary monetary policy shock initiated in South Africa resulted in an increase in inflation in Namibia of less than 0.4 percent, whereas output declined by less than 1.0 percent. Interestingly, a Namibia (domestic) contractionary monetary policy shock resulted in a decline in prices of less than 0.4 percent. GDP, on the other hand, exhibited a positive response to a contractionary monetary shock, with an increase of less than 2.0 percent in the first four quarters of the period observed. The results reflected that a contractionary monetary policy shock from South Africa was more effective with regard to its impact on GDP; however, a domestic monetary policy shock was more effective at impacting on domestic inflation compared to the impact from South Africa.
- Full Text:
- Date Issued: 2020
- Authors: William, Anna Martha Tandakos
- Date: 2020
- Subjects: Common Monetary Area (Organization) , Monetary unions -- Africa, Southern , Monetary policy -- South Africa , Monetary policy -- Namibia , Repurchase agreements -- South Africa , Repurchase agreements -- Namibia , Inflation (Finance) -- South Africa , Inflation (Finance) -- Namibia , Namibia -- Economic conditions , Transmission mechanism (Monetary policy)
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/167709 , vital:41505
- Description: Namibia is a member country of the Common Monetary Area (CMA) with Lesotho, Swaziland and South Africa. South Africa is the anchor country to which the smaller member states have surrendered monetary policy authority. This thesis therefore examines the empirical relationship between the South Africa repo rate (SArepo) on the one hand and Namibia’s repo rate (Namrepo), Prime Lending Rate (PLR), Private Sector Credit Extension (PSCE), Consumer Price Index (CPI) and Gross Domestic Product (GDP) on the other hand. The credit channel of the monetary policy transmission mechanism informs the theoretical foundation of the thesis. Vector Autoregression modelling, variance decomposition and impulse response functions were used to explore the nature and strength of the relationship between the SArepo and said variables in Namibia. This thesis used quarterly data for the period 2003 to 2017. The variation in the Namrepo was predominantly explained by the SArepo, which confirmed that the Namrepo strongly followed the SArepo. The impulse response function results found that the impact of a contractionary monetary policy shock (an increase in the SArepo) lasted for up to six quarters before the effect started to fade. The Namrepo exhibited a positive response to an increase in the SArepo, although the magnitude of the response started to fade after the third quarter. The PLR, as a representative of market rates in Namibia, also exhibited a positive response to an increase in the SArepo. The results were similar for the Namrepo and the PLR because changes to the NamRepo are passed through immediately to the market interest rates. On the real variables, the study found that a contractionary monetary policy shock initiated in South Africa resulted in an increase in inflation in Namibia of less than 0.4 percent, whereas output declined by less than 1.0 percent. Interestingly, a Namibia (domestic) contractionary monetary policy shock resulted in a decline in prices of less than 0.4 percent. GDP, on the other hand, exhibited a positive response to a contractionary monetary shock, with an increase of less than 2.0 percent in the first four quarters of the period observed. The results reflected that a contractionary monetary policy shock from South Africa was more effective with regard to its impact on GDP; however, a domestic monetary policy shock was more effective at impacting on domestic inflation compared to the impact from South Africa.
- Full Text:
- Date Issued: 2020
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