Namibian Prime Minister Nahas Angula said Tuesday that the slowdown in global economic growth would seriously hurt Namibia’s economic growth and warned of ‘tough times ahead’ for Namibians.
Angula said that the Namibian economy, which has average a 4 percent growth over the past years, was likely to shrink, adding that this might result in tight government expenditure.
Without giving out any statistics, Angula said that the Namibian economy was likely to retrench as companies slush overheads and adjust to a slowdown in global demand for commodities.
Namibia has a narrowly diversified economy which replies on the mining sector.
“There is likely to be an effect on everybody…no effective demand on commodities and Namibia being dependant on exports, might be affected. As an exporter of minerals, we are likely to be affected in the medium and long term,” Angula told state owned daily New Era.
The Namibian Prime Minister is the first senior government official to publicly acknowledge the effect radiating out of from the USA and Europe, the world’s biggest consumers.
Although the Namibian economy is not directly linked to that of USA or European countries, Angula said that the reckoning was now.
“Some mines might start trimming their work force and some are producing to stockpile and not to sell. If the situation does not improve by next year, it will be a problem. Government revenue will shrink because levies on products will not be there,” Angula said.
Namibia’s central bank recently said that the global economic crisis would not hurt the financial sector but also warned of the effects on the overall economy, especially the mining sector.
Namibia’s narrowly diversified economy is heavily reliant on diamonds, copper, uranium and zinc among other commodities.
Business executives have said that the slowdown in demand of these commodities might result in companies postponing planned investments projects, apart from cutting down on production.
Analysts also fear that developed nations might cut down on donor funding to impoverished countries in the continent.