Structural reforms key to success of sustainable economic transformation

Namibia was bestowed the right by WorldSkills International to host the second edition of WorldSkills Africa. Young people must be at the heart of government plans for the future.

More than half of the world’s population growth will be in Africa by 2050. There is a need for leaders to see the value in creating an enabling environment for young people to tap into blue and green economic pathways to drive sustainable development and create jobs.

Young people want to share their knowledge and be taken seriously as key partners, and they need to have more opportunities like this.

Economic reforms, together with structural and technological change, are bringing about new business opportunities and with them demand for new skills.

Successive governments have been focused on achieving inclusive growth and self-sufficiency not just for the current generation, but for generations to come.

Namibia must maintain the momentum of these laudable initiatives and continue to enhance the robustness and vitality of its economy. At the same time, these and other structural reforms should be aimed at ensuring equitable and inclusive growth.

Going forward, Namibia will have to prioritise economic expansion and sustainability to maintain its trajectory of growth and influence.

The country must continue to embrace transformational, rather than incremental change to shape an economic policy that supports rapid growth.

This will require a continued commitment to wide-ranging and systemic sectoral reforms, with strong measures to restore fiscal balance and strengthen the banking system.

Namibia will also need to continue making strides to increase competitiveness and the ease of doing business. The country will also have to ramp up its infrastructure efforts, not just for roads and bridges, but for health and education too.

Namibia is expeditiously moving forward on its energy transition journey, the government’s plan to establish the Green Hydrogen is a step in the right direction. Namibia has a unique opportunity, and an important role, in fostering regional cooperation in Southern Africa, thus creating new opportunities for growth and prosperity.

Namibia’s economy rebounded to a positive growth rate for the first time in two years, growing by 2.4% in 2021 compared to a contraction of 7.9% recorded in 2020, according to the Namibia Statistics Agency.

To accelerate economic growth in 2022, a special strategy is needed that can be implemented domestically and by adjusting the conditions that occur in the global economy. Pandemic control will still be a top priority in 2022, where success in overcoming the surge caused by Covid-19 will be a valuable lesson. Thus, the momentum of economic recovery can be maintained by controlling the condition of the health sector. High economic growth is needed to increase the employment and social welfare of the community.

To increase the amount of investment, the government has to expand the realm of investment to expand the creation of new jobs. Achieving appropriate economic policies is a necessary but not sufficient step to raising economic growth rates.

Policy change should be supplemented with growth-oriented investments and efforts to strengthen foundations supporting industries that have comparative advantages and competitive niches. Linking structural reforms to trade agreements provides an important vehicle to motivate reform, codify current best policy practices, and spread structural reforms. While structural reform does not guarantee success on its own and must be accompanied by other growth initiatives, it does represent one of the best alternatives for achieving development progress. In comparison to other possible interventions, structural reform is a relatively cost-effective, high payout activity. Thus, structural reform efforts can establish win-win situations.

Reviving economic growth is crucial to increasing well-being, job creation and inclusivity. The low employment rate, especially for black Namibians, contributes to high-income inequality.

More needs to be done to achieve growth that is strong and inclusive; it has to capture all the ones that have been left behind. Transformation must be pursued with greater vigour so that we have more equitable outcomes and a greater number of jobs.

Achieving structural transformation will involve a greater degree of industrialisation of Namibian economies. The agriculture sector should remain central to Namibian economies in any process of transition. For a successful structural transformation, Namibia needs industrialisation to create jobs, increase incomes and foster economic diversification.

Commodity-based industrialisation could be very useful in assuring the success of Namibia’s structural transformation. Structural transformation requires innovation to overcome deficiencies regarding infrastructural development.

Good knowledge of industrial value chains and structures are prerequisites for an effective transformation of Namibian economies. Investing continuously in education, training, improvement of skills and technological innovation is imperative to prepare the ground for a successful industrial transformation.

Innovation will help build the capacity to produce more sophisticated products with high added value. Structural reform can enhance growth opportunities without raising macroeconomic volatility or crisis risks. Appropriately sequenced structural reforms, thus, improve the growth-volatility border for the economy, rather than simply engendering a move along the existing borderline.

To this end, skills development is paramount because it not only stimulates the creation of a sustainable development system but also contributes toward transitioning the informal to the formal economy.

Furthermore, continuous skills development is essential to address the opportunities and challenges to meet the new demands of changing economies and new technologies under the 4th Industrial Revolution, which is critical in ensuring industries remain competitive in the global market.

It is, therefore, important to embed measures that achieve cohesion into political proposals for increasing entrepreneurialism.

Taxes and expenditures can be used to spread the gains of increased productivity to many, if not all, groups.

Above all, building a more inclusive economy will enhance longer-term growth, productivity and development for all Namibians.